20-F

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended: December 31, 2002
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                      to

Commission File Number 000-29502

MICROCELL TELECOMMUNICATIONS INC/
MICROCELL TÉLÉCOMMUNICATIONS INC.

(Exact name of Registrant as specified in its charter)

(Translation of Registrant’s name into English)

CANADA
(Jurisdiction of incorporation or organization)

800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec, Canada, H5A 1K3
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
None	None

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Class B Non-Voting Shares
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Series B Senior Discount Notes due 2006
Series B Senior Discount Notes due 2007
Series B Senior Discount Notes due 2009
(Title of Class)

     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

27,631,537 Common Shares
9,590,000 Class A Non-Voting Shares
202,994,911 Class B Non-Voting Shares

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes     [  ] No

Indicate by check mark which financial statement item the registrant has elected to follow.

[   ] Item 17        [X] Item 18

TABLE OF CONTENTS

PART I
	ITEM 1 — IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
	ITEM 2 — OFFER STATISTICS AND EXPECTED TIMETABLE
	ITEM 3 — KEY INFORMATION
	ITEM 4 — INFORMATION ABOUT THE COMPANY
	ITEM 5 — OPERATING AND FINANCIAL REVIEW AND PROSPECTS
	ITEM 6 — DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
	ITEM 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
	ITEM 8 — FINANCIAL INFORMATION
	ITEM 9 — THE OFFER AND LISTING
	ITEM 10 — ADDITIONAL INFORMATION
	ITEM 11 — QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
	ITEM 12 — DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
PART II
	ITEM 13 — DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
	ITEM 14 — MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
	ITEM 15 — CONTROLS AND PROCEDURES
	ITEM 16. A. — AUDIT COMMITTEE FINANCIAL EXPERT
	ITEM 16. B. — CODE OF ETHICS
	ITEM 16. C. — PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART III
	ITEM 17 — FINANCIAL STATEMENTS
	ITEM 18 — FINANCIAL STATEMENTS
	ITEM 19 — EXHIBITS
SIGNATURE
ex-1.1
ex-1.2
ex-2.1
ex-2.2
ex-2.3
ex-2.4
ex-2.5
ex-4.1
ex-4.2
ex-4.3
ex-4.4
ex-4.5
ex-4.6
ex-4.7
ex-4.8
ex-8.1
ex-11.1
ex-11.2
ex-11.3
ex-11.4

TABLE OF CONTENTS

EXPLANATORY NOTES
FORWARD LOOKING STATEMENTS
NON-GAAP MEASURES

PART I		5
	ITEM 1 — IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS	5
	ITEM 2 — OFFER STATISTICS AND EXPECTED TIMETABLE	5
	ITEM 3 — KEY INFORMATION	5
	ITEM 4 — INFORMATION ABOUT THE COMPANY	13
	ITEM 5 — OPERATING AND FINANCIAL REVIEW AND PROSPECTS	30
	ITEM 6 — DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	48
	ITEM 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	59
	ITEM 9 — THE OFFER AND LISTING	61
	ITEM 10 — ADDITIONAL INFORMATION	64
	ITEM 11 — QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	80
	ITEM 12 — DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	83
PART II		83
	ITEM 13 — DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	83
	ITEM 14 — MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	83
	ITEM 15 — CONTROLS AND PROCEDURES	83
	ITEM 16. A. — AUDIT COMMITTEE FINANCIAL EXPERT	84
	ITEM 16. B. — CODE OF ETHICS	84
	ITEM 16. C. — PRINCIPAL ACCOUNTANT FEES AND SERVICES	84
PART III		84
	ITEM 17 — FINANCIAL STATEMENTS	84
	ITEM 18 — FINANCIAL STATEMENTS	84
	ITEM 19 — EXHIBITS	116

EXPLANATORY NOTES

     On May 1, 2003, Microcell Telecommunications Inc. (“Microcell”)’s predecessor company, that was also named Microcell Telecommunications Inc. and is now named 2861399 Canada Inc. (“Old Microcell”), and certain subsidiaries of Old Microcell, emerged from a restructuring plan initiated on January 3, 2003 under the Companies’ Creditors Arrangement Act (“CCAA”) and Canada Business Corporations Act (“CBCA”). The terms of Old Microcell’s restructuring plan are set out in Old Microcell’s plan of reorganization and of compromise and arrangement (the “Plan”), a copy of which is contained in the Information Circular and Proxy Statement dated February 17, 2003, (the “Circular”) filed with the U.S. Securities and Exchange Commission (“SEC”) on Form 6-K on February 20, 2003.

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     Before May 1, 2003, Old Microcell carried on its operations through a number of directly and indirectly wholly owned subsidiaries, including; (1) Microcell Connexions Inc. (“Connexions”) which was the holder of the national 30 MHz personal communications services (“PCS”) authorization (the “PCS License”) issued by the Canadian Minister for the Department of Industry (“Industry Canada” or the “Minister”); (2) Microcell Solutions Inc. (“Solutions”) who operated the Company’s retail PCS business under the Fido® brand name; (3) Microcell Capital II Inc. (“Microcell Capital”) who invested in GSM Capital Limited Partnership (“GSM Capital”), Argo II – The Wireless Internet Fund Limited Partnership (“Argo II”), and Inukshuk Internet Inc. (“Inukshuk”) a company awarded by Industry Canada twelve regional multipoint communications systems (“MCS”) licenses; and (4) Microcell Labs Inc. (“Microcell Labs”) who operated as a for-profit laboratory.

     On May 1, 2003, pursuant to the Plan: (1) Microcell became a holding company for Old Microcell; (2) Connexions, Solutions, Microcell Capital, Microcell Labs and other subsidiaries amalgamated to form Solutions, the surviving entity of the amalgamation of the amalgamated companies; and (3) the board of directors of Old Microcell (the “Old Board”) has been replaced by a new board of directors for Microcell (the “New Board”).

     Prior to May 1, 2003, Old Microcell’s Class B Non-Voting Shares were registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). Under the terms of the Plan, Microcell issued First Preferred Voting Shares, First Preferred Non-Voting Shares, Second Preferred Voting Shares, Second Preferred Non-Voting Shares, Class A Restricted Voting Shares, new Class B Non-Voting Shares and warrants. Two series of warrants (collectively the “Warrants”) were issued pursuant to the Plan: (1) 2-year warrants entitling the holders thereof to subscribe, until May 1, 2005, for Class A Restricted Voting Shares or Class B Non-Voting Shares of Microcell, as the case may be, at an exercise price of $19.91 per share (the “Warrants 2005”); and (2) 5-year warrants entitling the holders thereof to subscribe, until May 1, 2008, for Class A Restricted Voting Shares or Class B Non-Voting Shares of Microcell, as the case may be, at an exercise price of $20.69 per share (the “Warrants 2008”). Each of these classes of shares were deemed to be registered pursuant to Section 12(g) of the Exchange Act and Rule 12g-3(a) promulgated thereunder. A report on Form 6-K has been filed on May 22, 2003 to fulfill the requirements of Rule 12g-3(f), because, as a foreign private issuer, Microcell is not required to file current reports on Form 8-K. In November 2003, the Company plans to file with the SEC a Registration Statement with respect to the shares issuable upon the exercise of the Warrants.

     For a more detailed description of the transactions related to the Plan, readers are referred to the Plan.

     Unless references herein are made specifically to Old Microcell, the references to “Microcell”, “Company”, “we”, “us” or “our” refer, depending on the situation of the context to (1) Microcell and all or only part of its subsidiaries collectively, or one or several of its subsidiaries; and (2) Old Microcell and all or only part of its subsidiaries collectively, or one or several of its subsidiaries.

FORWARD LOOKING STATEMENTS

     This annual report includes forward-looking statements that involve risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to the Company’s future prospects, developments and business strategies.

     These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. These forward-looking statements involve risks and uncertainties that may cause the Company’s actual future activities and results of operations to be materially different from those suggested or described in this annual report. These risks include the risks that are identified in this annual report which are primarily listed in the “Risk Factors” in item 3 and “Operating and Financial Review and Prospects” in item 5. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company’s actual results may vary materially from those expected, estimated or projected.

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Act of 1995

     This annual report contains “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995, that are based on current expectations and estimates. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward- looking statements. These statements contain potential risks and uncertainties, and actual results may therefore differ materially.

     Important factors that may affect these expectations include, but are not limited to: changes in the Canadian economy and in Canadian and U.S. capital markets; changes in competition in the Company’s markets; advances in telecommunications technology; changes in the telecommunications regulatory environment; the possibility of future litigation; future availability of financing; unanticipated changes in the number of subscribers; radiofrequency emission concerns; exchange rate fluctuations; penetration and churn rates; and the mix of products and services offered in the Company’s markets. Readers should evaluate any statements in light of these important factors.

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NON-GAAP MEASURES

     The term EBITDA (Operating income (loss) excluding restructuring charges, impairment of intangible assets, depreciation and amortization) is used throughout this annual report. Microcell also uses the terms ARPU (average revenue per user per month), COA (cost of acquisition of a retail subscriber), “net retail subscriber additions”, “churn rate” and “cumulative CAPEX (capital expenditures) per population covered”. All of these aforementioned terms may not be identical to similarly titled measures reported by other companies. Furthermore, they should not be considered in isolation or as alternative measurements of operating performance or liquidity to net loss, operating loss, cash flows from operating activities or any other measures of performance under the generally accepted accounting principles in Canada (“Canadian GAAP”). Microcell believes that EBITDA, ARPU, COA, “net retail subscriber additions”, “churn rate” and “cumulative CAPEX per population covered” are viewed as relevant supplemental measures of performance in the wireless telecommunications industry.

EXCHANGE RATE INFORMATION

     Microcell publishes its consolidated financial statements in Canadian dollars. All dollar amounts set forth in this annual report are expressed in Canadian dollars except where otherwise indicated. References to “$” or “Cdn.$” are to Canadian dollars and references to “U.S.$” or “U.S. dollars” are to United States dollars. See Item 3 of this annual report for exchange rates data.

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PART I

ITEM 1 — IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable

ITEM 2 — OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3 — KEY INFORMATION

SELECTED FINANCIAL DATA

     The selected consolidated financial data for the Company set forth below for the fiscal years ended December 31, 2002, 2001, 2000, 1999 and 1998 have been derived from the consolidated financial statements of the Company, which have been audited by Ernst & Young LLP. The information set forth below should be read in conjunction with item 5 of this Form 20-F and the consolidated financial statements of the Company, and the notes thereto, included in item 18 of this Form 20-F. The consolidated financial statements have been prepared in accordance with Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and the accounting principles generally accepted in the United States (“U.S. GAAP”), see Note 20 to the consolidated financial statements of the Company, which reconciliation is incorporated herewith by reference.

						Years ended December 31,
	2002			2001			2000			1999			1998
(in thousands of dollars,
except for the data relating to shares)
Statement of Loss Data:
Revenues		591,062			541,490			405,986			260,466			143,412
Operating loss		(382,297	)		(193,019	)		(243,636	)		(270,426	)		(294,626	)
Net loss		(570,501	)		(498,485	)		(268,427	)		(393,637	)		(408,920	)
Basic loss per share from operations	$	(1.59	)	$	(1.77	)	$	(2.53	)	$	(3.29	)	$	(3.54	)
Diluted loss per share from operations	$	(1.59	)	$	(1.77	)	$	(2.53	)	$	(3.29	)	$	(3.54	)
Basic loss per share	$	(2.37	)	$	(4.56	)	$	(2.79	)	$	(4.78	)	$	(4.92	)
Diluted loss per share	$	(2.37	)	$	(4.56	)	$	(2.79	)	$	(4.78	)	$	(4.92	)
Operating loss (U.S. GAAP)		(382,297	)		(196,521	)		(246,242	)		(270,426	)		(294,626	)
Net loss (U.S. GAAP)		(584,914	)		(498,167	)		(250,116	)		(396,166	)		(432,007	)
Comprehensive loss (U.S. GAAP)		(586,766	)		(495,270	)		(251,016	)		(396,166	)		(432,007	)
Basic loss per share from operations (U.S. GAAP)	$	(1.59	)	$	(1.80	)	$	(2.56	)	$	(3.29	)	$	(3.54	)
Diluted loss per share from operations (U.S. GAAP)	$	(1.59	)	$	(1.80	)	$	(2.56	)	$	(3.29	)	$	(3.54	)
Basic loss per share (U.S. GAAP)	$	(2.43	)	$	(4.56	)	$	(2.60	)	$	(4.81	)	$	(5.20	)
Diluted loss per share (U.S. GAAP)	$	(2.43	)	$	(4.56	)	$	(2.60	)	$	(4.81	)	$	(5.20	)

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							As at December 31,
	2002			2001				2000			1999			1998
(in thousands of dollars,
except for the data relating to shares)
Balance Sheet Data:
Total assets		912,854			1,395,259				1,209,226			817,850			684,676
Shareholders’ deficiency		(1,297,226	)		(726,725	)			(667,561	)		(796,037	)		(402,981	)
Share capital		1,167,678			1,167,371				728,050			327,599			313,154
Warrants		1,770			2,077				2,077			5,625			19,489
Deficit		2,466,674			1,896,173				1,397,688			1,129,261			735,624
Total assets (U.S. GAAP)		911,548			1,410,696				1,220,970			812,183			681,358
Shareholders’ deficiency (U.S. GAAP)		(1,298,677	)		(713,763	)			(654,917	)		(801,704	)		(406,119	)
Share capital (U.S. GAAP)		1,228,401			1,228,094				788,773			388,322			373,877
Warrants (U.S. GAAP)		1,770			2,077				2,077			5,625			19,489
Deficit (U.S. GAAP)		2,528,848			1,943,934				1,445,767			1,195,651			799,485
Accumulated other comprehensive income (loss), end of period (U.S. GAAP)		145			1,997				(900	)		—			—
Other Data:
Common Shares		27,631,537			27,631,537				31,665,275			32,780,071			33,020,071
Class A Non-Voting Shares		9,590,000			9,590,000				9,590,000			—			—
Class B Non-Voting Shares		202,994,911			202,951,539				24,160,642			22,141,195			19,878,060
Number of shares outstanding at the end of the period		240,216,448			240,173,076				65,415,917			54,921,266			52,898,131

Exchange Rate Data

     The following table sets forth the exchange rates for one U.S. dollar in effect at the end of the periods noted and the average of the exchange rates on the last day of each month during such periods. The exchange rates expressed in Canadian dollars are based on the noon buying rate as reported by the Federal Reserve Bank of New York. On June 17, 2003, the noon buying rate was $0.7467 per U.S. dollar and the inverse of the noon buying rate was $1.3393 per Canadian dollar.

					2003						2002
	May		April		March		February		January		December
Highest exchange rate during period		0.7437		0.6975		0.6822		0.6720		0.6570		0.6461
Lowest exchange rate during period		0.7032		0.6737		0.6709		0.6530		0.6349		0.6329

					Year ended December 31,
	2002		2001			2000		1999		1998
Exchange rate at the end of period		0.6329		0.6279			0.6669		0.6925		0.6504
Average exchange rate during period (1)		0.6370		0.6446			0.6726		0.6746		0.6722

(1) The average of the exchange rates on the last day of each month during the applicable period.

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RISK FACTORS

     For a discussion of certain other possible risk factors, readers should also refer to the sections titled “Liquidity and Capital Resources” and “Risk and Uncertainties” contained in item 5 of this annual report.

Microcell will need to obtain financing in addition to its already substantial debt, which may limit its financial flexibility and make it vulnerable to economic downturns.

     The current business plan of Microcell does not require additional post-reorganization financing assuming it is implemented without material variances; however, if actual results vary from the business plan and if the assumptions underlying the business plan were to change, additional funds may be required. Actual amounts of funds required may vary materially from these estimates and additional funds may be required as a result.

     Sources of funding for Microcell’s further financing requirements may include, in addition to the credit facility of $25 million, which may be increased up to $75 million, established in favor of Solutions (the “Tranche A Exit Facility”), additional bank financing, vendor financing, public offerings or private placements of equity or debt securities, capital contributions from shareholders and disposition of assets. Pursuant to the Plan, the Company entered into credit agreements (collectively the “New Credit Facilities”) relating to (1) the Tranche A Exit Facility; (2) a term loan of Solutions consisting of Canadian dollar series in the amount of Cdn.$100,000,000 and a U.S. dollar series in the amount of the U.S. dollar equivalent of Cdn.$200,000,000 (the “Tranche B Debt”); and (3) a term loan of Solutions in the aggregate amount of $50,000,000 (the “Tranche C Debt”). There can be no assurance that additional financing will be available to Microcell or, if available, that it can be obtained on a timely basis and on terms acceptable to Microcell and within the limitations contained in the New Credit Facilities. Failure to maintain or increase the Tranche A Exit Facility or such additional financing could result in the delay or modification of Microcell’s network level of services or in the delay or failure to meet license conditions, which could result in a loss of the PCS License and/or the MCS Licenses. Any of these events could impair Microcell’s ability to meet its debt service requirements and could have a material effect on its business.

     The New Credit Facilities contain restrictive covenants which may affect, and in some cases significantly limit or prohibit, among other things, Microcell’s ability to incur indebtedness, make prepayments of certain indebtedness, create liens, sell assets, make capital expenditures and engage in acquisitions, mergers, amalgamations and consolidations. In addition, the New Credit Facilities require Microcell to maintain certain financial ratios, which may include EBITDA levels, ARPU levels, liquidity levels, subscriber or revenue levels and maximum levels of capital expenditures. If Microcell fails to comply with the various covenants of its indebtedness, it will be in default under the terms thereof, which would permit holders of such indebtedness to accelerate the maturity of such indebtedness and could cause defaults under other indebtedness or agreements. In such circumstances, the lenders under the New Credit Facilities could foreclose upon all or substantially all of the assets of Microcell and its subsidiaries (excluding Inukshuk), which will be pledged to secure the obligations of Microcell and Solutions.

     The total long-term debt of Microcell as at May 1, 2003 is $350 million under Canadian GAAP and under U.S. GAAP. Each of the New Credit Facilities includes conditions and restrictions relating to the operations and activities of Microcell and the ability to incur additional indebtedness. A portion of Microcell’s interest costs on some of its indebtedness may be added to principal and all or a portion of the accrued dividends on the dividend bearing series of First Preferred Shares and the Second Preferred Shares may be added to redemption prices therefor, thereby further increasing Microcell’s leverage.

     The level of Microcell’s indebtedness could have consequences, including on: (1) Microcell’s ability to obtain additional financing in the future for capital expenditures, working capital, operating losses, debt service requirements or other purposes; (2) Microcell’s flexibility in planning for, or reacting to, changes to its business and market conditions; (3) Microcell’s ability to compete; and (4) Microcell’s vulnerability in the event of a downturn in its business.

Microcell may not be able to maintain its operations if the sources of funding on which it is relying become unavailable

     Microcell’s ability to meet its near term funding requirements is dependent upon a number of factors, including the revenue generated by Solutions, its existing cash balances, the continued availability of, and its ability to obtain and to draw upon, the Tranche A Exit Facility or any alternative financing.

Microcell expects to incur operating losses in the future, which may limit its ability to service its debt

     Microcell may experience growth-related capital requirements arising from the funding of network capacity and maintenance and the cost of acquiring new PCS customers. The ability to generate positive net income and cash flow from operations in the future will be dependent upon various factors, including the level of market acceptance of Microcell’s services, the degree of competition encountered by Microcell, the cost of acquiring new customers, technology risks and general economic conditions and regulatory

7

requirements. There can be no assurance that Microcell will achieve or sustain operating profitability or positive cash flow from operating activities. If Microcell cannot achieve operating profitability or positive cash flow from operating activities, it may not be able to meet its debt service or working capital requirements or obtain additional capital required to meet all of its cash requirements. In addition, Microcell is required to make interest payments under the New Credit Facilities and will be required to make payments of principal thereunder.

Microcell’s future performance will depend on its ability to succeed in intensely competitive markets

     Competition in the wireless communications industry is intense. The success of Microcell’s PCS business depends upon its ability to compete with other wireless telecommunications service providers in Canada with respect to services, features and devices offered, the technical quality of the wireless system, customer service, system coverage, capacity and price. Microcell competes with other cellular, enhanced specialized mobile radio (“ESMR”) and PCS providers, such as Rogers Wireless Communications Inc. and its affiliated entities (“Rogers”), Telus Corporation and its affiliated entities (“Telus”) and Bell Mobility Inc. and its former Mobility Canada Partners (excluding Telus) (the “Bell Mobility Partners”). In addition, the number of competitors could increase through the licensing to new competitors of additional spectrum, through reselling or wholesaling, such as offered by Microcell, or through a relaxation on the restrictions to foreign participation in the Canadian telecommunications sector. See “Risk Factors — Government Regulation” in this item 3.

     There can be no assurance that Microcell will be able to compete successfully in this environment or that other technologies and products that are more commercially effective than Microcell’s technologies and products will not be developed.

     In addition, in order to compete effectively, Microcell subsidizes the sale of its handsets. There can be no assurance as to the amount of such subsidy or that the appropriate subsidy would not materially adversely affect Microcell’s future capital requirements or results of operations. Microcell cannot predict what impact competition and the introduction of new technologies, products and services will have on the growth of its subscriber base or on the pricing of its current services.

     Competition in the broadband access sector in Canada is also intense. The incumbent local exchange carriers (“ILEC“s) and licensed cable operators are currently the dominant players in the provision of broadband access to the Internet in Canada. There can be no assurance that Inukshuk, with its planned MCS services, will be able to compete successfully in this environment or that other technologies and products that are more commercially effective than MCS technologies and products will not be developed.

Microcell’s choice of technology for its PCS and MCS networks presents certain technological and market risks for the Company

     Industry Canada has not mandated any technology protocols for PCS or MCS operators, leaving each licensee free to select among several competing technologies that have sufficient technological differences to preclude their interoperability. Although Microcell has chosen Global System for Mobile Communications (“GSM”) technology for deployment in its PCS network, and believes that GSM offers Microcell significant advantages over other principal competing technologies, there are certain technological and market risks with respect to deployment of GSM.

     MCS technology and equipment suppliers have yet to be selected for Inukshuk’s MCS network deployment. However, many of the technologies being considered are still in an early stage of development, which places certain technological and market risks with respect to their deployment, performance and ongoing availability.

Rapid changes to the technology used in Microcell’s business may make its technology obsolete or require it to make large capital expenditures

     The wireless telecommunications industry is experiencing significant technological change, as evidenced by evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. Such continuing technological advances make it difficult to predict the extent of future competition with cellular, PCS, paging and other services. As a result, there can be no assurance that existing, proposed or as yet undeveloped technologies will not become dominant in the future and render PCS less profitable or even obsolete.

     Microcell may be required to make more capital expenditures than are currently expected if suppliers fail to meet anticipated schedules, a technology’s performance falls short of expectations or commercial success is not achieved.

The actual or perceived health risks of wireless communications devices could have a material adverse effect on Microcell’s business

     Reports have suggested that certain radio frequency emissions from wireless communications transmission equipment and handsets may be linked to certain medical conditions, such as cancer. Scientific investigations are ongoing to review whether radio emissions from wireless handsets and radio transmitters used in connection with wireless technologies pose health concerns, including

8

interference with hearing aids, pacemakers and other medical equipment and devices. There can be no assurance that the findings from such studies will not have a material adverse effect on Microcell’s business or will not lead to changes in government regulation. The actual or perceived health risks of wireless communications devices could adversely affect wireless communications service providers, including Microcell, through reduced subscriber growth, reduced network usage per subscriber, the threat of product liability lawsuits or reduced availability of financing to the wireless communications industry.

Microcell is subject to governmental regulation and licensing requirements, which may increase its operating costs and affect its ownership structure

     The use of radio spectrum is regulated by Industry Canada pursuant to the Radiocommunication Act (Canada) (the “Radiocommunication Act”). Radio and spectrum licenses are issued for a term and may be renewed at Industry Canada’s discretion. They may be suspended or revoked for cause, including failure to comply with the conditions of license, although revocation is rare, and licenses are usually renewed upon expiration. Industry Canada regulation, described further under the headings “Regulation Framework” in item 4, and “Risk Factors — PCS License Conditions and Fees” and “Risk Factors — MCS Licenses Conditions and Fees” in this item 3, can materially affect the Company’s costs and operations.

     As the owner and operator of Microcell’s PCS network and therefore a facilities-based telecommunications carrier, Solutions is a “Canadian carrier” pursuant to the Telecommunications Act (Canada) (the “Telecommunications Act”), and therefore subject to regulation by the Canadian Radio-television and Telecommunications Commission (“CRTC”). Inukshuk is expected to be a Canadian carrier. CRTC regulation, described further under the heading “Regulations” in item 4 can materially affect Microcell’s services and activities.

     Solutions and Inukshuk are required, as radiocommunication carriers and by the conditions of their respective licenses, to comply with the Canadian ownership and control provisions established in the Telecommunications Act and the Radiocommunication Act (the “Canadian Ownership and Control Provisions”). The Canadian Ownership and Control Provisions must also be respected by Solutions and Inukshuk to maintain their eligibility as Canadian carriers under the Telecommunications Act. Microcell, as the parent corporation of Solutions and Inukshuk, must also comply with the Canadian Ownership and Control Provisions, and failure to do so may affect the ability of Solutions and Inukshuk to operate as Canadian carriers and to hold and renew the PCS License and the MCS Licenses. Microcell believes that it and its subsidiaries currently comply with the Canadian Ownership and Control Provisions.

     In November of 2002, Industry Canada initiated a review of the Canadian Ownership and Control Provisions. The review is described further under the heading “Foreign Ownership Restrictions” in item 4. If greater foreign participation is allowed in the Canadian telecommunications sector following the review, this could lead to the opportunity for further foreign investment in Microcell, as well as more and stronger competitors to Microcell.

     Ongoing CRTC proceedings and future proceedings, as well as policies and regulations of Industry Canada and other governmental departments and agencies may have an influence on Microcell’s strategies, and may have a material impact on the Company.

Microcell’s PCS License imposes fees and significant conditions on Microcell’s continued operations, and may not be renewed in the future

     In March of 2001, Industry Canada renewed the Company’s PCS License for a term of five years expiring on March 31, 2006, with conditions unchanged from the initial license term. The principal PCS License conditions are described under the heading “Regulation Framework — PCS License Conditions and Fees” in item 4.

     Industry Canada has the authority at any time to modify a license to ensure the efficient and orderly development of radiocommunications facilities and services in Canada. Industry Canada also has the authority to suspend or revoke a license if the license holder has contravened the Radiocommunication Act or terms and conditions of its license after giving the holder of the license a reasonable opportunity to make representations. There can be no assurance that the PCS License will be renewed, or if renewed, that such renewal will be on the same terms and conditions, or with the same fee structure.

     In this regard, in March 2001, Industry Canada announced its intention to initiate a public consultation process to review the cellular and PCS license conditions, terms and fees. This consultation was launched on December 21, 2002, with the release of Canada Gazette Notice DGRB-004-02, “Consultation on a New Fee and Licensing Regime for Cellular and Incumbent Personal Communications Services (PCS) Licensees”. Issues raised for consultation include the following:

• To extend the cellular and PCS licenses to ten-year terms from the current five, meaning the PCS License term would be extended to 2011 from the current 2006 expiry date;

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• To allow the cellular and PCS licensees to benefit from more liberal spectrum disposition rights, including the ability to transfer in whole or in part the assigned spectrum in both the geographic and spectral domains;

• To modify the current cellular and PCS license fee regime from one requiring payment on a site by site basis to a “spectrum license”, whereby a licensee pays for total spectrum assigned;

• That there be no fee distinction between PCS and cellular spectrum; that is, for each assigned MHz, cellular and PCS licensees will be charged the same fee. Based on the transitional figures proposed in the Licensing Review document, 30 MHz of national PCS spectrum, such as Solutions holds today, would attract annual “spectrum license” fees of $45 million in 2011; and

• To maintain the obligation that analog roaming and resale be offered by cellular licensees to PCS licensees.

     While the changes to the cellular and PCS license conditions and fees proposed in the consultation process have not been adopted, Industry Canada has stated an intention for any revisions eventually adopted following the consultation to be in effect by April of 2004. There can be no assurance, if there are any changes to the PCS license terms, conditions or fee structure eventually introduced, that these will not materially impact Microcell and Solutions.

Inukshuk may have difficulty meeting the requirements of the MCS Licenses, which could result in penalties, including the modification or revocation of the MCS Licenses

     On December 21, 2001, Industry Canada issued to Inukshuk ten-year MCS Licenses running to March 31, 2011, for twelve license service areas across Canada. The MCS licenses fee structure and conditions attaching to the MCS Licenses are described under the heading “Regulation — MCS Licenses Conditions and Fees” in item 4 of this annual report.

     Among the MCS Licenses conditions, Inukshuk must obtain prior Ministerial approval, following full review by Industry Canada, for any application to transfer or assign the MCS Licenses, including any disposition of the rights and obligations of the licenses and any change, which would have a material effect on the ownership or control in fact of the licensee. The transactions described in the Plan, which have led to a change of control of Inukshuk, received interim approval by Industry Canada on April 7, 2003. Industry Canada’s final approval is subject to completion of a review demonstrating compliance with the Canada Ownership and Control Provisions.

     Industry Canada has the authority at any time to modify a license to ensure the efficient and orderly development of radiocommunications facilities and services in Canada. Industry Canada also has the authority to suspend or revoke a license if the license holder has contravened the Radiocommunication Act or the terms and conditions of its license after giving the holder of the license a reasonable opportunity to make representations.

     In this regard, the difficulties Inukshuk has had to raise adequate financing, described further in the section “Broadband Wireless Business” in item 4, have led to delays in Inukshuk’s initial MCS deployment commitments, and have led to Inukshuk suspending further payments to fund learning activities committed to in the initial MCS license application to Industry Canada. Recognizing extenuating circumstances, on April 2, 2003, Industry Canada extended the timeline on license conditions relating to system deployment and the learning activities to March 31, 2004. There can be no assurance that failure to meet conditions of the MCS Licenses will not result in the application of penalties pursuant to the Radiocommunication Act or other applicable legislation or regulations, including suspension or revocation of the MCS Licenses.

     On November 16, 2001, Industry Canada announced, consistent with an earlier decision by the Federal Communications Commission of the United States, that Canada would henceforth allow both fixed and mobile services in the MCS frequency band. At the same time, Industry Canada announced its intention to initiate a consultation process on licensing considerations arising from such change. There can also be no assurance that the MCS Licenses terms, conditions or fee structure will not change following the announced consultation, which could materially affect Inukshuk’s operations or costs.

The buildout of Inukshuk’s network will require significant capital, and Microcell could lose its entire investment in Inukshuk

     Inukshuk intends to build across Canada a broadband wireless access network using MCS technology. The building of the data network will require significant capital investment. Inukshuk is a start-up operation with nominal capital resources. The New Credit Facilities limit the amount that Microcell can invest in Inukshuk. The cash requirements of Inukshuk may exceed such limits. In such an event, Inukshuk may not be able to raise sufficient capital to fund its operations. There can be no assurance that Inukshuk will be successful in building the data network or that Inukshuk will be profitable. If Inukshuk is not successful, Microcell may lose its entire investment in Inukshuk.

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Microcell may not be able to retain a significant portion of its existing customer base, which could impair its future performance

     The future success of Microcell will depend, in large part, on its ability to retain a significant portion of Microcell’s existing customer base, expand the business relationships with such customers, and attract and retain new customers. There can be no assurance that Microcell will be able to maintain a significant portion of the current customer base, increase the amount of business done with some or all these customers, or grow the existing customer base. Failure by Microcell to maintain a significant portion of its existing customer base and to grow that base would have a material adverse effect on future performance.

If Microcell cannot limit customer churn, it would be forced to incur additional expenses to recruit new customers

     Microcell has experienced rapid growth and development in a relatively short period. One of its biggest challenges, as it has grown and more recently, has been to limit customer churn. The results of operations of telecommunications service providers can be significantly affected by subscriber cancellations. The sales and marketing costs associated with attracting new subscribers are substantial relative to the costs of providing service to existing customers. Because the telecommunications business is characterized by high fixed costs, disconnections directly and adversely affect EBITDA. An increase in the subscriber cancellation rate could have a material adverse effect on Microcell.

     Factors contributing to the increase in customer churn experienced during 2002 included the negative publicity surrounding Microcell and its financial condition, and the decision to disconnect some of its delinquent customers. The successful implementation of Microcell’s business plan depends, among other things, upon a reduction in the recent rate of customer churn. There can be no assurance, however, that Microcell will successfully accomplish this or that churn will not increase.

Microcell is subject to currency exchange risks, which may negatively impact its financial results and may increase its costs to repay its debts

     As most of Microcell’s revenues are expected to be received in Canadian dollars, Microcell is exposed to foreign exchange risk on payments of interest and repayment of principal under any U.S. dollar denominated portion of its indebtedness.

     Although Microcell may enter into transactions to hedge, up to a certain limit, the exchange rate risk with respect to its other U.S. dollar-denominated debt and transactions, there can be no assurance that Microcell will engage in such transactions or, if Microcell decides to engage in any such transaction, that it will be successful and that changes in exchange rates will not have a material adverse effect on Microcell’s ability to make payments in respect of its U.S. dollar-denominated debt. Such transactions may require that Microcell provide cash or other collateral to secure its obligations.

     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 loss or gain on the translation of any U.S. cash and cash equivalents or U.S. dollar-denominated debt into Canadian currency. Such foreign exchange gain or loss on the translation of U.S. dollar-denominated long-term debt is included in income as it arises. Consequently, Microcell’s reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses. There can be no assurance that changes in the exchange rate will not have a material adverse effect on Microcell or on its ability to make payments in respect of its U.S. dollar-denominated debt.

Microcell’s holding company structure may make it difficult to access cash flow from the operating companies and may result in structural subordination of certain of its outstanding securities

     Microcell is a holding company with no material external sources of income. Substantially all of Microcell’s operations are conducted through Solutions. Microcell’s cash flow and, consequently, its ability to meet its dividend payment obligations or interest payment obligations, as the case may be, will be dependent upon the cash flow of Solutions and the payment of funds by Solutions to Microcell in the form of payment of management fees, reimbursement of loans, interest, dividends, advances or otherwise. Microcell’s subsidiaries, including Solutions, will be separate and distinct legal entities and will have no obligation, contingent or otherwise, to make any funds available to Microcell, whether in the form of loans, dividends or otherwise except for their obligation to pay for the services rendered by Microcell, and to reimburse the loans made to them by Microcell, if any, and the interest thereon. Any right of Microcell to receive assets of its subsidiaries upon their liquidation or reorganization will be structurally subordinated to the claims of such subsidiaries’ creditors (including tax authorities, trade creditors and lenders).

Microcell may not be able to attract and retain key personnel and adequately staff its operations, which could impair the execution of its business plan

     Microcell’s successful transition following the implementation of the Plan is dependent in part on its ability to retain and motivate its executive officers and key personnel. There can be no assurance that Microcell will be able to retain or employ qualified management and technical personnel. While Microcell will enter into employment agreements with certain members of its senior management, should any of these persons be unable or unwilling to continue their employment with Microcell, business aspects of

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Microcell could be materially and adversely affected. Deterioration of Microcell’s business or loss of a significant number of key personnel could have a material adverse effect on Microcell and may threaten its ability to survive as a going concern.

Any development or growth on Microcell’s part could increase its indebtedness and its expenses

     Microcell expects to experience growth and development under the new business strategy described under the heading “PCS Business Strategy” in item 4. Any future growth of the business would require, among other things, the development and introduction of new products, control of expenses related to the expansion of its telecommunication network and customer base and the management of additional demands on its customer support, sales and marketing, administrative resources and network infrastructure. If Microcell is unable to satisfy these requirements, or if it is otherwise unable to manage growth effectively, Microcell’s operations and financial condition could be materially adversely affected.

If the companies in which Microcell holds a minority interest require additional financing, the value of Microcell’s investment in these companies could be reduced or its ownership interest could be diluted

     Microcell has minority or non-controlling investments in certain entities. Some of these investee companies may require substantial amounts of additional capital, and their ability to obtain that financing will depend, in part, on their ability to access the capital or lending markets, which will be subject not only to the performance of their business and prospects, but to conditions in the capital markets generally. If such capital is not available or is not forthcoming on acceptable terms, the value of Microcell’s investments in those companies could decrease. Further, if such companies were to issue additional equity securities, it is likely that Microcell will not be able to participate in such issuance, which could lead to substantial dilution of the value of its investments.

Microcell is subject to change of control provisions which could limit its ability to enter into transactions which could benefit its shareholders

     Certain provisions of the New Credit Facilities require repayment or give the lenders or holders thereunder the option to require repayment upon certain change of control transactions, could have the effect of delaying or preventing transactions involving a change of control of Microcell and its subsidiaries, including transactions in which shareholders might otherwise receive a substantial premium for their shares over the then current market prices, and may limit the ability of shareholders of Microcell to approve transactions that they may deem to be in their best interest.

     The Articles of Incorporation of Microcell contain provisions to reflect the restrictions referred to under the heading “Corporate Stability Provisions” in item 10 which may have the effect of preventing or making transactions involving a change of control of Microcell more difficult. The Articles of Incorporation of Microcell also contain provisions to reflect the powers of Microcell referred to under the heading “Regulation — Foreign Ownership Restrictions” in item 4 to ensure that Microcell and its subsidiaries remain compliant with the Canadian Ownership and Control Provisions.

     The shareholders’ rights plan of Microcell implemented pursuant to the Plan (the “Rights Plan”), may have a significant anti-takeover effect. The Rights Plan has the potential to significantly dilute the ownership interests of an acquiror of shares of Microcell, and therefore may have the effect of delaying, deterring or preventing a change in control of Microcell.

Microcell may not be able to pay dividends on or redeem its Preferred Shares

     Under the CBCA, Microcell’s governing law, unless a corporation meets certain financial tests it cannot pay dividends on or redeem its capital stock, including its preferred shares issued May 1, 2003. Microcell may not meet such tests as determined under the CBCA unless it generates sufficient earnings and otherwise satisfies the relevant tests, and may be unable to pay dividends on or redeem any of the shares of its share capital, including the dividend bearing series of Preferred Shares, if issued, unless and until such time as the New Board is satisfied it meets such tests.

The market for Microcell’s securities may be more volatile than in the past as a result of the Plan

     With the implementation of the Plan, holders of Microcell’s securities may prefer to liquidate their investment rather than hold such securities on a long-term basis. Accordingly, the market, if any, for Microcell’s securities may be volatile, at least for an initial period, and indeed may be depressed for a period of time immediately following the implementation of the Plan until the market has had time to absorb these sales and to observe the performance of Microcell. In the case of shares in the capital of Microcell, other factors, such as statutory restrictions on transferability and the likelihood that Microcell will not declare dividends other than dividends on the Preferred Shares for the foreseeable future, may further depress the market for such shares.

The Class A Restricted Voting Shares and Class B Non-Voting Shares may be diluted by further issuances

     The issuance of additional shares of Class A Restricted Voting Shares and Class B Non-Voting Shares upon exercise of the Warrants will dilute the holders of equity of Microcell. In addition, issuance of shares of Class A Restricted Voting Shares or Class B

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Non-Voting Shares to management and employees of Microcell and its subsidiaries pursuant to the Stock Option Plan and equity issuances under the Stock Purchase Plan and will result in further dilution to holders of equity of Microcell.

ITEM 4 — INFORMATION ABOUT THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

Corporate Information

     The Company was incorporated in Canada pursuant to the CBCA on April 28, 2003 under the name 4130910 Canada Inc. and changed its name on May 1, 2003 to Microcell Telecommunications Inc./Microcell Télécommunications Inc. The Company, which is the successor corporation of Old Microcell, was formed as a holding company for Old Microcell pursuant to the Plan. A copy of the Plan is annexed to the Circular filed on Form 6-K on February 20, 2003. Old Microcell was incorporated pursuant to the CBCA on October 16, 1992.

     The Company’s principal place of business is located at 800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec, Canada H5A 1K3 and its registered office is located at 1250 René-Lévesque blvd. West, 38th floor, Montreal, Quebec, Canada H3B 4W8. Our telephone number is (514) 937-2121. CT Corporation System, located at 111 Eighth Avenue, New York, NY 10011, (212) 894-8940, acts as our agent for service of process in the United States.

Capital Restructuring

     At the time of the release of its second quarter 2002 results on August 9, 2002, the Company announced that there was significant uncertainty regarding its ability to continue as a going concern, such ability being dependent, among other factors, on the Company’s ability to reduce its financing costs and improve its liquidity and operating performance. The Company also announced on that date that it had retained the services of Rothschild Inc. and NM Rothschild & Sons Canada Limited (collectively referred to as “Rothschild”) as financial advisor and formed, in August 2002, a special committee of the Old Board composed of three independent directors (the “Special Committee”) with a view to evaluating various strategic options in the circumstances. In light of the going concern uncertainty, the mandate of the Special Committee was to review and evaluate the alternatives of the Company with a view to reducing its financing costs and improving its liquidity. To that end, the Special Committee obtained the advice and recommendations of Rothschild. The significant uncertainty resulted from the fact that the Company disclosed that it believed it would be in default of certain covenants in its long-term debt agreements within a twelve-month period, unless it could successfully renegotiate some of these covenants. With such default, the senior secured lenders could have chosen not to provide the Company with further access to funds under the senior secured revolving credit facility and could also accelerate debt repayment.

     On October 31, 2002, the Company entered into a forbearance and amending agreement with its secured bank lenders in which the lenders agreed to forbear until December 23, 2002, subject to certain conditions, the exercise of any rights with respect to certain possible defaults. The covenants to which the forbearance agreement applied related to the non-payment of interest on the 14% Senior Discount Notes due June 1, 2006 of Microcell (the “2006 Notes”) and the possibility of the non-payment to a supplier under a material contract. On December 2, 2002, the Company announced that it would not make its interest payment on its 2006 Notes due on that day. Before the end of the forbearance period, the Company reached an agreement with the supplier on the amount due and settled such amount.

     On December 23, 2002 the Company announced that its secured lenders, holding approximately 74% of the outstanding secured debt, had agreed on the terms of a recapitalization plan. In this regard, the Company’s secured lenders agreed to forbear until January 6, 2003 the exercise of any rights with respect to a default resulting from the non-payment of interest on the 2006 Notes. Microcell also continued to have constructive discussions regarding the plan with the informal ad hoc committee of noteholders (the “AHB Committee”) formed to pursue discussions with the Company regarding its proposed recapitalization.

     On January 3, 2003, the Company announced that it had received signed commitments from certain of its secured lenders and noteholders, representing approximately 75% and 55% respectively of the estimated aggregate voting claims that may be represented at the secured creditors’ meeting and the affected unsecured creditors’ meeting. In view of its then current and anticipated financial position, the status of its discussions with financial and strategic investors, the non-payment of U.S.$29.3 million of interest due on the 2006 Notes in December 2002 and the options available to the Company under the circumstances, the Company elected to restructure its operations under the protection of the CCAA and filed for and received protection under the CCAA on January 3, 2003 in the form of an initial order granted by the Superior Court of the Province of Québec in the judicial district of Montreal (the “Court”) in respect of the Company and certain of its subsidiaries on January 3, 2003 (the “Initial Order”).

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     On February 19, 2003, the Company filed its Circular with the Canadian Securities Commissions, which included the Plan. Subsequently, on March 17, 2003 the Plan was voted upon and approved by 98% of the secured creditors and 100% of the affected unsecured creditors, representing 93% and 100%, respectively, of the total value of the secured claims and affected unsecured claims that were voted. On March 18, 2003, the Court issued a sanction order sanctioning the Plan (the “Sanction Order”). The Plan became effective on May 1, 2003.

Disclosure of Confidential Information

     At various times between October 2002 and December 2002, Microcell held discussions with certain members of the AHB Committee and its advisors with respect to the recapitalization of the Company’s capital structure. Such discussions were subject to the terms of confidentiality agreements. Such confidentiality agreements required the Company to disclose to the public that which, in its reasonable judgment, constituted a summary of previously confidential and material non-public information.

     On January 6, 2003, the Company filed on a Form 6-K a material change report to disclose a summary of such previously confidential and material non-public information in accordance with its obligations under such confidentiality agreements.

Capital Expenditures

     Microcell’s PCS network, based on the GSM technology, represents the main capital expenditures for the company and covers approximately 19 million people, or 61% of the Canadian population. Microcell has designed its PCS network to operate exclusively in the 1900 MHz frequency range. With 30 MHz of contiguous spectrum, Microcell has been able to design its PCS network so that its base station sites are appropriately spaced and located to provide optimal cost-effectiveness and continuous service throughout coverage areas. Microcell believes that such design permits its PCS network to provide high quality service even at cell edges. In addition, Microcell is using mini- and micro-base stations, off-air repeaters and in building distributed repeaters to cost-effectively improve the quality of outdoor and in-building coverage.

     In 2001, Microcell upgraded its entire GSM network to offer General Packet Radio Service (“GPRS”) technology, an over-the-air system for transmitting data on GSM networks. GPRS is a wireless technology standard that supports data communication through devices that enable “always on” Internet connectivity. GPRS technology converts wireless data into standard Internet packets, enabling interoperability between the Internet and a mobile wireless network. The GPRS method of transporting data optimizes network capacity by using bandwidth only when it is needed. In addition, several data transmissions from different users can share the same channel. The end result is next-generation technology that will allow end-users to cost-effectively remain constantly connected, and to send and receive data much faster.

     Microcell invested approximately $125 million, $277 million and $257 million in capital expenditures for the years ended December 31, 2002, 2001 and 2000 respectively. In addition, Microcell invested $130 million and $20 million in 2001 and 2000 respectively for the total acquisition of Inukshuk. The principal value in Inukshuk is represented by the MCS Licenses.

     With effective implementation of its capital restructuring plan on May 1, 2003, Microcell has strengthened its financial position. Now that this process is completed, Microcell’s goal is to re-establish itself as a strong competitor in the Canadian wireless market, providing affordable and innovative PCS services and positioning itself as a preferred access network for the mass market. The Company’s strategic direction is to focus primarily on its core PCS operations within the retail consumer and individual business user market segments.

     With Microcell’s network buildout substantially completed, capital expenditures for 2003 are projected to be between $80 and $90 million. The expenditures will be concentrated on maintenance and capacity improvements to allow for continued service quality, subscriber and usage growth, as well as on enhancement of the PCS coverage and signal strength in markets already being served.

BUSINESS OVERVIEW

     From its inception, the Company has been involved in the design and deployment of wireless communications services. In September 1994, the Company was issued an experimental license from Industry Canada to test PCS technologies operating in the 1900 MHz frequency range. The experimental license was used to deploy a pilot network in Montreal. At the end of 1995, Microcell was awarded the PCS License and began commercial deployment of its PCS network across Canada in 1996. In 2001, the PCS License was renewed for a second five-year term.

     The Company was one of four entities awarded PCS licenses by Industry Canada in 1995. In addition to the PCS License awarded to Microcell, a second national license for 30 MHz of spectrum was awarded at that time to a new PCS operator, Clearnet

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PCS Inc. (“Clearnet”), and two national licenses for 10 MHz of PCS spectrum each were awarded to the incumbent cellular operators at that time, Rogers and the former members of Mobility Personacom Canada Ltd. (“Mobility Canada”).

     Since May 1, 2003, the Company has carried on its operations through two principals wholly owned subsidiaries:

• Solutions which (1) is the holder of the PCS License, owns the PCS network and operates Microcell’s wholesale PCS business and (2) operates Microcell’s retail PCS business under the Fido® brand name, serving both consumer and corporate customers;

• Inukshuk, a company selected to be awarded MCS Licenses by Industry Canada in the spring of 2000 that cover some 30 million people in Canada; MCS spectrum allows for the deployment and operation of broadband wireless access networks.

PCS Business

PCS Business Strategy

     PCS is a generation of wireless telecommunications services based on advanced, secure, digital technology. Microcell currently offers a range of simply priced, affordable packages of feature-rich PCS, including secure digital voice transmission, prepaid services and enhanced customized value-added data services. Since its inception, Microcell has been pursuing a mass-market strategy to position itself as the customer’s preferred source of access for everyday communications needs.

     Microcell commercially launched its PCS services in the Greater Montreal area in November 1996 under the Fido brand name. The Company currently provides PCS coverage in a number of other census metropolitan areas and other communities and regions in Canada, including: St. John’s, Halifax, Québec City, Trois-Rivières, Sherbrooke, Ottawa-Hull, Oshawa, Toronto, Hamilton, St. Catharines-Niagara, Kitchener, London, Windsor, Winnipeg, Regina, Saskatoon, Edmonton, Calgary, Vancouver and Victoria. In addition, Microcell’s PCS network provides digital network coverage along certain Canadian highway corridors between urban areas and weekend destinations. Microcell estimates that its PCS network covers some 19 million people, or 61% of the Canadian population.

     Microcell is using GSM technology for its PCS network. It believes that GSM has significant advantages over other digital technologies, being a well developed technology. Having operated successfully for approximately twelve years, GSM has achieved substantial market acceptance. It is the most widely deployed digital wireless voice and data technology in the world and is currently used by 464 on-air networks in 168 countries and territories, providing commercial service to more than 763 million customers, including over 16 million GSM customers in North America. Microcell also believes that GSM network equipment prices and GSM handset prices benefit from greater economies of scale than other digital technologies. Microcell also benefits when GSM subscribers from other networks roam onto Microcell’s PCS network. Similarly, Microcell’s customers enjoy the benefits of global roaming on the networks of Microcell’s GSM roaming partners around the world. The Company has operational roaming agreements with almost all of the GSM operators in the United States and with 220 GSM operators worldwide in 116 countries.

     Beyond its PCS network coverage, Microcell provides analog roaming capabilities across the networks of other wireless operators in Canada. This increases the effective wireless coverage area available to its customers to some 94% of the Canadian population. Access to analog cellular coverage requires the use of dual-mode (analog-GSM) handsets.

     Microcell had 1,124,586 customers as at March 31, 2003, consisting of 513,985 Fido postpaid service subscribers and 610,601 Fido prepaid service subscribers.

     In order to strengthen its competitive position in the Canadian wireless industry, the Company underwent a thorough revision of its business plan in response to difficult financial market conditions and certain operating realities, primarily the slower-than-expected emergence and adoption of data-related services, and the competitive and operating challenges faced by the Company to acquire and support business accounts. Accordingly, the Company adjusted its strategic direction to focus primarily on core PCS voice operations within the retail consumer and individual business users market segments. In order to position its wireless service as a preferred means of communication for the mass market, the Company designed its postpaid service marketing strategy based on specific product attributes, such as big-minute bundles, per-second billing, no contract, worldwide roaming and competitive long-distance rates, while its prepaid service marketing strategy is centered on product features such as flexibility, spending control, simple, convenient and mobile airtime replenishment, postpaid-type rates per-minute pricing and bundled value-added services. This market positioning should enable the Company to acquire its fair share of new subscribers and to maximize its cash flow through focusing on certain higher-growth market segments and leveraging existing network infrastructure to offer enhanced voice and certain short messaging services (“SMS”)-based data services.

     Some key elements of the proposed business strategy of the Company, already or in the process of being implemented, include the following:

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(1)	scale back activities not related to the retail consumer and individual business users market segments;
(2)	allocate resources primarily to PCS activities with a high impact on the customer base; the allocation of resources to non-PCS operations will be kept to a minimum, unless these activities can be self-financed;
(3)	target mass-market retail consumer segments with the highest growth potential, such as the youth, young adult and urban professional markets, as well as individual/business users/small office/home office business users located in major metropolitan areas using direct-to-consumer distribution channels, including corporate-owned stores, third-party retailers, and a direct sales force;
(4)	offer simple, affordable and relevant PCS products, services and devices that meet the everyday personal and business needs of customers, while minimizing operating costs;
(5)	decrease the emphasis on data by adopting a “fast-follower” approach to reduce the costs and business risks associated with new product and service development;
(6)	leverage the existing customer base by offering a variety of enhanced value-added voice-related and SMS-based data services to encourage incremental usage and to maintain current levels of ARPU;
(7)	provide a superior level of customer service, invest in customer retention programs, and ensure customers are matched to the right payment method to optimize satisfaction and foster loyalty;
(8)	focus network improvements primarily on capacity and maintenance, rather than footprint expansion;
(9)	increase network capacity on a timely basis to support customer growth requirements and enhance existing network coverage through improvements to signal strength in markets already being served; and
(10)	discontinue active solicitation of wholesale business, while continuing to support existing third-party service providers and consider wholesale proposals.

     Microcell’s goal is to remain a leading provider of affordable and innovative PCS in Canada and to position itself as a preferred access network for the mass market. Key elements of Microcell’s positioning are:

• Build Awareness of PCS and the Fido Brand Name. Microcell is targeting mass market consumers, individual business users and small — to medium-sized businesses on a segmented basis. Microcell is marketing Fido® as the wireless communications service which provides superior customer value.

• Offer Superior Products and Services at Affordable Prices. Microcell offers simple packages of affordable, innovative and value- added PCS products and services that meet the everyday personal and business needs of customers. These are made available on a postpaid basis and, for customers seeking an alternative form of payment with added flexibility, on a prepaid basis. Microcell currently offers secure digital voice transmission, two-way e-mail and text messaging, enhanced voice and fax messaging, and a range of call management services. Microcell also offers higher-speed mobile data services based on GPRS technology.

• Offer Enhanced and Customized Value-Added Services. Microcell believes that it can improve future revenue growth by offering a wide range of enhanced customized value-added voice-related services and data-related services on any existing or future handheld device.

• Provide Superior Customer Service to Build Loyalty. In order to enhance the level of customer service and to maintain a high level of customer loyalty, Microcell has established its own internal customer service and call center, available seven days a week, to handle customer inquiries concerning activation, services, billing and collections, and network performance. Microcell also offers on-line activation and billing to its customers.

• Network Enhancements. Microcell has built its PCS network in a cost-effective manner. Microcell’s choice of the GSM standard allows it to benefit from a proven technology that is currently commercially available from multiple equipment vendors. Microcell has concentrated its network build-out in Canada’s densely populated urban areas, popular weekend destinations and certain highway corridors between the urban areas to ensure optimal network coverage for its target market segments. Given that Microcell’s GSM network build-out is substantially completed, future capital spending is expected to be concentrated on ongoing maintenance, increasing capacity to support increasing subscriber usage, as well as on improving signal strength in the markets already served.

• Wholesale PCS. In order to increase the utilization of its PCS network, Microcell has entered into wholesale service arrangements with non-affiliated companies to use its network to offer bundled wireless services to their customers.

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PCS Products and Services

     Postpaid PCS Voice Service. Microcell offers the following monthly price plans for its postpaid PCS service:

a)	Anytime:
	•	200 minutes of airtime for a flat rate of $20; or
	•	400 minutes of airtime for a flat rate of $40; or
	•	700 minutes of airtime for a flat rate of $70; or
	•	1,000 minutes of airtime for a flat rate of $100.
b)	1,000 Plus:
	•	1,000 minutes of airtime during evenings and weekends, 150 weekday minutes of airtime and minute tracker feature, for a flat rate of $30; or
	•	1,000 minutes of airtime during evenings and weekends, 300 weekday minutes of airtime and minute tracker feature for a flat rate of $45; or
	•	1,000 weekday minutes of airtime, 150 minutes of airtime during evenings and weekends and minute tracker feature, for a flat rate of $50.
c)	Bundles:
	•	300 minutes of airtime, 100 text messages, voice messaging and call display features, for a flat rate of $30; or
	•	400 minutes of airtime, 200 minutes of long distance within Canada and to the U.S., 50% discount on the rates for international calls, voice messaging and call display features, for a flat rate of $45; or
	•	1,000 minutes of airtime, unlimited airtime during evenings and weekends, minute tracker, voice messaging and call display features, for a flat rate of $100; or
	•	400 minutes of airtime, 5 Megabytes (“MB”) of mobile internet access, voice messaging and call display, for a flat rate of $45.

     Customers can add to their Anytime or Bundles monthly package (where applicable) the following options (1) unlimited airtime during evenings and weekends for $25 per month; (2) unlimited airtime during weekends for $15 per month; (3) 200 minutes of long distance within Canada and to the U.S. for $15 per month; and (4) a 50% discount on the rates on international calls for $5 per month. Monthly airtime includes call waiting, call forwarding, conference call features, minute tracker feature upon request (unless specifically included). Pay per usage services are also available: text and e-mail messaging at $0.10 per message sent and received, information and entertainment messaging and mobile internet.

     Microcell also offers, from time to time, promotional monthly airtime packages. As of May 31, 2003, the following promotional monthly airtime package was offered:

• 250 minutes of airtime, one free-day of local airtime per week for a flat rate of $25.

     Postpaid PCS voice service is billed on a per second basis.

     Beyond the bundled minutes, additional airtime is charged at the rate of $0.20 per minute for all monthly price plans, except for the Anytime and Bundles 1,000 minutes price plans where additional airtime is charged at a rate of $0.10 per minute. Long distance calls made from Canada to anywhere in Canada and the United States are billed at $0.10 per minute, while overseas rates are priced competitively with those of incumbent wireline telephone and alternative long-distance carriers. Microcell charges a single roaming rate of U.S.$0.20 per minute for its customers roaming in the United States. Microcell regularly bundles its airtime packages with selected service options to deliver superior value to its targeted customer segments.

     Prepaid PCS Voice Service. In 1998, Microcell introduced a prepaid wireless service whereby customers can purchase in advance of their usage airtime vouchers for a fixed validity period. Microcell currently offers various airtime vouchers:

• $15 with a 15 day validity period and a per minute rate of 15 cents;

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• $20 with a 20 day validity period and a per minute rate of 5 cents during evenings and weekends and 40 cents weekdays;

• $30 with a 30 day validity period and a per minute rate of 15 cents;

• $10 with a 30 day validity period and a per minute rate of 30 cents;

• $40 with a 40 day validity period and a per minute rate of 5 cents during evenings and weekends and 40 cents weekdays; and

• $25 with a 60 day validity period and a per minute rate of 30 cents.

     All prepaid airtime is usable any time of the day or week, and has been charged on a per-minute basis since September 16, 2002. Prepaid service includes call waiting, call forwarding, standard voice messaging and call display as well as text and e-mail messaging at $0.10 per message sent and received. Information and entertainment messaging are also available on a pay per use basis. The flexible nature of the Company’s prepaid pricing options have been designed to enable the two main prepaid customer target segments, the youth and young adults, to better control their monthly expenditures and benefit from greater perceived value.

     In recognition of the prepaid customer’s need for simple, convenient, and mobile airtime replenishment, the Company introduced a new service in October 2002 called InstantRefill. This is an SMS text message-based payment service that alerts Fido prepaid customers when their account balance is low and allows them to use their wireless handset to purchase additional airtime instantly by a pre-authorized bank account debit or by credit card. Customers can also purchase additional prepaid airtime at any of the Company’s retail points of purchase by credit card directly through the customer service center, or through most Canadian Imperial Bank of Commerce banking machines. Long-distance calls made by prepaid customers are charged at the same rate as for monthly postpaid price plans.

     PCS Data Service. Microcell completed deployment of its GPRS network in 2001. Once fully optimized, according to the Company’s GPRS suppliers, the technology is expected to allow for throughput data rates of up to 115 Kilobytes (“KB”) per second. As a result, Microcell has defined a host of new services and products that enable customers to gain access to wireless data applications. In September 2001, Microcell became the first Canadian wireless provider to provide the next generation of mobile data services based on GPRS wireless technology, and the first to introduce, in conjunction with VoiceStream Wireless Corporation, now known as T-Mobile USA Inc. (“T-Mobile”), data roaming capabilities in the North American market. The Company’s data-capable devices enable mobile access to the Internet, e-mail, and personal information management tools at various speeds. The following data-only GPRS monthly usage plans are currently available: $50 for unlimited usage for twelve months, $25 for 5 MB (each additional MB at $10) and $5 for 500 KB. GPRS-based data services are also available on a pay-per-use basis charged at 3¢ per KB. In addition, Microcell has identified a number of market-specific mobile data applications beyond the basic offering of “always on” Internet connectivity. The focus for business users is e-mail access and personal information management tools, while interactive services such as gaming and instant messaging are projected to be attractive to the consumer market.

     Microcell believes that, as data transmission technologies develop, a number of additional potential uses for such services will emerge.

     GSM Technology Features. Microcell’s choice of GSM digital technology enables Microcell to offer the following services and features:

• Secure Communications. Sophisticated GSM encryption algorithms that vary with each call provide increased call security to protect users against eavesdropping and significantly reduce the risk of cloning of subscriber information.

• Call Management. Microcell’s PCS network offers call management services including call display, call waiting, call forwarding, call blocking, caller identification blocking and call conferencing.

• Enhanced Battery Performance. GSM handsets consume, on average, less power than analog handsets. In contrast to analog handsets, which transmit at a constant rate of power, GSM handsets are able, for example, to determine the distance between a handset and a cell site and vary the wattage of the handset accordingly. This extends the amount of time a battery can be used on GSM networks without having to be recharged. According to manufacturers, some GSM handsets can deliver up to four hours of talk time and six days of standby time without recharging.

• Enhanced Wireless Data Transmission. Digital networks are capable of simultaneous voice and data communications. Microcell currently offers basic enhanced wireless data transmission services, such as two-way alphanumeric short messaging service, GPRS and fax messaging.

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• Subscriber identification module. Microcell’s GSM handsets hold a Subscriber Identification Module (“SIM”) that contains a microprocessor which protects against fraudulent use by identifying and authenticating each subscriber. The SIM card can also store details of the user’s services subscribed, telephone number, personalized directory and notifications of voice and data messages received. In addition, the SIM card will enable a subscriber roaming on another GSM network and to have access to comparable services. However, certain of these features are not available while customers are roaming on other GSM networks or on an analog cellular network.

• Ease of Use. Microcell provides easy to use, intuitive, menu-driven handsets from different manufacturers, such as Sony Ericsson Mobile Communications AB (“Sony Ericsson”), Nokia Products Limited (“Nokia”), VTech Telecommunications Canada Ltd. (“Vtech”) and Motorola Canada Limited (“Motorola”), that enable customers to make full use of the features available on GSM. Microcell also provides over-the-air service activation or subscriber profile management by transmitting changes in a subscriber’s feature package of services, including mobile number assignment, directly to the SIM card in the subscriber’s handset.

• Worldwide Roaming. Microcell’s subscribers are able to roam on to other GSM networks, operating either at the same 1900 MHz frequency, or on a different frequency through the use of a multi-band GSM handset. This roaming capability gives subscribers access to PCS service when traveling around the world. Access to roaming service requires Microcell to enter into roaming agreements with other GSM operators. Microcell has operational roaming agreements in place with almost all of the GSM operators in the United States and with more than 220 GSM operators in 116 countries worldwide.

Subscriber Base

     The chart below provides an annual summary of Microcell’s PCS subscribers and annual subscriber growth since 1997:

Year Ended December 31st	Subscribers			Net Increase			% Increase
1997		65,667			63,637			3,134.8	%
1998		282,174			216,507			329.7	%
1999		584,487			302,313			107.1	%
2000		922,527			338,040			57.8	%
2001		1,209,210			286,683			31.1	%
2002		1,164,521	(1)		(44,689	)(1)		(3.7%	)(1)

(1) During the second quarter of 2002, the Company removed 90,000 inactive prepaid customers from its retail customer base. The Company defines inactive prepaid customers as those who have not made or received a call for a period of more than 30 days. The 90,000 figure represents approximately the average monthly number of inactive accounts in the Company’s prepaid customer base in the last twelve months preceding the second quarter of 2002. By excluding these inactive accounts from the reported customer base, the Company believes that it is providing a more accurate representation of the Company’s quarterly prepaid operating statistics for average revenue per user and average monthly usage.

Sales and Marketing

     The guiding principle driving Microcell’s marketing strategy is that “Fido simplifies life”. The Company offers an array of leading-edge and affordable wireless services that meet the everyday personal and business needs of its customers. The Fido® brand plays a key role in product positioning, having differentiated itself in the Canadian wireless market by being perceived as savvy and trendy, yet at the same time trustworthy, customer-friendly, and innovative. The Company uses market-wide research to identify its best potential and most profitable, high-growth market segments, and to understand consumers’ needs and preferences in developing and delivering the right products and services in the most cost efficient manner.

     Products and services that are simple and easy to use reduce the need for customer service and optimize customer satisfaction. As a result, the Company enjoys a low cost of customer maintenance and a high level of efficiency in its call center operations. Unlike its Canadian competitors, Microcell does not require long-term contracts. Microcell also provides a 15-day satisfaction guarantee, bills its postpaid airtime by the second, and offers big-minute airtime bundles at affordable per-minute rates that can be used anytime and anywhere Fido PCS service is available.

     Microcell uses a segmented approach in acquiring and servicing customers. This approach is intended to support the growth of Microcell’s core wireless voice business, as well as its entry into the emerging wireless data market. As wireless penetration increases beyond the current penetration rate, the mass-market retail consumer is expected to make up a higher percentage of new net

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additions. The Company believes that Canada’s urban and suburban markets, where more than two-thirds of the Canadian population lives, are likely to be the most receptive markets for PCS going forward. Given this context, the Company is well positioned with the strength and positioning of its Fido® brand, combined with attractive postpaid and prepaid offers, which have allowed Microcell to achieve strong positions within the youth and young adult market (age 15-24) and the young professionals’ market (age 25-34) — two of the segments with the highest growth potential in Canada.

     In order to make PCS more affordable, Microcell subsidizes the sale of handsets — a practice also used by other Canadian wireless operators. Research has shown that a key driver of customer acquisition is handset selection and style. This factor is taking on greater importance as handset life cycles shorten. The Fido handset and device portfolio includes some leading-edge handsets, some launched as exclusive to Fido. The Company’s current handset and device line-up consists mainly of devices from Sony Ericsson, Nokia, Motorola and the Novatel Wireless Merlin GPRS PC Card.

     By establishing preferred business relationships with certain handset suppliers, the Company is able to obtain better pricing and limited-time exclusivity on some of their newest devices. The Company has positioned its postpaid service among high-value customers as a preferred means of communication, providing them with the added benefits of mobility, personalization of service, and Internet connectivity. This is done in part through an attractive handset line-up with high functionality that is fairly priced. The Company has positioned its prepaid service to allow an alternative means of payment with comparable value and services to the postpaid plans, yet with greater control over expenditures. By segmenting Fido service in this manner, the Company expects to better match potential customers to the most appropriate method of payment. This is expected to result in improved customer satisfaction and retention.

     With a relatively lower penetration rate of voice-based wireless service in Canada than in many other markets around the world, for example Europe and the United States, Microcell believes there remains good growth potential for wireless services in Canada, including for wireless data services. Data-services revenue in the wireless market has been slow to materialize due to a lack of consumer-oriented applications and devices. Microcell’s management believes that the penetration rate of data-related services will increase concurrently with the increase in the penetration rate of wireless services in Canada as awareness of data-related services grows with the commercial availability of a larger and wider variety of new and affordable devices.

     Short messaging services, instant messaging services, gaming applications, and the introduction of feature-rich, highly functional and affordable handsets are all projected to increase the level of wireless data-services traffic and usage.

Customer Service

     Microcell recognizes that superior customer service is vital in contributing to the long-term success of its business by helping to establish a loyal base of satisfied customers. Accordingly, Microcell has made customer service and satisfaction essential elements of its operating philosophy. Providing timely and accurate information concerning services, network coverage, billing and customer account information, as well as responding to general inquiries and correspondence, are important elements of a comprehensive customer service program that promotes customer goodwill.

     Microcell maintains a highly sophisticated monitoring and control system, a staff of customer service personnel and a well-trained technical staff to handle both routine and complex questions as they arise. These resources are available to customers seven days a week. Since 2002, Microcell has offered on-line billing services whereby its customers have access to billing information and have the ability to pay their invoices via the Internet. Microcell’s trained staff is located in stores and kiosks to promote its PCS products and services and provide information to customers. Each sales and customer service representative participates in a customized training program.

Distribution Network

     Microcell develops and maintains a distribution network that allows it to exert significant influence over the message delivered to its customers in order to set the right expectations for the customer and to control the cost of acquisition. Microcell has more than 5,500 points of sale at the retail level. These points of sale include corporate-owned stores and kiosks as well as third-party outlets, such as The Telephone Booth, Future Shop, and Wal-Mart. Microcell’s retail distribution network is also comprised of voucher-replenishment-only outlets through more than 3,000 Canadian Imperial Bank of Commerce automated teller machines.

GSM Network

     Microcell’s PCS network, based on the GSM technology, covers approximately 19 million people, or 61% of the Canadian population. Microcell has completed the greater part of its digital PCS network deployment plans and, going forward, will analyze, on a case-by-case basis, the merits of further deployment of the network. Future network deployment plans will focus on enhancing capacity and coverage, as well as improving signal strength in the markets already being served in order to support subscriber growth and current service level parameters.

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     Microcell has already deployed its GSM network along certain Canadian highway corridors between urban areas and weekend destinations. However, due to the high cost of PCS network build-out and the lack of necessary scale economies, the Company generally does not build its PCS network in sparsely-populated areas or in low-traffic density areas. Analog cellular networks currently serve many of these areas. Microcell has an analog roaming agreement with the former members of Mobility Canada, whose analog cellular networks are estimated to cover approximately 94% of the Canadian population. This agreement gives Microcell extended coverage to areas outside the PCS network range. Microcell expects that cellular providers will continue to offer analog cellular coverage for the foreseeable future. PCS customers using dual-mode (analog-GSM) handsets do not, however, have access to certain of the features and functions of PCS while operating on an analog cellular network.

     Microcell has designed its PCS network to operate exclusively in the 1900 MHz frequency range. With 30 MHz of contiguous spectrum, Microcell has been able to design its PCS network so that its base station sites are appropriately spaced and located to provide optimal cost-effectiveness and continuous service throughout coverage areas. Microcell believes that such design permits its PCS network to provide high quality service even at cell edges. In addition, Microcell is using mini- and micro-base stations, off-air repeaters and in building distributed repeaters to cost-effectively improve the quality of outdoor and in-building coverage.

     In 2001, Microcell upgraded its entire GSM network to offer GPRS, an over-the-air system for transmitting data on GSM networks. GPRS is a wireless technology standard that supports data communication through devices that enable “always on” Internet connectivity. GPRS technology converts wireless data into standard Internet packets, enabling interoperability between the Internet and a mobile wireless network. The GPRS method of transporting data optimizes network capacity by using bandwidth only when it is needed. In addition, several data transmissions from different users can share the same channel. The end result is next-generation technology that will allow end-users to cost-effectively remain constantly connected, and to send and receive data much faster.

Suppliers

     Network Equipment Vendors. Microcell and Nortel Networks Corporation (“Nortel”) are parties to the supply and installation contract dated as of December 20, 2001 as amended (the “Nortel Agreement”) entered into for the purchase by Solutions of GSM Products and eligible services from Nortel. The Nortel Agreement, containing no purchasing commitment, generally provides for Microcell’s purchase of hardware, software and services related to its GSM network and expires on December 31, 2004.

     The Company is also a party with Ericsson Canada Inc. (“Ericsson”) to the supply and installation contract (the “Ericsson Agreement”) entered into by Microcell and Ericsson for the purchase by Solutions of PCS products from Ericsson. The Ericsson Agreement, containing no purchasing commitment, generally provides for the Company’s purchase of hardware, software and services related to its PCS network and expires on December 31, 2003. The Ericsson Agreement contains an undertaking by the Company to purchase GPRS systems from Ericsson on an exclusive basis until the earliest of the following events occurs: (1) the purchase by the Company of a total of 100 MB per second of GPRS capacity for its PCS network and (2) June 8, 2004.

     Handset Suppliers. Microcell does not manufacture any of the handsets used in its operations. The high degree of compatibility among different manufacturers’ models of handsets allows Microcell not to be dependent upon any single source of handsets. The handsets used in Microcell’s operations are available for purchase from multiple sources, and Microcell anticipates that such equipment will continue to be available in the foreseeable future. Microcell is purchasing handsets primarily from Nokia, Vtech Telecommunications Canada Ltd., Sony Ericsson and Motorola.

Intellectual Property

     Fido® is a trademark registered by Solutions in Canada with the Registrar of Trademarks. Microcell Solutions®, Microcell Connexions® and Microcell® are trademarks registered by Microcell in Canada with the Registrar of Trademarks. Microcell files applications for registration of the trademarks that it intends to use in its business. Microcell intends to take appropriate measures to protect intellectual property that it develops. Under the Trade-Marks Act (Canada), the registration of a trademark takes effect on the date the certificate of registration is issued and continues to be in effect for a period of 15 years; such registration is renewable.

Broadband Wireless Internet Business

     In August 1999, the Company formed Inukshuk in conjunction with Look Communications (“Look”), a Canadian wireless cable operator and an independent Internet service provider. Inukshuk applied for new spectrum in the 2500 MHz range from Industry Canada to build across Canada a high-speed Internet Protocol-based wireless network, using MCS technology in 13 regional service areas. In the first quarter of 2000, Industry Canada selected Inukshuk to be awarded 12 of the 13 MCS Licenses, with the exception of the province of Saskatchewan, covering a territory in which approximately 30 million Canadians live. On December 21, 2001, Industry Canada confirmed Inukshuk’s licenses for a 10-year term, with a renewal date in March of 2011.

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     Microcell and Look initially each owned 50% of the issued and outstanding shares of Inukshuk. On January 29, 2001, Microcell acquired all of the shares of Inukshuk held by Look for an aggregate consideration of $150 million. Inukshuk is now a wholly owned subsidiary of Solutions.

     Inukshuk’s objective is to become Canada’s premier wholesale provider of broadband wireless access. To accomplish this, Inukshuk will offer broadband services across a wireless MCS network infrastructure. In Canada’s north, Inukshuk will work with its regional business partner, Nunanet Worldwide Communications Ltd. Inukshuk’s MCS network will be available on a wholesale basis to third party service providers. Inukshuk also intends to leverage the management and operating expertise, distribution channels, network assets, customer care, back office support and other strengths and assets of the Company.

     In accordance with the learning plan filed with its license applications, Inukshuk will invest the greater of 4% of its adjusted annual gross revenues or two times its license fees for the development of connectivity to outlying areas and feature and media rich learning content. To ensure the successful implementation of its learning plan, Inukshuk has created committees with members of the learning committees across Canada, which will advise Inukshuk on its learning plan implementation and recommend projects to be funded by Inukshuk.

     In Canada, high-speed Internet and other broadband services are currently provided by incumbent telephone companies with DSL technology, cable television operators and some new entrant telecommunications companies. Service is principally available in Canada’s urban markets, approximately 25% of Canadian households received high-speed Internet services in 2002 and the market is projected to continue to grow. Given this context of continued growth, Inukshuk’s MCS is projected to provide an attractive and competitive alternative to cable and DSL networks, as well as to extend broadband access to areas not currently covered by wireline systems.

     The Company had planned to build the MCS networks directly through Inukshuk. However, due to the current challenging capital market conditions, which have made raising financing difficult, Inukshuk has suspended building the MCS network on its own for the time being. Inukshuk is, however, continuing to seek out arrangements with third parties to advance the MCS project and deployment, but there can be no certainty any arrangements will be successfully concluded.

Investments Business

     GSM Capital. GSM Capital is a private equity fund dedicated to the development of new PCS products and services related to the GSM standard. Since 1997, Microcell has invested in GSM Capital in the form of subscriptions of units.

     Argo II. Since the first quarter of 2000, Microcell has been participating in a second fund, Argo II, which invests in companies developing products and services that address the requirements of the converging Internet and mobile telecommunications industries. The Company had committed to invest, in the form of a subscription for units, U.S.$10.0 million in Argo II and, as of September 30, 2002, U.S.$5.5 million had been paid. During the third quarter of 2002, the Company was asked to contribute an additional U.S.$0.5 million, as part of its original commitment, payable in September 2002, but which Argo II’s general partner agreed to postpone to April 30, 2003. On May 2, 2003, Argo II’s general partner notified the Company that it intended to extinguish the Company’s interest in Argo II if the U.S.$0.5 million capital contribution was not received by May 13, 2003; the Company did not make its capital contribution by that date and Argo II’s general partner extinguished Microcell’s interest in the partnership as of May 14, 2003.

Competition

     PCS Business. Competition in the wireless communications industry is intense. Competition for subscribers among wireless providers is based principally upon effective branding and marketing, the services and features offered, the technical quality of the wireless system, customer service, system coverage, capacity, handset selection and functionality, and price. The wireless communications industry is experiencing significant technological change, as evidenced by the increasing pace of upgrades of existing wireless networks from analog to digital, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements, and changes in end-user requirements and preferences.

     Today, Microcell’s PCS voice and data services compete principally with the incumbent cellular operators, Rogers, Telus and the Bell Mobility Partners, which offer both cellular and PCS services.

     Microcell was one of four entities awarded PCS licenses by Industry Canada in 1995. In addition to Microcell, a second national license for 30 MHz of spectrum was awarded to Clearnet, another new PCS operator, and two national licenses for 10 MHz of spectrum each were awarded to Canada’s incumbent cellular operators, with one license awarded to Rogers, and the second to the former members of Mobility Canada, including Telus and the Bell Mobility Partners.

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     The competitive environment in Canada has changed since 1995. After the restructuring of Mobility Canada in the late 1990s, the members of Mobility Canada were allowed to compete in each others’ incumbent serving territories. Clearnet was acquired by Telus in 2000, and Telus later acquired control of QuébecTel Group Inc. in 2001. Also in 2001, Industry Canada conducted an auction of additional PCS spectrum. Each of Rogers, Telus and the Bell Mobility Partners purchased PCS spectrum in the auction. Following all these events, what has remained is a Canadian wireless industry structure (PCS and cellular) comprised effectively of four national players:

• Microcell, with its national PCS License;

• Rogers, with a national 25 MHz cellular license and national PCS licenses;

• The Bell Mobility Partners, with 25 MHz cellular licenses in their incumbent serving territories (essentially all of Canada, excluding British Columbia, Alberta and Eastern Québec) and PCS licenses nation-wide; and

• Telus, with nation-wide PCS licenses and 25 MHz cellular licenses in its incumbent serving territories (essentially British Columbia, Alberta and Eastern Québec). Telus also currently operates an analog Specialized Mobile Radio (“SMR”) wireless communications network and an ESMR digital network at 800 MHz.

     In 1996, Rogers entered into a long-term strategic alliance with AT&T Corporation and its then affiliated companies, including AT&T Wireless Services, Inc. The agreement includes the licensing of the AT&T brand for use in connection with the marketing of Rogers’ wireless services. Rogers first launched its digital services using Time Division Multiple Access (“TDMA”) technology. It has since completed an overlay of the TDMA network with GSM technology. Rogers continues to operate an analog cellular network across Canada.

     The Bell Mobility Partners and Telus are using Code Division Multiple Access (the “CDMA”) technologies for their digital cellular and PCS networks. Telus and the Bell Mobility Partners both also continue to operate analog cellular networks in their incumbent serving territories. On October 17, 2001, Telus, Bell Mobility and Aliant Telecom Wireless (a Bell Mobility partner in Atlantic Canada) concluded digital roaming arrangements for CDMA technologies in their respective licensed service areas.

     Microcell believes that its 30 MHz allotment of contiguous PCS spectrum enables it to provide customers with bandwidth-intensive applications, including high-speed data transmission services. Microcell believes that its PCS handsets are competitively priced as compared to digital and dual-mode handsets of comparable size, weight and features. In order to compete effectively with its competitors who subsidize the sale of their analog cellular and digital handsets, Microcell subsidizes the sale of its PCS handsets.

     Additional Competition. New spectrum may be licensed, and new technologies may be developed, which could provide additional competition to the Company. For example, mobile satellite systems, with transmissions from mobile units to satellites, could augment or replace transmissions to land-based stations. Even though such systems are designed primarily to serve remote areas, a mobile satellite system could possibly augment or replace communications within segments of land-based wireless systems.

     In addition, PCS is increasingly seen as competing with local wireline telephone services for voice and data traffic. Wireline substitution, whereby PCS customers use wireless for their principal or only telephony needs, is becoming increasingly common.

     Wireless Internet Business. The ILECs through DSL technology and licensed cable operators are currently the dominant players in the provision of broadband access to the Internet in Canada.

Research & Development

     As a condition of its PCS License, Solutions is to invest at least 2% of adjusted gross revenues derived from its 2 GHz PCS operations, on PCS-related research and development averaged over the five years of the current PCS License term, which runs until 2006.

Regulation

     Radiocommunication Act. The use of radio spectrum for Microcell’s PCS and Inukshuk’s MCS network operations is subject to regulation and licensing by Industry Canada pursuant to the Radiocommunication Act and the ownership and operation of cellular, PCS, MCS and other radiocommunication systems in Canada are subject to ongoing oversight of Industry Canada.

     The Radiocommunication Act provides Industry Canada with wide discretion to issue radio licenses for the operations of radio apparatus and spectrum licenses for the use of radio spectrum within a defined geographic area, establish technical standards in relation to radio equipment and plan the allocation and use of radio spectrum taking into account the orderly development and efficient operation of radiocommunications in Canada and the orderly establishment and modification of radio stations. Industry Canada also

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has the discretion to amend the terms and conditions of licenses to ensure the orderly development and efficient operation of radiocommunications in Canada.

     Radio and spectrum licenses are issued for a term and may be renewed at Industry Canada’s discretion. They may be suspended or revoked for cause, on notice and after giving the license holder a reasonable opportunity to make representations, where the Minister is satisfied the holder has contravened the Act, the regulations or the terms or conditions of its licenses. Revocation is rare and licenses are usually renewed upon expiration. Despite this, there can be no assurance that the PCS License and the MCS Licenses will be renewed upon their expiry.

     Industry Canada has traditionally assigned portions of the radio spectrum on a first-come, first-served basis. However, in instances where the expressed demand for a given allocation of spectrum exceeded the amount available, a comparative selection process was introduced to identify which of the various proposed systems would be authorized, based on relative merit.

     In February 1996, Industry Canada announced the results of a licensing review process. A more streamlined version of the selection process was retained for certain spectrum allocations. At the same time, Industry Canada announced an alternative auction process, to be used in certain instances.

     As part of the PCS licensing policy established by the Minister in 1995, a spectrum aggregation limit, or “spectrum cap” was put in place, restricting to 40 MHz the amount of mobile spectrum any one licensee and its affiliates could hold in a specific geographic area. In 1999, the mobile spectrum cap was raised to 55 MHz and modified in 2003 to allow ESMR spectrum to count for no more than 10 MHz under the spectrum cap.

     PCS License Conditions and Fees. On April 15, 1996, Solutions was informed of the conditions attached to its PCS License, which had an initial term of five years. On March 29, 2001, Industry Canada renewed the PCS License for a second five-year term, commencing on April 1, 2001. The conditions attached to the renewed term of the PCS License remained unchanged from those of the initial term. However, Industry Canada also indicated as part of the PCS License renewal its intention to initiate a review of the cellular and PCS license terms, fees and conditions (see further below). Industry Canada has the power to make amendments to the existing terms and conditions of license and fee structure.

     The existing PCS License conditions require Solutions to:

(1)	substantially meet the deployment plan contained in its initial license application and offer a reasonable level of service in all regions of Canada;
(2)	substantially honor the research and 2% of adjusted gross revenue from its PCS activities on PCS-related research and development, as defined by Revenue Canada, averaged over the course of the PCS License term (“adjusted gross revenue” is defined as total service revenues less inter-carrier payments, bad debts, third party commissions, and provincial and federal taxes collected);
(3)	substantially honour all other commitments made in its detailed application;
(4)	comply with the Canadian Ownership and Control Provisions and notify the Minister of any change that would materially affect its ownership or control in fact, such notice to be given in advance for transactions known to the Company;
(5)	submit annual reports indicating, among other things, continued compliance with the PCS License conditions;
(6)	from the inception of service, provide for and maintain lawful interception capabilities as authorized by law, unless forborne from so doing;
(7)	comply with the transition policy and relocation procedure for the relocation of incumbent microwave stations;
(8)	offer PCS resale throughout its service area to PCS licensees on a non-discriminatory basis;
(9)	comply with the provisions set out in the Interim Sharing Agreement between Industry Canada and the Federal Communications Commission of the United States concerning the use of the 2 GHz frequency range; and
(10)	obtain site specific authority prior to installing or operating any 2 GHz PCS base station.

     Solutions paid annual license fees for the PCS License of approximately $23 million in 2002. Annual PCS license fees are $900/MHz per base station for wide area systems and $9/MHz per base station for limited area systems. The dollar amount of Solutions’ annual license fees will therefore increase proportionately to the rate at which Solutions adds cell-sites to its PCS network.

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     On December 21, 2001, Industry Canada launched a public consultation process to review the cellular and PCS licenses conditions, terms and fees, with the release of Canada Gazette Notice DGRB-004-02, “Consultation on a New Fee and Licensing Regime for Cellular and Incumbent Personal Communications Services (PCS) Licensees”. Issues raised for consultation included the following:

• To extend the cellular and PCS licenses to ten-year terms from the current five, meaning the PCS License term would be extended to 2011 from the current 2006 expiry date;

• To allow the cellular and PCS licensees to benefit from more liberal spectrum disposition rights, including the ability to transfer in whole or in part the assigned spectrum in both the geographic and spectral (bandwidth) domains, subject to, however, any applicable spectrum caps;

• To modify the current cellular and PCS license fee regime from one requiring payment on a site by site basis to a “spectrum license”, whereby a licensee pays for total spectrum assigned;

• That there be no fee distinction between PCS and cellular spectrum; that is, for each assigned MHz, cellular and PCS licensees will be charged the same fee. Based on the transitional figures proposed in the Licensing Review document, 30 MHz of national PCS spectrum, such as Solutions holds today, would attract annual “spectrum license” fees of $45 million in 2011; and

• To maintain the obligation that analog roaming and resale be offered by cellular licensees to PCS licensees.

     While the changes to the cellular and PCS license conditions and fees proposed in the consultation process have not been adopted, Industry Canada has stated its intention for any revisions eventually adopted following the consultation to be in effect by April of 2004. There can be no assurance, if there are any changes to the PCS License terms, conditions or fee structure eventually introduced, that these will not materially impact Microcell.

     Although revocation is rare and licenses are usually renewed upon their expiration, there can be no assurance that the PCS License will be renewed upon its expiry, nor can there be any assurance that the PCS License term, conditions or fees, following the consultation mentioned above, or established at the end of the PCS License term, will not differ in a way that affects the operations or costs of Solutions in a material way.

     MCS Licenses Conditions and Fees. In March of 2000, following a comparative selection process, Inukshuk was selected by the Minister to be licensed for MCS in twelve license service areas across Canada.

     On December 21, 2001, Inukshuk was issued ten-year MCS Licenses running to March 31, 2011, for the twelve license service areas. The MCS Licenses cover territory that encompasses the provinces of Alberta, British Columbia, Ontario, Québec, Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick and the Nunavut, Yukon and Northwest Territories. The MCS Licenses conditions require Inukshuk, from the date of licensing, to:

(1)	adhere to the rollout plans made in its initial detailed license application, as amended by Inukshuk’s letter to Industry Canada dated December 5, 2001;
(2)	adhere to the learning plan as contained in its detailed application, or as agreed to in writing by the committees made up of representatives of the learning community and Inukshuk;
(3)	comply on an ongoing basis with applicable Canadian ownership and control eligibility criteria (currently as prescribed in the Radiocommunication Act), and provide notice to the Minister in advance, if possible, of any change that would materially affect its ownership or control in fact;
(4)	use the assigned spectrum in accordance with the Canadian Table of Frequency Allocations and Industry Canada’s spectrum policy for MCS;
(5)	ensure that radio apparatus are installed and operated in compliance with Health Canada’s limits of exposure to radio fields;
(6)	mark antenna structures, where applicable, in accordance with recommendations of Transport Canada;
(7)	consult with appropriate land use authorities prior to installation of significant antenna structures, and delaying any installation pending an Industry Canada review to consider whether negotiations are at an impasse;
(8)	comply with the terms and conditions of any approval given by Industry Canada in respect of sites for radio apparatus;

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(9)	ensure that radio apparatus are installed and operated in accordance with technical standards specified by Industry Canada;
(10)	comply with existing and future international coordination or notification regulations and procedures;
(11)	comply with the transition policy and relocation procedure for the relocation of incumbent stations;
(12)	comply with requests from Industry Canada for technical details of hub stations;
(13)	obtain Ministerial approval, following full review by Industry Canada, for any application to transfer or assign the licenses, including any disposition of the rights and obligations of the licenses and any change which would have a material effect on the ownership or control in fact of the licensee;
(14)	pay the annual MCS License fees before March 31 for the subsequent year;
(15)	submit annual reports for the first five years following issuance of the licenses indicating, among other things, continued compliance with the license conditions; and
(16)	submit semi-annual interim reports indicating system implementation and learning plan progress for the first two years of the license terms.

     Annual MCS License fees are $1.30/MHz per 1,000 households for each licensed service area. For all twelve MCS Licenses, Inukshuk paid annual license fees of $1,267,734 in 2002.

     In November 2001, Industry Canada announced, consistent with an earlier determination by the Federal Communications Commission of the United States, that Canada would allow both fixed and mobile applications in the MCS spectrum band. Industry Canada plans to initiate a public consultation in the future on licensing considerations arising from this change. There can be no assurance that conditions of the MCS Licenses, including the license fee structure following any follow-up consultation, will not change materially, which could affect Inukshuk’s operations or costs. On April 2, 2003, recognizing extenuating circumstances surrounding the telecommunications environment, Industry Canada extended timelines for Inukshuk’s MCS system development and learning plan to March 31, 2004.

     Telecommunications Act. As a telecommunications common carrier (i.e., a facilities-based telecommunications company) operating in Canada, Solutions is a “Canadian carrier” as defined by the Telecommunication Act and is therefore subject to regulation by the CRTC. Inukshuk is also expected to be a Canadian carrier. The CRTC’s jurisdiction extends to the regulation of rates and the terms and conditions pursuant to which telecommunications services are provided by Canadian carriers, the exchange of telecommunications traffic between carriers, inter-carrier arrangements and ownership of Canadian carriers. The CRTC is also mandated to establish the appropriate rules for entry into new markets and the regulation of competitive telecommunications markets. Powers conferred to the CRTC include the ability to exempt classes of Canadian carriers from the application of the Telecommunications Act and to forbear from exercising certain regulatory powers with respect to certain classes of services if the CRTC is satisfied that exemption or forbearance is consistent with Canadian telecommunications policy objectives, and if the service or class of service is or will be subject to competition sufficient to protect the interest of users. Exemption or forbearance may be subject to conditions. For example, in most of its forbearance decisions, the CRTC has eliminated the request for carriers to file tariffs and inter-carrier agreements for approval but has retained its powers to rule on complaints of undue preference or anti-competitive behavior.

     Under the current rules established by the CRTC, a wireless carrier may carry on business as a Wireless Service Provider, including both facilities-based service providers and resellers (“WSP”) under the regulatory regime established for wireless services, or it may take advantage of the regulatory framework for the local services generally by electing to become a competitive local exchange carrier, being a facilities-based new entrant in the local exchange market (“CLEC”), on an area-by-area basis. Certain obligations and benefits are brought about by becoming a CLEC including “co-carrier” status with the ILECs. It is also possible for a wireless carrier to operate as a WSP in some areas and as a CLEC in others, as Solutions is currently doing.

     Regulatory Framework for Wireless Services. On December 23, 1996, the CRTC issued Decision 96-14 regarding the regulation of WSPs. The CRTC decided, subject to certain conditions, to refrain or forbear from exercising many of its regulatory powers, including its rate-setting powers, with respect to mobile wireless voice services interconnected with other public networks provided and offered by Canadian carriers other than the ILECs. The CRTC considered it necessary to retain the power to impose certain conditions such as confidentiality of customer information and to ensure that providers of such services, including cellular, PCS and ESMR, do not unjustly discriminate against other service providers or subscribers, or confer any undue or unreasonable preference with respect to access to their networks or generally with respect to the provision of the services.

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     Regulatory Framework for Local Services. In May 1997, the CRTC issued Telecom Decision 97-8, “Local Competition” (“Decision 97-8”) which set out the initial terms and conditions for competition in the local telecommunication services market. Many of the implementation issues associated with the introduction of local services competition were referred to the CRTC Interconnection Steering Committee (“CISC”), an industry organization formed to assist in developing information, procedures and guidelines as may be required in implementing local competition. The Company participates actively in the CISC. Decision 97-8 establishes a technology neutral comprehensive regulatory framework that addresses key issues necessary to permit competition in the local services market. Decision 97-8 has been modified from time to time by subsequent CRTC decisions and orders. Following is a summary of the major features of Decision 97-8 as it is expected to impact on Microcell’s business.

     In the local services market, the CRTC considers CLECs to be carriers of equal stature with, and not merely customers of, the ILECs. Accordingly, the CRTC mandated that ILECs and CLECs terminate each others’ traffic originating within the same ILEC exchange based on mutual compensation “bill and keep” arrangements. These arrangements do not require the Local Exchange Carrier (“LEC”) originating traffic to compensate another LEC for terminating its local traffic unless there is a substantial traffic imbalance for a significant period of time. In areas in which terminating traffic is at a substantial imbalance, LECs charge each other for the imbalance in traffic termination at cost-justified rate levels approved by the CRTC.

     The CRTC determined that ILECs and CLECs must provide at least one suitably equipped point of interconnection with other telecommunications providers within each ILEC local exchange in which the LEC provides service (certain elements of this determination are currently under review by the CRTC). The point of interconnection is the location where LECs’ respective networks interconnect for the exchange of traffic. The CRTC also directed that LECs should share the cost of this interconnection equally. This is accomplished through the terms of interconnection agreements between CLECs and ILECs or other CLECs. In order to provide service, CLECs require access to or the use of certain discrete and essential elements of the ILECs’ local exchange network, referred to as “unbundled facilities”. The CRTC determined that other facilities of the ILECs’ networks, though not essential, were nevertheless necessary during the early years of competition, and directed the ILECs to make them available to CLECs at cost-based rates as if they were essential.

     The CRTC considers CLECs to be “non-dominant carriers”. As such, they are not subject to the same degree of regulation as ILECs and are not required to file tariffs for their rates for end-customer services. However, the CRTC requires CLECs to assume certain regulatory obligations, including obtaining CRTC approval of interconnection agreements and tariffs for services provided to other carriers (as opposed to end-customers). In addition, CLECs must provide equal access for their end-customers to long distance providers that offer services in the same territory served by the CLEC, and interconnection to all carriers, including long distance carriers, WSPs and other LECs operating in the same territory. This access must be available at terms, conditions, rates and charges no less favorable than those offered by the local ILECs. These requirements, as they apply to wireless CLECs, including Solutions, are currently being reviewed by the CRTC. CLECs are also required to: implement local number portability, which permits an end-customer to move from one LEC to another without changing telephone numbers; provide emergency (9-1-1) service; provide message relay service for the hearing impaired; and satisfy various other regulatory requirements designed to protect customers’ privacy and ensure that customers receive adequate service information.

     Solutions received interim CRTC approval of its CLEC tariffs on September 8, 2000, a condition precedent necessary to achieving CLEC status. Since September of 2001, Solutions has been converting to CLEC status from WSP status across the country, and is now operating as a CRTC-approved CLEC in all of the Company’s principal operating exchanges. On March 7, 2003, the CRTC granted final approval to the terms and conditions of Microcell’s tariffs, and interim approval of the rates therein.

     Contribution Obligations. In November 2000, with Telecom Decision 2000-745, the CRTC announced a reform of the contribution collection mechanism, whereby telecommunications service providers subsidize the cost of local telecommunications service in certain high-cost regions. Previously, contribution was paid on a per long distance minute basis or comparable per interconnection trunk basis. Since January 1, 2001, telecommunications service providers, including WSPs and CLECs, have been required to pay a percentage of their Canadian Telecommunications Service Revenues (“CTSR”), less certain deductions, such as inter-carrier payments, as contribution. In its November 22, 2002, Telecom Decision 2001-71, the CRTC approved on a final basis the 2002 CTSR rate at 1.34%, and also set the interim CTSR rate for 2003 at 1.3%.

     Foreign Ownership Restrictions. Solutions and Inukshuk are required, as radiocommunication carriers and by the conditions of their respective licenses, to comply with the Canadian Ownership and Control Provisions. The Canadian Ownership and Control Provisions must also be respected by Solutions and Inukshuk to maintain their eligibility to operate as Canadian carriers under the Telecommunications Act and to hold and have renewed the PCS License and MCS Licenses.

     The Canadian Ownership and Control Provisions require Solutions and Inukshuk to be “Canadian-owned and controlled” corporations incorporated or continued under the laws of Canada or a province of Canada. Solutions and Inukshuk are deemed to be “Canadian-owned and controlled” as long as: (1) not less than 80% of the members of their respective boards of directors are individual Canadians; (2) Canadians beneficially own not less than 80% of their respective issued and outstanding voting shares; and (3) they are not otherwise controlled in fact by non-Canadians.

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     A “Canadian” is defined to include a Canadian citizen who is ordinarily resident in Canada, a permanent resident of Canada, various Canadian government agencies, various qualified trusts, mutual insurance companies, and corporations in which Canadians beneficially own and control in the aggregate not less than 66 2/3% of the issued and outstanding voting shares and which are not otherwise controlled in fact by non-Canadians.

     In the case of Microcell, as the ultimate parent corporation of both Solutions and Inukshuk, the Canadian Ownership and Control Provisions require, for Solutions and Inukshuk to be considered eligible thereunder, that not less than 66 2/3% of the issued and outstanding voting shares of Microcell be owned by Canadians, and that Microcell not otherwise be controlled in fact by non-Canadians. A “voting share” for purposes of the Canadian Ownership and Control Provisions means a share or class of shares of a corporation carrying voting rights under all circumstances or by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled and includes a security that is convertible into such a share at the time that a calculation referred to in that clause is made.

     Microcell may restrict the issue, transfer and ownership of shares, if necessary, to ensure that Microcell remains in conformity with the Canadian Ownership and Control Provisions. For such purposes, in particular but without limitation, Microcell may, in accordance with the provisions of the Canadian Ownership and Control Provisions, to the extent applicable: (1) refuse to accept any subscription for any voting shares; (2) refuse to allow any transfer of voting shares to be recorded in Microcell’s share register; (3) suspend the rights of a holder of voting shares to vote at a meeting of the shareholders of Microcell; and (4) sell, repurchase or redeem any voting shares.

     Microcell’s Articles of Incorporation provide that Microcell may, in connection with the issue, or transfer of ownership, of voting shares in its capital, take any action, or refuse to take any action, as the case may be, to the extent necessary to ensure that any subsidiary of Microcell is and continues to be eligible to operate as a Canadian carrier under the Telecommunications Act or to be issued, to hold and to renew radio authorizations or radio licenses under the Radiocommunication Act, if and only to the extent that the business activities of such subsidiary require such eligibility.

     Microcell, Solutions and Inukshuk may not otherwise be controlled by non-Canadians. In other words, non-Canadians cannot exercise control in fact over these companies. The test for determining control has been applied in a negative fashion; that is, reviews have focused on whether non-Canadians have control, not whether Canadians control, the carrier in question. Any one determinant may not necessarily amount to control, but the cumulative effect of several determinants may influence whether de facto control is being exercised by non-Canadians.

     Failure by Microcell to comply with the requirements relating to the Canadian Ownership and Control Provisions may affect the ability of Solutions and Inukshuk to operate as Canadian carriers and to hold and have renewed the PCS License and the MCS Licenses. Microcell believes that it and its subsidiaries currently comply with the Canadian Ownership and Control Provisions.

     In November of 2002, the Minister initiated a review of the Canadian Ownership and Control Provisions. The review, to be conducted by the House of Commons Standing Committee on Industry, Science and Technology (the “Industry Committee”), is meant to determine whether the restrictions on foreign participation in the telecommunications sector set out in the Canadian Ownership and Control Provisions are still appropriate today, or whether changes to those rules, including their possible removal, are needed. The Industry Committee is expected to report back to the Minister by mid-2003, but there is no assurance whether changes will be recommended, or if changes are recommended, that those recommendations will lead to modifications to the Canadian Ownership and Control Provisions.

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ORGANIZATIONAL STRUCTURE

     The following chart illustrates, as of May 31, 2003 the intercorporate relationship among the Company and its subsidiaries, and the percentage of voting rights held or controlled by the Company. All these companies were incorporated under the CBCA, except for Telcom Investments Inc., which was incorporated under the laws of the State of Delaware.

PROPERTIES AND EQUIPMENT

     Microcell leases approximately 520,000 square feet of office space in Montreal, which houses staff of Microcell’s principal office, switching office and national network operations center. Microcell also leases 55,100 square feet of space in Toronto, 19,000 square feet of space in Vancouver, 18,300 square feet in Calgary, 4,200 square feet in Québec City, 3,300 square feet of space in Ottawa, 1,200 square feet of space in St. Catharines-Niagara, 1,000 square feet in Kitchener, 700 square feet of space in Edmonton, 800 square feet of space in Victoria, 2,300 square feet of space in Windsor, 4,400 square feet of space in Winnipeg, 6,000 square feet of space in Halifax, 10,600 square feet of space in Mississauga, 2,300 square feet of space in Regina, 10,600 square feet in New Westminster and 200 square feet of space in St. John’s, Newfoundland for business offices and switching offices. In addition, the Company leases approximately 1,850 antenna sites and owns six antenna sites.

     In most instances, the Company owns the assets essential to its operations, including transmitters, microwave systems, antennae, electronic transmission receiving and processing accessories and other network equipment (including switches, radio channels, base station equipment, microwave facilities and PCS equipment). The Company generally leases land and space on buildings for the placement of antenna towers and also leases the premises on which its switches are located, principally under long

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term leases. The operating systems and software related to these assets are either owned by the Company or are used under license. Substantially all of the Company’s assets are subject to various security interests in favour of its lenders.

     Environmental protection requirements applicable to the Company’s operations are not expected to have a significant effect on its capital expenditures, earnings or its competitive position in the current or future fiscal years.

ITEM 5 — OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OPERATING RESULTS

Forward-looking statements

     This management’s discussion and analysis contains “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995, that are based on expectations and estimates. Forward-looking statements may be identified by the use of forward-looking terminology such as “believe”, “intend”, “may”, “will”, “expect”, “estimate”, “anticipate”, “continue”, “consider”, or similar terms, variations of those terms or the negative of those terms. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. These statements contain potential risks and uncertainties, and actual results may therefore differ materially. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

     Important factors that may affect these expectations include, but are not limited to: changes in the Canadian economy and in Canadian and U.S. capital markets; changes in competition in the Company’s market; advances in telecommunications technology; changes in the telecommunications regulatory environment; future litigation; availability of future financing; unanticipated changes in expected growth of the number of subscribers; radio frequency emission concerns; and exchange rate fluctuations. Readers should evaluate any statements in light of these important factors.

Basis of presentation

     The following is a discussion of the consolidated financial condition of Microcell and its subsidiaries as of December 31, 2002 and results of operations for the twelve-month period ended December 31, 2002. It should be read in conjunction with the consolidated financial statements of Microcell as of and for the twelve-month period ended December 31, 2002. Such consolidated financial statements, and the notes thereto, have been prepared in accordance with Canadian GAAP, which differ in certain material respects from U.S. GAAP and have been reconciled with U.S. GAAP in note 20 to the consolidated financial statements as of December 31, 2002.

     As of December 31, 2002, Microcell conducted its wireless communications business through five wholly owned subsidiaries which were: Microcell Capital, Connexions, Microcell Labs, Solutions, and Inukshuk.

     As of December 31, 2002, the Company carried out its operations through three strategic business segments: PCS, Wireless Internet and Investments. Under its PCS business segment, the Company is a provider of PCS in Canada under one of the PCS License awarded in Canada in 1995 and renewed for five years in March 2001. The terms and conditions for the renewal of the PCS License are identical to those established for the first term of the PCS License in April 1996.

     Through its Wireless Internet business segment, the Company provides mobile Internet services to its PCS subscribers and had planned to build a high-speed Internet Protocol-based data network using MCS technology in the 2500 MHz range. The Company had planned to build the MCS network through Inukshuk. However, the current challenging capital market conditions, which have made raising financing difficult, Inukshuk has suspended building the MCS network on its own for the time being. Inukshuk is, however, continuing to seek out arrangements with third parties to advance the MCS project and deployment, but there can be no certainty any such arrangements will be successfully concluded.

     Finally, under its Investments business segment, the Company invests in various wireless or high technology companies and, as a result, is exposed to normal market risk fluctuation, which may be significant.

     As the Wireless Internet and Investments operations were not significant starting 2003, the Company has determined that it operates in one segment since January 1, 2003.

     Throughout the following discussion and analysis, the Company uses the term “EBITDA” and “EBITDA margin”. EBITDA is defined as operating income (loss), excluding restructuring charges, impairment of intangible assets, depreciation and amortization. EBITDA margin is defined as EBITDA divided by the total revenues of the Company. The Company also uses the terms ARPU, COA, “net retail subscriber additions”, “churn rate” and “cumulative CAPEX per population covered”. All of these aforementioned

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terms may not be identical to similarly titled measures reported by other companies. Furthermore, they should not be considered in isolation or as alternative measurements of operating performance or liquidity to net loss, operating loss, cash flows from operating activities or any other measures of performance under Canadian and U.S. GAAP. The Company believes that EBITDA, EBITDA margin, ARPU, COA, “net retail subscriber additions”, “churn rate” and “cumulative CAPEX per population covered” are viewed as relevant supplemental measures of performance in the wireless telecommunications industry.

Critical accounting policies and estimates

     The preparation of the Company’s consolidated 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 during the reporting period. Actual results could differ from those estimates. The critical accounting policies and estimates used in the preparation of the Company’s financial statements include the following:

Revenue Recognition

     Monthly access charges are billed in advance and recognized when the services are provided and collection is reasonably assured. Airtime charges are recognized as revenue when provided. Sales of handsets and related equipment are recognized when goods and services are delivered and collection is reasonably assured. Prepaid service revenues are deferred and recognized when services are provided. When prepaid airtime vouchers are sold to dealers, the revenue for the airtime is measured at the face value of the time sold, when services are provided. Commissions to dealers are classified within cost of products and services.

Allowance for Doubtful Accounts

     The Company maintains allowances for doubtful accounts for estimated losses resulting from its inability to collect balances due from its customers. The Company bases its estimates on the aging of its accounts receivable balances and historical write-off experience, net of recoveries. If collections are lower or more customers elect to terminate their service than expected, actual write-offs may be different than expected.

Capitalization of costs

     The Company is engaged in the activity of building and deploying network assets and incurs internal costs related to these activities. During construction or deployment of new assets, direct costs, plus a portion of applicable overhead costs, are capitalized.

Capital Assets

     Capital assets are recorded at cost. The PCS network includes direct costs such as equipment, material, labor, engineering, site development, interest incurred during the network build out, depreciation of capital assets used in connection with the construction of the network, and overhead costs. The costs of PCS network construction in progress are transferred to the PCS network in service as construction projects are completed and put into commercial service. The Company reviews the recoverability of capital assets for impairment whenever events or changes in circumstances occur, or at least annually. Recoverability is measured by a comparison of the carrying amount of a group of assets to future undiscounted net cash flows expected to be generated by that group of assets.

Intangible Assets

     The Company has determined that its PCS License and MCS Licenses are intangible assets having indefinite lives under the recent accounting standard “Goodwill and Other Intangible Assets”. The intangible assets are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. When the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.

Change in Canadian accounting policies

     Effective January 1, 2002, the Company adopted, for both Canadian and U.S. GAAP, on a retroactive basis, the provisions set forth in the Financial Accounting Standards Board’s Emerging Issues Task Force (the “Task Force”) issue 01-9 Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products (“EITF 01-9”). The consensus reached by the Task Force indicates that a cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor’s products or services and, therefore, should be accounted for as a reduction of revenues. Previously, these considerations were presented as marketing expenses with the corresponding amount as revenues. For the years ended December 31, 2002, 2001 and 2000, the impact of the change was to reduce operating revenues and selling and marketing expenses for the PCS operating segment by $20,941,000, $19,347,000 and $22,827,000 respectively. The adoption of EITF 01-9 did not have an effect on the Company’s net loss, operating measures or cash flows.

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     Effective January 1, 2002, the Company adopted the standard set forth in Section 3870 of the CICA Handbook entitled Stock-based Compensation and Other Stock-based Payments. As permitted by Section 3870, the Company has applied this change prospectively for new stock options granted on or after January 1, 2002. The Company has chosen to recognize no compensation when stock options are granted to employees and directors under stock option plans with no cash settlement features. Direct awards of stock to employees and stock and stock option awards granted to non-employees are accounted for in accordance with the fair value method of accounting for stock-based compensation. No such awards were granted in 2002. The fair value of direct awards of stock is determined by the quoted market price of the Company’s stock on the grant date, and the fair value of stock options is determined using the Black-Scholes option pricing model. In periods prior to January 1, 2002, the Company recognized no compensation when stock or stock options were issued. Pro forma information regarding net income is required and has been determined as if the Company had accounted for its employee stock options under the fair value method.

     Effective January 1, 2002, the Company adopted the new standard set forth in Section 3062 of the Canadian Institute of Chartered Accountants’ (“CICA”) Handbook entitled Goodwill and Other Intangible Assets, to be applied on or after January 1, 2002. Under the new standard, goodwill and other indefinite-life intangible assets are no longer amortized but tested for impairment on an annual basis. The excess of the carrying amount over the fair value is charged to earnings. The Company has determined that the PCS License it has been awarded has an indefinite useful life. Therefore, pursuant to Section 3062 of the CICA Handbook, the Company will not amortize this PCS license until it determines that the PCS License has a finite life. The impact on the consolidated financial statements has been a reduction of the annual amortization of the PCS License in the amount of $140,000. As disclosed in note 7, an impairment charge was recorded for the MCS Licenses in 2002. The annual licensing fees are charged to expense as incurred.

Reorganization

     At the time of the release of its second quarter 2002 results on August 9, 2002, the Company announced that there was significant uncertainty regarding its ability to continue as a going concern, such ability being dependent, among other factors, on the Company’s ability to reduce its financing costs and improve its liquidities and operating performance. The Company also announced on that date that it had retained the services of a financial advisor and formed a Special Committee composed of independent directors with a view of evaluating various strategic options in the circumstances. In light of the going concern uncertainty, the mandate of the Special Committee was to review and evaluate the alternatives of the Company with a view to reducing its financing costs and improving its liquidity. To that end, the Special Committee obtained the advice and recommendations of the financial advisor. The significant uncertainty resulted from the fact that the Company disclosed that it believed it would be in default of certain covenants in its long-term debt agreements within a twelve-month period, unless it could successfully renegotiate some of these covenants. With such default, the senior secured lenders could have chosen not to provide the Company with further access to funds under the senior secured revolving credit facility and could also accelerate debt repayment.

     On October 31, 2002, the Company entered into a forbearance and amending agreement with its secured bank lenders in which the lenders agreed to forbear until December 23, 2002, subject to certain conditions, the exercise of any rights with respect to certain possible defaults. The covenants to which the forbearance agreement applied related to the non-payment of interest on the 2006 Notes and the possibility of the non-payment to a vendor under a material contract. On December 2, 2002, the Company announced that it would not make its interest payment on its 2006 Notes due on that day. Before the end of the forbearance period, the Company reached an agreement with the vendor on the amount due and settled such amount.

     On December 23, 2002 the Company announced that its secured lenders, holding approximately 74% of the outstanding secured debt, have agreed on the terms of a recapitalization plan. In this regard, the Company’s secured lenders have agreed to forbear until January 6, 2003 the exercise of any rights with respect to a default resulting from the non-payment of interest on the 2006 Notes. In addition, both parties agreed to terminate the senior secured revolving credit facility. The Company was subsequently not in compliance with certain covenants under its long-term debt agreements and as such all the long-term debt is in default. Microcell also continued to have constructive discussions regarding the plan with an ad hoc committee of unsecured noteholders.

     On January 3, 2003, the Company announced that it had received signed commitments from certain of its secured lenders and noteholders, representing approximately 75% and 55% respectively of the estimated aggregate voting claims that may be represented at the secured creditors’ meeting and the affected unsecured creditors’ meeting. In view of its then current and anticipated financial position, the status of its discussions with financial and strategic investors, the non-payment of U.S.$29.3 million of interest due on the 2006 Notes in December 2002 and the options available to the Company under the circumstances, the Company elected to restructure its operations under the CCAA protection and filed for and received protection under the CCAA on January 3, 2003 in the form of an Initial Order. Until the Plan became effective on May 1, 2003, the Company did not make any further payments of principal or interest on its secured debt or unsecured notes, including the interest payment on its 2006 Notes, which was due December 1, 2002, and quarterly principal repayments on its secured term loans due December 31, 2002 and March 31, 2003.

     On February 19, 2003, the Company filed its Circular, which included a Plan, setting out the terms of the Company’s proposed plan. Subsequently, on March 17, 2003 the Plan was voted upon and approved by 98% of the secured creditors and 100% of the affected unsecured creditors, representing 93% and 100%, respectively, of the total value of the secured claims and affected

32

unsecured claims that were voted. On March 18, 2003, the Superior Court of the Province of Quebec issued a Sanction Order approving the Plan. On May 1, 2003, the Plan became effective. The Plan reduced the Company’s debt obligations by approximately $1.7 billion.

     The Company continues to experience growth-related capital requirements arising from the need to fund of network capacity improvements and ongoing maintenance and to fund the cost of acquiring new PCS customers. Microcell’s ability to generate positive net income and cash flow in the future is dependent upon various factors, including the level of market acceptance of its services, the degree of competition encountered by the Company, the cost of acquiring new customers, technology risks, general economic conditions and regulatory requirements.

     These accompanying consolidated financial statements do not reflect any adjustments arising from the Plan, except that the current portion of long-term debt is equivalent to the current portion of the new debt contracted on the implementation date of the Plan. The Company is conducting a revaluation of its assets and liabilities and will adjust their carrying values to reflect the value of the Company as an entity established by the capital reorganization. The revaluation adjustments are expected to be presented in the 2003 second quarter consolidated interim financial statements, the period encompassing the expected implementation date of the Plan, May 1, 2003. The Company’s balance sheet after the implementation date will be presented on a comprehensive revaluation basis after giving effect to both the financial reorganization and the revaluation adjustments.

Company Overview

     The Company began 2002 by successfully securing an additional $100 million in bank financing from a group of senior lenders, which effectively increased the total amount of senior secured facilities outstanding from $750 million to $800 million. In conjunction with this financing, the Company entered into an equipment supply agreement with an important vendor whereby Connexions agreed to purchase at least $150 million worth of network infrastructure hardware and software over the next three years. This agreement was subsequently amended in December 2002 to eliminate the purchase commitment as part of the Company’s recapitalization efforts described above.

     During the same time, the Company proceeded with the consolidation of its core PCS operations and further adapted its business priorities to increase its customer focus and to respond to competitive market conditions. Improving profitability was at the forefront of these efforts. To achieve this, the Company focused on implementing effective and prudent cost management initiatives and reduced its level of activity and project focusing on its core business. As a result, the workforce was reduced by approximately 350 employees. Furthermore, in-line with new business strategy, the Company reduced spending in its non-PCS business operations such as Inukshuk Internet Inc. and Argo II.

     The objective of the integration of the Company’s network operations, marketing, and customer service activities, accomplished through the above-mentioned PCS reorganization, was to allow the Company to sharply focus and galvanize its resources to better address the needs of Fido customers in terms of capacity, new services and data. A number of developments occurred in 2002 that reflected the Company’s goal to enhance the PCS customer experience and to create a foundation for future growth and profitability.

     In order to maintain and improve its competitiveness, the Company continued to expand and enhance its product and service offering.

     In April 2002, the Company offered the first GPRS card for personal computers (PC) that allows Canadians to access wireless data services across North America.

     In August 2002, the Company introduced a new 15¢-per-minute airtime rate for Fido Prepaid Service. The new airtime vouchers are available in denominations of $15 (valid for 15 days) and $30 (valid for 30 days). The Company also continues to offer vouchers with a longer validity period in denominations of $10 (valid for 30 days) and $25 (valid for 60 days), with airtime being calculated at an effective per-minute rate of 30¢. The flexible nature of the new pricing should enable two main customer segments the Company is targeting for prepaid, the youth and the young adults segments, to better control monthly expenses and benefit from greater value.

     In October 2002, Fido introduced InstantRefill—a mobile wireless, interactive transactional platform for prepaid airtime replenishment. InstantRefill, a SMS text message-based payment service, is a secure and simple mobile commerce application that enables airtime refill from a handset with payment by credit card or pre-authorized bank account debit.

     During 2002, the Company also introduced several new devices, many which were exclusive to Fido. These included the Vtech A700, the Sony Ericsson T200, and the Sony Ericsson T68i. These handsets offer many of the features found only on high-end wireless handsets, such as a vibrating alert, calendar, alarm clock, calculator, scalable text and dynamic menu icons. Several of these handsets combine worldwide roaming capabilities with instant one-touch access to the Internet and personal picture messaging. In

33

particular, the Sony Ericsson T68i, which supports cable-free Bluetooth^TM connections between devices (thereby allowing users to talk without a wire connection), was also the first wireless handset in Canada with digital camera capability and picture messaging.

     Despite the Company’s efforts to tightly manage its costs, operating cash flow did not grow sufficiently to cover interest charges, debt capital repayment, and to fund on-going network enhancement and capacity improvement. In addition, the economic, capital market and industry-specific conditions that affected the telecommunications operators in Canada had serious repercussions on the Company’s operating results. With a highly leveraged financial position and no clear financing options available, the Company’s share price fell significantly. This resulted in the delisting of the Company’s Class B Non-Voting Shares from the Nasdaq National Market in July 2002. Given this context, during the second half of 2002 as discussed in the Reorganization section, the Company undertook a comprehensive evaluation of possible alternatives, with the assistance of a financial advisor, to reduce its financing costs and improve its liquidity. This process culminated with the Company’s reaching an agreement in principle with its secured lenders and unsecured noteholders subsequent to the end of the year. The proposed recapitalization Plan was approved almost unanimously by the Company’s creditors in the first quarter of 2003, significantly reducing the Company’s debt obligations by approximately $1.7 billion and its annual interest obligations by a range of $160 million to $200 million. On May 1, 2003, the Plan became effective.

Financial Highlights and Selected Statistics

			Years ended December 31
			2002			2001			2000
						$			$
						(Restated)			(Restated)
						(Unaudited)
CONSOLIDATED
(In thousands of Canadian dollars, except for per-share data)
	Revenues			591,062			541,490			405,986
	EBITDA			91,012			(9,803	)		(112,332	)
	Loss before income taxes			642,396			500,207			383,942
	Net loss			570,501			498,485			268,427
	Basic and diluted loss per share		$	2.37		$	4.56		$	2.79
	Capital expenditures			124,683			277,395			257,191
	Total employees, end of period (expressed as full-time equivalent)			2,026			2,377			2,603
PCS
	Revenues			591,056			542,510			407,700
	EBITDA			95,909			8,167			(105,735	)
	Capital expenditures			124,738			283,610			263,170
Other data:
	Monthly average retail revenue per user
	(ARPU)
		Postpaid	$	59.12		$	60.56		$	56.69
		Prepaid	$	18.64	(1)	$	20.99		$	27.14
		Blended	$	39.73	(1)	$	41.14		$	43.55
	Cost of acquisition of a retail subscriber		$	281		$	321		$	388
	Net retail subscriber additions
		Postpaid		(92,636	)		169,880			119,770
		Prepaid		137,947			116,803			218,270
	Total			45,311			286,683			338,040
	Churn rate			3.4	%(2)		2.6	%		2.2	%
	Total retail subscribers, end of period
		Postpaid		545,062			637,698			467,818
		Prepaid		619,459			571,512			454,709
	Total			1,164,521			1,209,210			922,527
	Total employees, end of period (expressed as full-time equivalent)			2,023			2,302			2,495

(1)	Calculation excludes 50,000 inactive prepaid service customers.
(2)	Calculation excludes 40,000 inactive prepaid service customers, who were deactivated during 2002, following the termination of a customer retention program.

34

CONSOLIDATED RESULTS

Year ended December 31, 2002, compared with the year ended December 31, 2001

     The Company’s financial results for the periods described herein are not necessarily indicative of its future operating results given the risks and uncertainties associated with the Company’s operations and the Canadian wireless industry in general.

     As of December 31, 2002, the Company offered PCS in twenty-one Census Metropolitan Areas (“CMAs”) in Canada. In addition, the Company has deployed its GSM network in smaller communities and along major highway corridors. The Company estimates that its PCS network reaches some 19 million people or 61% of the Canadian population. Beyond this network footprint, the Company provides analog cellular roaming capabilities on the networks of other carriers, which increases its service area to 94% of the total Canadian population.

Reported results (in millions of dollars, except for per-share data)

Years ended December 31,	2002			2001			Variance
	$			$			$
				(Restated)
Revenues		591.1			541.5			49.6
Costs and operating expenses (excluding restructuring charges, impairment of intangible assets and depreciation and amortization)		500.1			551.3			(51.2	)
Operating income (loss) before restructuring charges, impairment of intangible assets and depreciation and amortization		91.0			(9.8	)		(100.8	)
Impairment of intangible assets		223.4			—			223.4
Restructuring charges		7.5			5.2			2.3
Depreciation and amortization		242.4			178.0			64.4
Operating loss		382.3			193.0			189.3
Interest expense and other		221.4			217.7			3.7
Foreign exchange loss (gain)		(1.0	)		51.1			(52.1	)
Write-down of deferred financing costs and deferred gain and loss of financial instruments		17.0			—			17.0
Gain on financial instruments		(6.6	)		—			6.6
Loss in value of investments, marketable securities and other assets		16.1			33.1			(17.0	)
Share of net loss in investees		13.2			5.3			7.9
Income tax benefit		(71.9	)		(1.7	)		70.2
Net loss		570.5			498.5			72.0
Basic and diluted loss per share		2.37			4.56			(2.19	)

Quarterly data (in millions of dollars, except for per-share data)

Year ended December 31, 2002	Q1		Q2		Q3		Q4
(Unaudited)	$		$		$		$
Revenues		140.1		145.7		154.5		150.8
Net loss		95.3		199.2		152.3		123.7
Basic and diluted loss per share		0.40		0.82		0.64		0.51

Quarterly data (Restated) (in millions of dollars, except for per-share data)

Year ended December 31, 2001	Q1		Q2		Q3		Q4
(Unaudited)	$		$		$		$
Revenues		119.4		134.1		146.4		141.6
Net loss		172.0		75.2		142.9		108.4
Basic and diluted loss per share		1.67		0.72		1.37		0.88

     Consolidated revenues increased from $541.5 million to $591.1 million, representing a 9% growth over 2001 mainly due to a higher number of revenue-generating postpaid and prepaid subscribers in the active customer base in the PCS business (for more details, see the explanation provided in the Segmented Results section entitled PCS Segment).

35

     Costs and operating expenses, excluding impairment of intangible assets, restructuring charges, depreciation and amortization, decreased by 9% from $551.3 million in 2001 to $500.1 million in 2002, primarily as a result of lower expenses in the PCS business segment of $39.9 million (including the impact of a favorable clarification of provincial sales tax legislation related to handset subsidies, which resulted in the reversal of a $13.8 million cumulative provision previously accounted for), lower expenses in the Wireless Internet business segment of $9.4 million, and lower expenses in the Investments segment of $1.9 million (all after intersegment eliminations). Consequently, the Company posted an operating income before restructuring charges, impairment of intangible assets, depreciation and amortization of $91.0 million for the year ended December 31, 2002, compared with an operating loss before restructuring charges, depreciation and amortization of $9.8 million in 2001. This represents an improvement of $100.8 million year-over-year. For a detailed analysis, see the Segmented Results section.

     For a period of time during 2002, the Company had been pursuing negotiations with potential business partners to secure financing for its MCS project to be carried out by Inukshuk. During 2002, the likelihood of concluding such an agreement became uncertain. Given this fact, and considering the difficult financial market conditions that the telecommunications industry is facing, the Company wrote down the value of the MCS Licenses to nil. Accordingly, a non-cash expense affecting the Wireless Internet segment in the amount of $223.4 million was recorded in 2002. The cost of future income tax related to the MCS Licenses, resulting from the difference between the carrying value and the tax basis of the assets acquired, which was capitalized to the MCS Licenses, was reversed, resulting in an income tax benefit in the amount of $72.9 million.

     The restructuring charges of $7.5 million for 2002 compared with $5.2 million in 2001, related primarily to severance payments made to approximately 350 employees who were laid-off during 2002 compared with approximately 200 employees laid-off in 2001. These measures were taken in order to adjust the Company’s workforce to the requirements of its operating plan and were the result of increased productivity from the consolidation of certain administrative and operating support services, and the suspension of certain projects due to difficult financial market conditions.

     Depreciation and amortization increased by $64.4 million in 2002. This was mainly due to the write-down of certain of the Company’s capital assets to their net recoverable amounts and to the increase in capital assets as a result of network enhancement since December 2001. Accordingly, the depreciation and amortization for 2002 included write-downs of $31.4 million related to network and application software in the PCS segment and $5.9 million related to the portal in the Wireless Internet segment. As a result, the operating loss for 2002 increased by $189.3 million in 2002.

     The decrease in foreign exchange loss of $52.1 million in 2002 was mainly due to the improvement of the exchange rate of the Canadian dollar relative to the U.S. dollar, especially on the Company’s long-term U.S. dollar denominated debt.

     Given the recapitalization process in which the Company was engaged in 2002, it decided to terminate all its hedging agreements (see note 9 to the audited consolidated financial statements for the year ended December 31, 2002). These terminations, as well as the de-designation of the cross-currency swap on the principal balance of the 2009 Senior Discount Notes due 2009, created a net gain in the amount of $6.6 million for the whole year.

     The Company wrote down $18.9 million of deferred financing costs, $17.7 million of deferred loss on financial instruments and $19.6 million deferred gain on financial instruments for a net total of $17 million, all which related to the long-term debt in default.

     The decrease of $17.0 million in the loss in value of investments, marketable securities and other assets for 2002 was mainly due to a lower number of investments and marketable securities in the Company’s portfolio during 2002. The $7.9 million increase in the share of net loss in investees for the twelve-month period ended December 31, 2002 was the result of a general decline in market conditions for high-technology companies in 2002, which are the main component of GSM Capital’s portfolio.

     As a result, the Company posted consolidated net losses of $570.5 million for the year ended December 31, 2002 compared with $498.5 million for 2001. Basic and diluted losses per share decreased from $4.56 in 2001 to $2.37 in 2002. This was mainly due to the increase in the weighted-average number of shares following the December 2001 rights issue.

Year ended December 31, 2001, compared with the year ended December 31, 2000

     The Company’s financial and operating statistics for the year ended December 31, 2001, compared with the year ended December 31, 2000, reflect the increase in its activities in the CMAs covered as of December 31, 2000, the growth of wireless penetration in Canada, and the launch of commercial operations in four additional CMAs in 2001.

36

Reported results (in millions of dollars, except for per-share data)

Years ended December 31,	2001			2000			Variance
	$			$			$
	(Restated)			(Restated)
Revenues		541.5			406.0			135.5
Costs and operating expenses (excluding restructuring charges, impairment of intangible assets and depreciation and amortization)		551.3			518.3			33.0
Operating loss before restructuring charges, depreciation and amortization		(9.8	)		(112.3	)		(102.5	)
Restructuring charges		5.2			—			5.2
Depreciation and amortization		178.0			131.3			46.7
Operating loss		193.0			243.6			(50.6	)
Interest expense and other		217.7			173.9			43.8
Foreign exchange loss		51.1			24.6			26.5
Net gain on disposal of investments		—			(286.0	)		(286.0	)
Loss (gain) in value of investments, marketable securities and other assets		33.1			248.3			(215.2	)
Share of net loss (income) in investees		5.3			(20.6	)		(25.9	)
Income tax benefit		(1.7	)		(115.5	)		(113.8	)
Net loss		498.5			268.4			230.1
Basic and diluted loss per share		4.56			2.79			1.77

     Consolidated revenues increased from $406.0 million to $541.5 million, representing a 33% growth over 2000. PCS business accounted for all of this increase, due mainly to a 31% increase in the subscriber base. Costs and operating expenses, excluding restructuring charges, depreciation and amortization, increased by 6% from $518.3 million to $551.3 million as a result of higher expenses in the PCS business segment for $19.7 million, in the Wireless Internet business segment for $13.2 million, and in the Investments segment for $0.1 million (all after intersegment eliminations). As a result, the operating loss before restructuring charges, depreciation and amortization, on a year-over-year basis, decreased by $102.5 million or 91% to $9.8 million in 2001, compared with an operating loss before depreciation and amortization of $112.3 million in 2000. The operating loss, at $193.0 million in 2001, decreased by $50.6 million for the same reasons but it was partially offset by a higher depreciation expense of $46.7 million (due to the increase in capital assets as a result of network expansion since December 31, 2000) and restructuring charges of $5.2 million. The restructuring charges recorded in 2001 relate primarily to severance payments made to a number of employees laid off during the year in order to adjust the Company’s work force to the requirements of its 2002-2003 operating plan.

     The increase in interest expense and other was due to the draw-downs in 2001 on the Senior Secured Revolving Credit Loan and was consistent with the accretion of interest on the Senior Discount Notes due 2006, 2007 and 2009. In addition, lower cash and short-term investments on-hand during the first three quarters of 2001 compared with the same periods in 2000 contributed to a decrease in interest income in 2001. The increase in foreign exchange loss was due to the deterioration of the exchange rate of the Canadian dollar relative to the U.S. dollar.

     The decrease, in 2001, in net gain on disposal of investments is the result of a net gain of $286.0 million realized in 2000 due mainly to the Company’s sale of both its directly and indirectly held investments in Saraide Inc. to InfoSpace Inc. (“InfoSpace”). The loss in value of investments and marketable securities decreased by $215.8 million in 2001 compared with the previous year. This was due mainly to the lower level of InfoSpace shares held in 2001 following the sale of 961,894 shares in 2000 and 911,767 shares early in 2001, and to the fact that the major part of the decline in market conditions occurred in 2000. The share of net loss in investees, which amounted to $5.3 million in 2001 compared with a share of net income of $20.6 million in 2000 is due to the general decline in market conditions of high-technology companies.

     As a result, the Company posted a net loss and a net loss per share in 2001 of $498.5 million and $4.56 respectively, compared with $268.4 million and $2.79 in 2000.

Segmented Results

PCS Segment

Year ended December 31, 2002, compared with the year ended December 31, 2001

     PCS consists of wireless telecommunications services that use advanced and secure digital technology. The Company provides retail PCS in Canada to end-users and offers access to the Company’s PCS network to third-party telecommunications providers (on a wholesale basis). The Company also offers data services based on GPRS technology.

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PCS Selected financial information (In millions of dollars)

Years ended December 31,	2002		2001		Variance
	$		$		$
			(Restated)
Revenues		591.0		542.5		48.5
Costs and operating expenses (excluding restructuring charges, depreciation and amortization)		495.1		534.3		(39.2	)
PCS Segment operating income		95.9		8.2		87.7

     During 2002, the Company activated 548,079 new gross retail customers, down 11% from 612,883 in 2001. The decline in new gross retail customers was the result of a decrease in postpaid gross activations, particularly in the second half of 2002, reflecting continuing competitive market conditions within the Canadian wireless industry, as well as the Company’s prudent approach toward customer acquisition given its uncertain financial situation and recapitalization process. Accordingly, postpaid subscribers accounted for 45% of the total gross activations in 2002, compared with 51% in 2001.

     As of December 31, 2002, the Company provided wireless service to 1,164,521 retail PCS customers, 545,062 of which were on postpaid and 619,459 on prepaid. This figure included the adjustment described above. As a result of this adjustment, in addition to lower gross activations, higher churn, tighter credit policies, and competitive market conditions there was a 44,689 reduction in the Company’s retail customer base during 2002, compared with the addition of 286,683 new net retail customers in 2001. Excluding the second-quarter adjustment for inactive prepaid customers, the Company added 137,947 new net prepaid additions for full-year 2002, compared with 116,803 in the previous year. However, the Company’s postpaid subscriber base decreased by 92,636 in 2002, compared with an increase of 169,880 in 2001, due primarily to substantially higher involuntary churn to disconnect non-paying customers, increased migration of postpaid customers to prepaid service, a reduction in marketing-related promotions in light of the Company’s financial condition, and a pronounced emphasis on postpaid customer acquisition by the competition.

     In addition, as at December 31, 2002, Microcell provided PCS network access to 20,667 wholesale subscribers, compared with 20,631 at the end of 2001. This result is consistent with the Company’s strategy of discontinuing active solicitation of the wholesale business, while continuing to support its existing third-party service providers.

     The blended post-guarantee period monthly churn rate (number of deactivated users divided by the average number of active users during the period), increased to 3.4% for full-year 2002 from 2.6% in the previous year, and was the result of both higher postpaid churn and prepaid churn. Postpaid churn was 3.0% in 2002, compared with 2.0% in 2001, while prepaid churn increased to 3.8% from 3.2% for the same period. The year-over-year increases were due primarily to the negative publicity surrounding the Company and its financial condition, increasingly competitive handset offers, the effects of changes made to the Company’s prepaid pricing structure in August 2002 that shortened the validity period and increased the price per minute on certain airtime vouchers, thereby contributing to higher churn among occasional, security-type users as well as continuing high Company-initiated churn to disconnect non-paying customers. The Company generated significant involuntary customer churn due to certain marketing programs and policies implemented throughout 2001 and at the beginning of 2002 to increase postpaid customer acquisition. In particular, a special plan was devised to allow customers with a low credit rating to access a postpaid plan that included a variable-spending limit. Although this program was terminated during the third quarter of 2002, the churn rate was negatively impacted in the fourth quarter of 2002.

     Although, the Company’s PCS revenues, which consist primarily of subscriber service revenues generated from monthly billings for access fees, incremental airtime charges, prepaid time consumed or expired, roaming, fees for value-added services, and revenues from equipment sales, increased compared to the previous year.

PCS revenues (in millions of dollars)

Years ended December 31,	2002		2001		Variance
	$		$		$
			(Restated)
Services		566.6		509.0		57.6
Equipment sales		24.3		32.4		(8.1	)
Revenue – intersegment		0.1		1.1		(1.0	)
Revenues		591.0		542.5		48.5

     Service revenues grew by 11% to $566.6 million for the year ended December 31, 2002, from $509.0 million for the previous year. The increase reflects a higher average number of subscribers. This was partially offset by lower blended ARPU and softer wholesale revenues. Equipment sales were $24.3 million for full-year 2002, compared with $32.4 million one year earlier. The

38

decrease in equipment sales was due primarily to fewer gross activations, lower handset prices in the first three quarters of 2002 as a result of promotional offers on several new models, a greater volume of retention and satisfaction discounts, as well as to decreased accessory sales. Intersegment revenues represent services provided by the PCS segment to the other segments of the Company and are eliminated upon consolidation, along with the associated expenses.

     Retail-postpaid ARPU was $59.12 for 2002, compared with $60.56 for 2001. The decrease reflects a decline in airtime revenues. This decline resulted mainly from lower billable minutes due to greater in-bucket usage stemming from the high take-up of promotional plans that offered free bundled weeknight and weekend usage, from bundling value-added service options, such as voice mail and caller ID, in the basic monthly service packages, as well as from higher customer satisfaction and retention-related credits. Average monthly postpaid minutes of usage (“MOU”) for 2002 was higher at 361 minutes compared with 319 minutes in 2001 due primarily to greater off-peak usage arising from promotional plans that offered free weeknight and weekend airtime.

     The Company’s retail prepaid ARPU for 2002 decreased to $18.64 from $21.02 in 2001 mainly as a result of lower MOU. The reduction in prepaid MOU stemmed from the migration of high-usage prepaid customers to postpaid monthly plans. Average monthly prepaid MOU for 2002 was 57 minutes compared with 62 minutes for the previous year. On a blended basis, the Company’s combined postpaid and prepaid ARPU decreased to $39.73 in 2002 from $41.14 for 2001. Fido prepaid and postpaid customers sent approximately 42.4 million text messages in 2002 up 91% from 2001.

     The calculation of both prepaid and blended ARPU for 2002 includes an adjustment made during the second quarter of 2002 to remove 90,000 inactive prepaid customers from the Company’s retail customer base. The Company defines inactive prepaid service customers as those who have not made or received a call for a period of more than 30 days. Of these 90,000 inactive prepaid service customers, 40,000 customers were deactivated following the termination of a customer retention program. The 90,000 figure represents approximately the average monthly number of inactive accounts in the Company’s prepaid customer base in the twelve months preceding the second quarter of 2002. By excluding these inactive accounts from the reported customer base, the Company believes that it is providing a more accurate representation of the Company’s quarterly and year-to-date prepaid operating statistics for ARPU and average monthly usage. The Company intends to review this provision on a yearly basis or as required.

PCS costs and operating expenses (in millions of dollars)

Years ended December 31,	2002		2001		Variance
	$		$		$
			(Restated)
Cost of products and services		283.3		326.7		(43.4	)
Selling and marketing		104.8		114.2		(9.4	)
General and administrative		105.1		92.2		12.9
Operating expenses – intersegment		1.9		1.2		0.7
Costs and operating expenses (excluding restructuring charges, depreciation and amortization)		495.1		534.3		(39.2	)

     In keeping with its focus on cash preservation, the Company carefully managed its costs during 2002. PCS costs and operating expenses (excluding restructuring charges, depreciation and amortization) decreased by $39.2 million when compared to 2001. Expenses for 2002 included a clarification of a provincial sales tax legislation related to handset subsidies, which resulted in the reversal of a previously accounted for provision of $13.8 million. Normalized for this reduction in expenses, PCS costs and operating expenses for 2002 decreased $25.4 million. The cost of products and services for 2002, at $283.3 million, was composed of $102.1 million for cost of products and $181.2 million for cost of services, compared with cost of products of $143.0 million and cost of services of $183.7 million one year earlier.

     The $40.9 million, or 29%, improvement in cost of products for 2002, was composed of the aforementioned $13.8 million sales tax provision reversal; a reduced volume of handset sales and lower per-unit cost for handsets sold resulting in savings of $22.5 million; lower assembly, packaging and prepaid voucher production costs of $2.5 million; a lower cost of accessory sales of $1.1 million; and reduced shrinkage, obsolescence and devaluation of inventories of $1.0 million.

     Cost of services consists of site-related expenses, transmission costs, spectrum license fees, contribution revenue taxes, customer care costs, and other direct costs related to network operations. The $2.5 million year-over-year improvement in cost of services for 2002 resulted from a $14.1 million reduction in contribution charges paid to the CRTC. During the fourth quarter, the CRTC finalized the 2002 contribution rate at 1.3% of eligible revenues, retroactive to January 1, 2002, which compares favorably to the interim rate of 1.4% for 2002 and to the 2001 rate of 4.5%. This cost reduction was offset partially by a $3.5 million increase in customer care expenses, as well as by a $8.1 million increase in network operating costs that can be explained by the receipt of certain non-recurring credits for maintenance costs and license fees in 2001. Adjusted for these non-recurring credits, network operating costs for 2002 were flat, year-over-year.

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     Selling and marketing costs include compensation expenses and other distribution channel costs, as well as advertising expenses. In an effort to preserve cash as it continued pursuing its capital restructuring activities, the Company reduced the scale of its holiday marketing campaign and promotions during the fourth quarter of 2002. The Company believes this had a direct impact on its ability to remain competitive during the busiest acquisition period of the year for wireless operators. The improved cost performance also reflects lower salaries and benefits resulting from a reduced sales force, and reduced retail partner compensation attributable to lower overall sales and a higher proportion of prepaid gross activations. Consequently, selling and marketing expenses decreased by $9.4 million, year-over-year, in 2002, despite increased spending on retention initiatives associated with the Company’s customer life cycle program and higher retail partner compensation rates.

     The COA, which consists of handset subsidy and related selling and marketing expenses, improved 12% to $281 per gross addition for full-year 2002, compared with $321 per gross addition for the previous year, despite 11% fewer new gross customer activations. The year-over-year improvement was due to tight control over spending on advertising and promotions, reduced handset subsidies resulting from a lower-cost mix of PCS handsets negotiated by the Company, the higher mix of prepaid versus postpaid gross additions, as well as lower channel compensation costs.

     General and administrative expenses (“G&A”) consist of employee compensation and benefits, and facilities, client services, bad debt and various other expenses. G&A expenses were $105.1 million for 2002, compared to spending of $92.2 million in 2001. The increase was due primarily to higher bad debt expense, which can be attributed to a larger number of lower-credit customers in the subscriber base as a result of past marketing programs and policies implemented to optimize postpaid customer acquisition. As a percentage of service revenue, however, G&A remained virtually unchanged, year-over-year, reflecting the Company’s ability to control overhead costs and achieve additional operating efficiency.

     Consequently, PCS EBITDA for 2002 increased by $87.7 million to $95.9 million from $8.2 million in 2001. Despite high churn, this result was achieved because of a 10% year-over-year increase in service revenues, as well as an 11% reduction in costs and operating expenses (before depreciation and amortization) attributable to lower contribution fees, lower handset costs and tight control over selling and marketing expenses. EBITDA as a margin of service revenue expanded to 17% for the year ended December 31, 2002 from 2% one year earlier. While part of the margin improvement, year-over-year, relates to slow customer growth and hence lower marketing expenses, it also relates to improved operating cost efficiencies, as well as to the favorable impact from the reversal of a cumulative handset sales tax provision in the second quarter. Excluding the favorable $13.8 million provincial sales tax clarification on handset subsidies, PCS EBITDA for 2002 was $82.1 million.

Year ended December 31, 2001, compared with the year ended December 31, 2000

PCS Selected financial information (In millions of dollars)

Years ended December 31,	2001		2000			Variance
	$		$			$
	(Restated)		(Restated)
Revenues		542.5		407.7			134.8
Costs and operating expenses (excluding restructuring charges, depreciation and amortization)		534.3		513.4			20.9
PCS Segment operating income (loss)		8.2		(105.7	)		(113.9	)

     The increase in revenues was the result of increased activities in all CMAs covered as of December 31, 2000, the growth of wireless penetration in Canada, and the launch of commercial operations in four additional CMAs since that date. As of December 31, 2001, the Company had 1,209,210 subscribers, representing an increase of 31% in its subscriber base compared with December 31, 2000. Fido postpaid service accounted for 637,698 subscribers and Fido prepaid service accounted for 571,512 subscribers.

PCS revenues (in millions of dollars)

Years ended December 31,	2001		2000		Variance
	$		$		$
	(Restated)		(Restated)
Services		509.0		365.5		143.5
Equipment sales		32.4		40.3		(7.9	)
Revenue – intersegment		1.1		1.9		(0.8	)
Revenues		542.5		407.7		134.8

     Service revenues increased by 39% on a year-over-year basis to reach $509.0 million. Fido postpaid ARPU increased to $60.56 for the year from $56.69 in 2000. This increase was due mainly to higher value-added service revenues following the addition of the Unlimited Evenings and Weekends option to the range of Fido options as well as higher roaming and PCS License fee revenues.

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On the other hand, Fido prepaid service provided an ARPU of $20.99 for the year, compared with $27.14 in 2000. This decrease was due mainly to lower minutes of usage following the success of the migration program, which prompted the migration of high-usage customers from Fido prepaid to Fido postpaid. When combined, Fido postpaid and Fido prepaid services provided a blended ARPU of $41.14 for the year, compared with $43.55 in 2000.

     The monthly churn rate (number of deactivated users divided by the average number of active users in the period), excluding returns during the satisfaction guarantee periods, was 2.6% in 2001 compared with 2.2% in 2000 as a result of higher prepaid churn mainly due to the reduction of the validity period on the $10 prepaid vouchers.

PCS costs and operating expenses (in millions of dollars)

Years ended December 31,	2001		2000		Variance
	$		$		$
	(Restated)		(Restated)
Cost of products and services		326.7		304.5		22.2
Selling and marketing		114.2		118.9		(4.7	)
General and administrative		92.2		90.0		2.2
Operating expenses – intersegment		1.2		—		1.2
Costs and operating expenses (excluding restructuring charges, depreciation and amortization)		534.3		513.4		20.9

     The increase in costs and expenses in 2001, as compared with 2000, is directly related to network expansion and to the rapid growth of the subscriber base. However, the retail cost of acquisition per subscriber, which consists of a handset subsidy and related selling and marketing expenses, decreased by 17% in 2001, to $321, compared with $388 in 2000. The decrease in the retail cost of acquisition per subscriber is mainly attributable to the lower cost of handsets negotiated by the Company and to the improved per-unit selling and marketing expenses brought about by economies of scale from the Company’s rapid subscriber growth.

     The cost of products and services increased to $326.7 million in 2001, compared with $304.5 million in 2000. This increase is the result of an increase of $6.6 million in equipment costs mainly due to the higher volume of handsets sold partially offset by their lower per-unit cost; an increase of $8.8 million in network operating costs due to higher contribution revenue charges paid to the CRTC partially offset by lower site-related expenses; and, an increase of $6.8 million in customer care and training costs. The increased cost of products and services is consistent with the Company’s network enhancement activities, as well as the expansion of its subscriber base.

     Selling and marketing costs include compensation expenses and other distribution channel costs, as well as advertising expenses. Lower selling and marketing costs reflects cost control over advertising and promotion expenses in a highly competitive wireless environment. The number of points of sale increased by 34% to 5,184 as of December 31, 2001, compared with 3,870 as of December 31, 2000.

     The increase of $2.2 million in general and administrative expenses was mainly due to higher subscriber-related expenses and higher capital tax partially offset by lower salaries and benefits. As of December 31, 2001, the number of employees within the PCS business was 2,302 (expressed in full-time equivalent), compared with 2,495 as of December 31, 2000.

Wireless Internet Segment

     Through its Wireless Internet business segment, the Company provides mobile Internet services to its PCS subscribers and had planned to build a high-speed Internet Protocol-based data network using MCS technology in the 2500 MHz range.

Year ended December 31, 2002, compared with the year ended December 31, 2001

Selected financial information (in millions of dollars)

Years ended December 31,	2002			2001			Variance
	$			$			$
Revenues		1.9			7.6			(5.7	)
Costs and operating expenses (excluding impairment of intangible assets, depreciation and amortization)		13.5			20.3			(6.8	)
Impairment of intangible assets		223.4			—			223.4
Wireless Internet segment operating loss		(235.0	)		(12.7	)		222.3

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     During 2002, the activities in the Wireless Internet Segment were reduced due to the Company’s business plan guidelines to keep the allocation of resources outside the PCS segment to a minimum, unless these operations could be independently financed. Nevertheless, during 2002, Inukshuk continued to conduct trials to test the next generation of broadband wireless technology with certain vendors.

     Revenues for 2002 decreased by $5.7 million, year-over-year, due to the fact that Microcell i5 Inc. (“Microcell i5”) has abandoned its commercial activities in 2002. Revenues of $1.9 million represent management fees charged by the Wireless Internet segment to the PCS segment for the maintenance of the portal used by the PCS segment.

     Costs and operating expenses before impairment of intangible assets, depreciation and amortization decreased to $13.5 million for 2002, compared with $20.3 million for 2001. This decrease reflects the reduction of the activities in this segment.

     For a period of time during 2002, the Company had been pursuing negotiations with potential business partners to secure financing for its MCS project to be carried out by Inukshuk. During 2002, the likelihood of concluding such an agreement became uncertain. Given this fact, and considering the difficult financial market conditions that the telecommunications industry is facing, the Company wrote down the value of the MCS Licenses to nil. Accordingly, a non-cash expense affecting the Wireless Internet segment in the amount of $223.4 million was recorded in 2002.

     As a result, the Company posted a Wireless Internet segment operating loss of $235.0 million for 2002, compared with $12.7 million in 2001.

Year ended December 31, 2001, compared with the year ended December 31, 2000

Selected financial information (in millions of dollars)

Years ended December 31,	2001			2000		Variance
	$			$		$
Revenues		7.6			9.3		(1.7	)
Costs and operating expenses (excluding restructuring charges, depreciation and amortization)		20.3			6.8		13.5
Wireless Internet segment operating income (loss)		(12.7	)		2.5		(15.2	)

     In 2001, revenues of $7.6 million decreased by $1.7 million following the deferral of revenues in the amount of $4.6 million following the sale to Solutions of licenses for the use of wireless Internet services developed by Microcell i5. Costs and operating expenses before restructuring charges, depreciation and amortization, increased to $20.3 million in 2001, compared with $6.8 million in 2000. This increase was mainly due to the fact that the Wireless Internet segment, through Microcell i5, was in operation for the full year in 2001 compared to 2000 when it only commenced operations during the year.

Investments Segment

     The Investments segment consists mainly of various wireless or high technology investments or projects that primarily involve Microcell Capital and Microcell Labs.

Year ended December 31, 2002, compared with the year ended December 31, 2001

Selected financial information (In millions of dollars)

Years ended December 31,	2002		2001		Variance
	$		$		$
Revenues		—		0.2		(0.2	)
Costs and operating expenses		—		2.8		(2.8	)
Loss in value of investments and marketable securities		16.1		32.5		(16.4	)
Share of net loss in investees		13.2		5.3		7.9
Investments segment operating loss		29.3		40.4		(11.1	)

     The Investments segment operating loss stood at $29.3 million for the year ended December 31, 2002, compared with $40.4 million in 2001. Zero costs and operating expenses for 2002 reflect the Company’s objective to focus on its core PCS business segment with minimal activities in the other segments. Lower loss in value of investments and marketable securities of $16.4 million was mainly due to the lower number of investments and marketable securities in the Company’s portfolio during 2002. Higher share of loss in investees of $7.9 million was a result of a general decline in market conditions for high-technology companies in 2002, which are the main component of the investees’ portfolio.

42

Year ended December 31, 2001, compared with the year ended December 31, 2000

Selected financial information (In millions of dollars)

Years ended December 31,	2001			2000			Variance
	$			$			$
Revenues		0.2			0.2			—
Costs and operating expenses		2.8			3.6			(0.8	)
Net gain on disposal of investments		—			286.0			(286.0	)
Loss in value of investments and marketable securities		(32.5	)		(248.3	)		(215.8	)
Share of net income (net loss) in investees		(5.3	)		20.6			(25.9	)
Investments segment operating income (loss)		(40.4	)		54.9			(95.3	)

     The Company posted an Investment segment operating loss of $40.4 million in 2001 compared with an operating income of $54.9 million in 2000. This variation was due mainly to the decline in market conditions for high-technology companies in 2001, which are the main component of the Company’s portfolio, compared with the effervescence of the market in 2000. In fact, a net gain of $286.0 million was realized in 2000 due mainly to the Company’s sale of both its directly and indirectly held investments in Saraide.com Inc. to InfoSpace. Under the terms of the agreement, InfoSpace merged Saraide with its own wireless services business and created Saraide, Inc., a new subsidiary of InfoSpace. In exchange for its total ownership of Saraide, the Company received 2,281,326 InfoSpace shares and a direct ownership interest of approximately 4.3% in the new company created, Saraide, Inc.

     The loss in value of investments and marketable securities decreased by $215.8 million in 2001 compared with the previous year. This was due mainly to the lower level of InfoSpace shares held in 2001 following the sale of 961,894 shares in 2000 and 911,767 shares early in 2001, and to the fact that the major part of the decline in market conditions occurred in 2000. Also, the weighted-average market value of the 911,767 shares sold in 2001 was guaranteed at U.S.$50.72 under a put and call option agreement entered into by the Company to manage the risk associated with fluctuations in the market value of the underlying shares, which reduced the effect of the loss in value of those shares.

     Finally, the Company recorded in 2001, a share of net loss in its equity investments, which amounted to $5.3 million compared with a share of net income of $20.6 million in 2000 due to the general decline in market conditions of high-technology companies.

LIQUIDITY AND CAPITAL RESOURCES

     The following should be read in conjunction with the Reorganization section discussed above.

     As at December 31, 2002, the Company had cash and cash equivalents and short-term investments and marketable securities in the amount of $110.3 million, compared with cash and cash equivalents and short-term investments and marketable securities of $178.5 million as at December 31, 2001.

     In comparison with December 31, 2001, receivables decreased by $14.2 million mainly due to a lower postpaid subscriber base. Capital assets decreased by $108.4 million due to depreciation expense in the amount of $234.4 million (including write-downs of $37.1 million discussed in the consolidated results section), partially offset by cash investments of $124.7 million primarily for the PCS network. Intangible assets decreased by $223.4 million due to the impairment charge recorded for the MCS Licenses in the second quarter of 2002. Long-term investments decreased by $24.3 million mainly due to the Company’s share of loss in its investees of $13.2 million (due to the general decline in market conditions of high-technology companies which are the main component of the Company’s investees) and the devaluation of certain of the Company’s investment in the amount of $11.8 million. The decrease in deferred charges and other assets of $42.9 million was mainly due to the termination, in 2002, of the cross-currency swap ($25.0 million), the write down of the deferred financing costs ($18.9 million), partially offset by higher deferred financing costs following the closing of the new $100.0 million Tranche F senior secured credit facility in February 2002 ($19.7 million minus amortization of 9.1 million) and the write down of different deferred charges with respect to certain development projects. The increase in accounts payable and accrued liabilities of $26.0 million was mainly attributable to unpaid accrued interest on the Company’s 1996 and 1997 senior discount notes.

     As of December 31, 2002 the Company was not in compliance with certain of its covenants (see note 1 to the audited consolidated financial statements for the year ended December 31, 2002) and as such the long-term debt was in default. In addition, as part of a forbearance agreement entered into on October 31, 2002, the Company and the senior secured lenders mutually agreed to terminate the senior secured revolving credit facility in the amount of $270.8 million. The $136.6 million increase in the long-term debt (current and long-term portion) was due to the new $100.0 million Tranche F senior secured term loan and to accreted interest of

43

$72.8 million on the senior discount notes, partially offset by an exchange rate improvement of $25.5 million and the repayment of $10.7 million on the senior secured credit facilities.

Reported results (in millions of dollars)

Years ended December 31,	2002			2001			2000
	$			$			$
Cash used in operating activities		(41.0	)		(122.3	)		(105.7	)
Cash used in investing activities		(20.6	)		(383.9	)		(329.6	)
Cash provided by financing activities		69.5			437.7			396.8

     The Company used $41.0 million of cash in operating activities for the year ended December 31, 2002, compared with $122.2 million in 2001, for a decrease of $81.2 million. This favorable variance resulted primarily from a positive EBITDA (excluding the reversal of a non-cash sales tax provision of $13.8 million) of $77.2 million for the twelve-month period ended December 31, 2002, compared with a negative EBITDA of $9.8 million for 2001, and a decrease in cash used in operating assets and liabilities of $82.3 million. These decreases in cash used in operating activities were partially offset by an increase in cash interest expense and other of $85.8 million (mainly due to the interest payable on the senior discount notes due 2006 and 2007) and higher restructuring charges in the amount of $2.3 million. The restructuring charges in 2002 and 2001 related to severance payments made to a number of employees laid off during both years.

     Cash used in investing activities was $20.6 million for the year ended December 31, 2002, compared with $383.9 million during 2001, for a decrease of $363.3 million. This difference was mainly attributable to lower additions to capital assets and deferred charges of $159.8 million, resulting from lower cash investments in the PCS network, which reflected the Company’s continuing focus on cash preservation. It was also due to lower additions to intangible assets of $130.0 million, the amount which was paid by the Company in 2001 as the final installment for the acquisition of the remaining 50% interest in Inukshuk. In addition, higher proceeds from the sale of short-term investments and marketable securities of $40.3 million contributed to the favorable variance. Finally, the decrease in cash used in investing activities can be explained by the proceeds of $32.0 million received mainly from the termination of the Company’s hedging agreements, as well as by a lower cash investment of $1.2 million in Argo II.

     The Company has committed to invest, in the form of a subscription for units, U.S.$10.0 million in Argo II and, as of December 31, 2002, U.S.$5.5 million has been paid. During 2002, the Company was asked to contribute an additional U.S.$0.5 million, as part of its original commitment. The Company asked for a grace period to pay its capital contribution and Argo II’s general partners agreed to postpone the payment until the end of the Company’s recapitalization. This investment has been reduced to its estimated fair value of nil as at December 31, 2002. The Company has not yet decided if it will maintain its commitment for the remaining $4.5 million.

     Cash provided by financing activities for the twelve-month period ended December 31, 2002 was $69.5 million, compared with $437.8 million for 2001, for a decrease of $368.2 million. This decrease was mainly due to the lower amount of cash provided as a result of the issuance of $439.3 million in shares related to the two Company’s equity financing initiatives in 2001 (174,691,777 Class B Non-Voting Shares issued in 2001 compared with nil in 2002), partially offset by the closing, in the first quarter of 2002, of a new $100.0 million senior secured credit facility (“Tranche F”). In addition, higher financing costs of $18.2 million with respect to the Tranche F and the repayment of senior secured loans in the amount of $10.7 million contributed to the variance.

ACCOUNTING DEVELOPMENTS

     The Canadian Institute of Chartered Accountants recently issued Section 3063, Impairment of Long-Lived Assets. This Section establishes standards for the recognition, measurement and disclosure of the impairment of long-lived assets held for use. The new standard replaces requirements on the write-down of assets previously contained in Section 3061, Property, Plant and Equipment and is effective for 2004. The Company is currently assessing the new regulations and the impact that adoption will have on its consolidated financial statements. Similar requirements were also issued in the United States under Statement of Financial Accounting Standard No. 144.

     In November 2001, the CICA issued Accounting Guideline 13, Hedging Relationships (“AcG-13”). AcG-13 establishes new criteria for hedge accounting and will apply to all hedging relationships in effect for the Company’s 2004 fiscal year under Canadian GAAP. To qualify for hedge accounting, consistent with U.S. GAAP, 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 flows between the hedged item and the hedge. The Company currently documents all hedging relationships on an ongoing basis.

44

RISKS AND UNCERTAINTIES

Cash Flow and Capital Requirements

     The current business plan of the Company does not expect to require additional financing assuming it is implemented without material variances; however, if actual results vary from the business plan and if the assumptions underlying the business plan were to change, additional funds may be required.

     Sources of funding for the Company’s further financing or refinancing requirements may include, in addition to the new credit facilities under the Plan, additional bank financing, vendor financing, public offerings or private placements of equity or debt securities, capital contributions from shareholders and disposition of assets. There can be no assurance that additional financing will be available to the Company or, if available, that it can be obtained on a timely basis and on terms acceptable to the Company. Failure to obtain the new credit facilities or such additional financing in this context could result in the delay or modification of the Company’s level of services or in the delay or failure to meet license conditions, which could result in a loss of the PCS License and/or the MCS licenses. Any of these events could impair the Company’s ability to meet its debt service requirements and could have a material adverse effect on its business.

     The new credit facilities contain restrictive covenants which may affect, and in some cases significantly limit or prohibit, among other things, the Company’s ability to incur indebtedness, raised private equity, make prepayments of certain indebtedness, create liens, sell assets, make capital expenditures and engage in acquisitions, mergers, amalgamations and consolidations. In addition, the new credit facilities require the Company to maintain certain financial ratios, including minimum liquidity level, EBITDA levels, ARPU levels, subscriber and revenue levels and maximum levels of capital expenditures. If the Company fails to comply with the various covenants of its indebtedness, it will be in default under the terms thereof, which would permit holders of such indebtedness to accelerate the maturity of such indebtedness and could cause defaults under other indebtedness or agreements. In such circumstances, the lenders under the new credit facilities could foreclose upon all or substantially all of the assets of the Company and its subsidiaries, which will be pledged to secure the obligations of the borrowers thereunder.

     Since the implementation of the restructuring plan, the total long-term debt of the Company is $350 million (including a current portion of $7.5 million). In addition, the Company has access to $25 million in the form of a revolving credit facility and could incur up to an additional $50 million of indebtedness thereunder.

     The level of the Company’s indebtedness could have consequences, including: (1) the Company’s ability to obtain additional financing in the future for capital expenditures, working capital, operating losses, debt service requirements or other purposes; (2) the Company’s flexibility in planning for, or reacting to, changes to its business and market conditions; (3) the Company’s ability to compete; and (4) the Company’s vulnerability in the event of a downturn in its business.

Exchange Rate Fluctuations

     As most of the Company’s revenues are expected to be received in Canadian dollars, the Company is exposed to foreign exchange risk on repayments at maturity of the 1996 and 1999 Notes and their potential early redemption, and on Tranches B, E and F of the Senior Secured Term Loans denominated in U.S. dollars.

     In the past, the Company has entered into a hedging arrangement with respect to the 1999 Notes but has terminated this arrangement in the fourth quarter of 2002. Although the Company may enter into other such transactions to hedge the exchange rate risk with respect to any other U.S. dollar-denominated debt and transactions, there can be no assurance that the Company will engage in such transactions or, if the Company decides to engage in any such transaction, that it will be successful and that changes in exchange rates will not have a material adverse effect on the Company’s ability to make payments in respect of its future U.S. dollar-denominated debt. Such transactions may require that the Company provide cash or other collateral to secure its obligations. As of December 31, 2002, borrowings of approximately $1,416 million were in U.S. dollars and unhedged. A $0.01 variation in exchange rates affects the Company’s foreign exchange loss or gain by approximately $9.0 million. Assuming the successful implementation of the Plan, the foreign exchange risk on repayments at maturity of the long-term debt will be reduced as borrowings of approximately $200 million will be in U.S. dollars.

     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 loss or gain on the translation of any U.S. cash and cash equivalents or U.S. dollar-denominated debt into Canadian currency. Such foreign exchange gain or loss on the translation of U.S. dollar-denominated long-term debt is included in income as it arises. Consequently, the Company’s reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses.

45

Interest Rate Fluctuations

     In the past, the Company has entered into hedging arrangements with respect to a portion of the variable-rate debt drawn where floating interest rates were swapped to fixed interest rates or to within a fixed range of variable rates. During the fourth quarter of 2002, the Company terminated all such hedging arrangements. As of December 31, 2002, a one-percentage point change in interest rates could affect the Company’s cash flow by approximately $5.9 million. With the successful implementation of the Plan, the interest rate risk on the debt will be reduced significantly given the debt reduction of approximately $1.7 billion.

Future cash flows; Ability to Service Debt

     The Company may experience growth-related capital requirements arising from the need to fund of network capacity improvements and ongoing maintenance and to fund the cost of acquiring new PCS customers. Microcell’s ability to generate positive net income and cash flow in the future is dependent upon various factors, including the level of market acceptance of its services, the degree of competition encountered by the Company, the cost of acquiring new customers, technology risks, the future availability of financing, the results of its equity investments, general economic conditions and regulatory requirements. There can be no assurance that the Company will achieve or sustain positive cash flow from operating activities. If the Company cannot achieve positive cash flow from operating activities, it may not be able to meet its debt service or working capital requirements or obtain additional capital required to meet all of its cash requirements. In addition, the Company will be required to make interest payments under certain financing arrangements and will be required to make payments of principal thereunder.

Contingency

     On April 10, 2002, ASP Wireless Net Inc. (“ASP”), a former service provider of Connexions, filed a notice of arbitration pursuant to an agreement that ASP had with Connexions. ASP claims in the notice of arbitration that Connexions has breached its agreements with ASP and that it therefore suffered damages in the amount of $18.5 million, which ASP is claiming from the Company. The Company considers ASP’s claim as frivolous and unfounded in fact and in law and intends to vigorously contest it.

FUTURE OUTLOOK

     With effective implementation of its capital restructuring plan on May 1, 2003, Microcell will strengthen its financial position. The plan provides for a comprehensive recapitalization of the Company that significantly reduces its debt obligations by approximately $1.7 billion and its annual interest obligations by a range of $160 to $200 million. Once this process has been completed, Microcell’s goal is to re-establish itself as a strong competitor in the Canadian wireless market, providing affordable and innovative PCS services and positioning itself as a preferred access network for the mass market.

     Despite the industry slowdown experienced in 2002, wireless was the only segment of Canadian telecom that enjoyed solid growth. Wireless revenue growth in Canada for 2002 exceeded 10%, compared to revenue growth in the Canadian telecom market of approximately 3%. The trend is expected to continue for the wireless industry, as the industry players remain focused on profitable subscriber growth over mere market share. Moreover, wireless data remains an important growth opportunity that may provide some additional upside. This, however, will depend not only on availability of devices and consumer-oriented applications, but also, and more importantly, on consumer awareness and usage.

     While most industry analysts agree on the longer-term potential for cellular in Canada, they are cautious about growth for 2003 until there is some evidence of a sustainable resurgence in subscriber growth. Accordingly, the wireless market in Canada is expected to continue growing at a similar rate to 2002. Wireless penetration at the end of 2002 was approximately 38% and is expected to approach 42% by the end of 2003. At these penetration levels, there is still ample room for wireless voice services to grow in Canada, especially given the proliferation of new handsets with high-end features. Microcell believes it is well positioned operationally, financially and strategically to acquire its fair share of new subscribers.

     The Company’s strategic direction is to focus primarily on core PCS operations within the retail consumer and individual business user market segments. In order to position its wireless service as a preferred means of communication for the mass market, the Company has designed its postpaid service marketing strategy based on specific product attributes, such as big-minute bundles, per-second billing, no contract, worldwide roaming and competitive long-distance rates, while its prepaid service marketing strategy is centered on product features such as flexibility, spending control, simple, convenient and mobile replenishment, as well as postpaid-type per-minute pricing and bundled value-added services.

     The key elements that will guide Microcell’s business strategy in 2003 and beyond are as follows:

(1) allocate resources primarily to PCS activities with a high impact on the customer base; the allocation of resources to non-PCS operations will be kept to a minimum, unless these activities can be self-financed;

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(2)	target mass-market retail consumer segments with the highest growth potential, such as the youth, young adult and urban professional markets, as well as individual/business users/small office/home office business users located in major metropolitan areas, using direct-to-consumer distribution channels, including corporate-owned stores, third-party retailers, and a direct sales force;
(3)	offer simple, affordable and relevant PCS products, services and devices that meet the everyday personal and business needs of customers, while minimizing operating costs;
(4)	adopt a “fast-follower” approach to reduce the costs and business risks associated with new product and service development;
(5)	leverage the existing customer base by offering a variety of enhanced value-added voice-related and SMS-based data services to encourage incremental usage and to maintain current levels of ARPU;
(6)	provide a superior level of customer service, invest in customer retention programs, and ensure customers are matched to the right payment method to optimize satisfaction and foster loyalty;
(7)	focus network improvements primarily on capacity and maintenance;
(8)	increase network capacity on a timely basis to support customer growth requirements and enhance existing network coverage through improvements to signal strength in markets already being served; and
(9)	discontinue active solicitation of wholesale business, while continuing to support existing third-party service providers and considering wholesale proposals.

     The financial and operating targets established for 2003 reflect the above-mentioned strategic guidelines and incorporate the effects of the Company’s conscious decision to restrict growth as a means to preserve liquidity, while engaged in the capital restructuring process. Accordingly, the Company expects to continue reporting a low number of new gross customer activations and subscriber losses during the first half of 2003. Now that the recapitalization process is finalized, the Company intends to actively resume customer acquisition and to regain market momentum through reestablishing its market presence. Now, the focus will return increasingly to revenue and EBITDA growth. The Company also expects the blended churn rate to improve and to begin returning closer to historical levels, now that the capital reorganization is completed and once the effects from past postpaid acquisition programs and last year’s prepaid price structure modifications begin to subside.

     Due to softer subscriber growth and higher churn in the first half of 2003, compared with the latter half of the year, the Company’s expects that total revenues for 2003 will remain relatively flat to slightly down compared with 2002. As a result, the Company will continue to adjust its cost structure on an ongoing basis to match it with the revenue streams that will be generated. Consequently, EBITDA is expected to remain at roughly the same level as for 2002 on a normalized basis.

     Moreover, due to the substantial reduction in long-term debt stemming from the capital reorganization, the Company’s interest expense will be significantly reduced once the Company begins “fresh start” accounting in May 2003. In addition, the reclassification and write-down of certain assets as a result of the capital reorganization, will result in a reduced depreciation and amortization expense going forward. Given that the Company’s network buildout is substantially completed and that a more cautious outlook for subscriber growth is expected, capital expenditures for 2003 should be lower with spending concentrated on maintenance capacity improvements for subscriber and usage growth, as well as on enhancement of PCS digital coverage and signal strength in markets already being served. As a result, the Company expects to near free cash flow break-even for 2003. Free cash flow is defined as EBITDA less capital expenditures, interest paid, cash taxes and changes in working capital.

     In 2003, Microcell will continue to show financial discipline, while striving for profitable revenue growth and continued operating and capital cost containment. This is expected to result in stable ARPU and COA, as well as a reduced churn rate compared with figures from fourth quarter of 2002, despite relatively flat gross additions. The primary goal for management coming out of the recapitalization is resume subscriber growth while controlling costs to maintain EBITDA levels. The key measures on which management will measure its performance are as follows:

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	2003 Target	2002			Change
Gross Additions	540,000 to 570,000		548,000		(8,000) to 22,000
Blended churn rate	3.2% to 3.5%		3.4	%	10 bps to 20 bps
Total revenues	$550 to $580 million	$	591 million		$(11) to $(41) million
EBITDA(1)	$65 to $75 million	$	77 million		$(8) to $(2) million
CAPEX	$80 to $90 million	$	125 million		$(35) to $(45) million

(1) The figure for 2002 excludes a one-time benefit arising from the reversal of a $13.8 million handset subsidy tax provision.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

     As a condition of its PCS License, Microcell is to invest at least 2% of its adjusted gross revenues, resulting from 2 GHz PCS operations, on PCS-related research and development averaged over the five years of the current PCS License term, which runs until 2006. During 2002, 2001 and 2000, Microcell spent approximately $4,085,000, $7,033,000 and $7,838,000 respectively on research and developments activities.

ITEM 6 — DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

New Board

     The table below sets forth the name, principal occupation and date of the appointment of each actual member of the New Board since the implantation of the Plan on May 1, 2003.

		Director of
Name	Principal Occupation	Microcell Since
ANDRÉ BUREAU	Chairman of the New Board of Microcell and of Astral Media Inc.	May 1998
ANDRÉ TREMBLAY	President and Chief Executive Officer of Microcell	May 1995
CHARLES SIROIS	Chairman and President of Telesystem Ltd.	December 1993
JAMES CONTINENZA	President and Chief Executive Officer of Teligent, Inc.	May 2003
CHRISTIAN DUBÉ	Senior Vice-President and Chief Financial Officer of Domtar Inc.	May 2003
GARY GOERTZ	Corporate Director	May 2003
ROBERT LATHAM	President of RFL Consulting	May 2003
PAUL MCFARLANE	Corporate Director	May 2003
BERL NADLER	Partner with Davies Ward Phillips and Vineberg LLP	May 2003
STEVEN D. SCHEIWE	President of Ontract Advisors Inc.	May 2003
LORIE WAISBERG	Corporate Director	May 2003

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     Pursuant to the Plan: (1) Mr. André Bureau, Mr. Jim Continenza, Mr. Christian Dubé, Mr. Gary Goertz, Mr. Robert Latham, Mr. Paul McFarlane and Mr. Berl Nadler were nominated by the secured creditors; (2) Mr. Steven D. Scheiwe and Mr. Lorie Waisberg were nominated by the noteholders; and (3) Mr. Charles Sirois was nominated by the Old Board. See “Composition of the Board” below for more details on the nomination of the directors on the New Board.

     The principal occupation of each director during the past five years is as follows:

     André Bureau was appointed a director of Microcell on May 8, 1998. Since May 14, 2003 Mr. Bureau has been Chairman of Microcell. Since December 1997, he has been Chairman of the board of Astral Media Inc., Canada’s largest operator of English and French specialty, pay and pay-per-view television services, Astral also owns 24 radio stations in Quebec and the Atlantic provinces, as well as Astral Affichage, for outdoor advertising, and was President and Chief Executive Officer of Astral Broadcasting Group Inc. from 1993 until October 2001. Mr. Bureau is also counsel at Heenan Blaikie LLP. Before 1989, Mr. Bureau was Chairman of the CRTC.

     André Tremblay has been President and Chief Executive Officer of Microcell since May 1995 and was Chairman of Microcell from August 10, 1999 to March 9, 2000. Mr. Tremblay has been actively involved in the telecommunications industry since 1989. Prior to 1989, Mr. Tremblay was a tax partner and member of the management committee of Raymond, Chabot, Grant, Thornton, a Canadian accounting firm.

     Charles Sirois has been a director of Microcell since December 9, 1993. Mr. Sirois was the Chairman of Microcell until May 1, 2003. Since 1990, Mr. Sirois has been Chairman and President of Telesystem Ltd., an entrepreneurial private equity company of which his is the founder and principal shareholder. Mr. Sirois is also Chairman of Telesystem International Wireless Inc. From 1992 to February 2000, Mr. Sirois was Chairman and Chief Executive Officer of Teleglobe Inc., a leading global provider of broadband services with the most extensive global Internet network. From 1988 to 1990, Mr. Sirois was Chairman and Chief Executive Officer of BCE Mobile Inc. He currently sits on the board of directors of the Canadian Imperial Bank of Commerce and is Chairman and CEO of Enablis Entrepreneurial Network, a non-profit organization sponsored by the G8 DotForce. He was also a member of the G8 dot force, of the National Broadband Task Force and was a founding member of the Washington-based Global Information Infrastructure Commission (GIIC).

     James Continenza has been a director of Microcell since May 1, 2003. Mr. Continenza is Chief Executive Officer and a director of Teligent, Inc. a full service facilities based communications company offering small and medium size business customers local and long-distance telephony, high speed data and internet access services. Prior to September 2002, Mr. Continenza was Chief Operating Officer and a Director of Teligent, Inc. From September 2000 to May 2001, Mr. Continenza served a Senior Vice-President Strategic Operations of Teligent, Inc. Prior to joining Teligent, Inc., Mr. Continenza was President and Chief Executive Officer of Lucent Technologies Product Finance where he worked for eleven years with Lucent and its predecessor AT&T. Mr. Continenza holds a degree in business administration from the University of Wisconsin.

     Christian Dubé has been a director of Microcell since May 1, 2003. Mr. Dubé is Senior Vice-President and Chief Financial Officer of Domtar Inc., the third largest integrated manufacturer and marketer of fine paper in North America. From 1996 to 1998 he was Vice-President Corporate Development of Domtar Inc. Mr. Dubé is a director of Norampac Inc. and of NB Capital Corporation. He has been a Chartered Accountant since 1979 and holds a bachelor’s degree in business administration from Laval University.

     Gary Goertz has been a director of Microcell since May 1, 2003. Mr. Goertz was Executive Vice-President, Finance and Chief Financial Officer of MDS Inc., the largest health and life science company in Canada from September 1999 to February 2003. From March 1994 to August 1999, Mr. Goertz was Executive Vice-President & CFO of Telus Corporation Inc., formerly BCT.Telus Communications Inc. Mr. Goertz is a Chartered Accountant. Mr. Goertz is also a director of MDS Capital Corp. and MDS Proteomics Inc. and is a trustee of Associated Brands Operating Trust.

     Robert Latham has been a director of Microcell since May 1, 2003. Since April 2001, he has been the President of RFL Consulting, a company providing consulting advice to small entrepreneurial companies and other organizations developing and expanding new business. Since December 2002, he has been the Chairman of Objectworld Technologies Ltd. From February 2001 to April 2001 he was Chairman and Chief Executive Officer of Axxent Inc. a telecommunications company in Canada where he also served as President and Chief Executive Officer from September 1999 to February 2001. From January 1998 to September 1999, he was President of ORBCOMM Global L.P. a telecommunications company based in Dulles, Virginia. He also served as Executive Vice-President of ORBCOMM from April 1997 to January 1998. From February 1996 to February 1997, Mr. Latham was Managing Director, Telecom for Bell Canada International Management Ltd., U.K. From April 1996 until November 1996, Mr. Latham was seconded to Mercury Communications Limited in London England, a facilities-based carrier, as the Managing Director, Commercial Service. Mr. Latham spent the previous 28 years with Bell Canada in a wide variety of Sales, Marketing, Operations, Customer Service and Regulatory assignments. During this period, he was the President and CEO of Bell Cellular from August 1986 until August 1991 and responsible for the Signature Service Organization from July 1992 until October 1994.

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     Paul McFarlane has been a director of Microcell since May 1, 2003. Since May 1998, Mr. McFarlane has been a director of Brookfield Properties Corporation. He was also Senior Vice-President of the Canadian Imperial Bank of Commerce from February 1994 to December 2002 and prior to 1994, Mr. McFarlane held various positions with the Canadian Imperial Bank of Commerce.

     Berl Nadler has been a director of Microcell since May 1, 2003. Mr. Nadler is a senior corporate law partner of Davies Wards Phillips & Vineberg LLP and a member of the firm’s management committee. Mr. Nadler is a graduate of the Faculty of Law McGill University and the Harvard Law School.

     Steven D. Scheiwe has been a director of Microcell since May 1, 2003. Mr. Scheiwe is currently President of Ontrac Advisors Inc., a consulting firm providing analysis and management services to private equity groups, privately held companies and fund/traders of distressed corporate debt issues. Mr. Scheiwe is also a director of Nucentrix Broadband Communications, Inc. since May 2001; Neff Corporation since May 2001 and Metrocall Holdings, Inc. since October 2002. From April 1999 to May 2001, Mr. Scheiwe was the Chief Executive Officer and a director of Teletrac Inc., a provider of wireless fleet management location and communication services. From January 1996 to April 1999, Mr. Scheiwe was Vice-President, General Counsel and Secretary of Teletrac Inc.

     Lorie Waisberg has been a director of Microcell since May 1, 2003. Mr. Waisberg is also a director of McWatters Mining Inc., Chemtrade Logistics Income Fund and Specialty Foods Group Income Fund. From August 2000 to October 2002, Mr. Waisberg was Executive Vice-President Finance and Administration of Co-Steel Inc., a steel manufacturer. Prior to that, Mr. Waisberg was a partner at the law firm of Goodmans LLP and predecessor firms in Toronto, Ontario, where he had been partner since 1974.

Officers of the Company

     The following table indicates the name of the present officers of Microcell, along with their positions held with Microcell.

Name	Office	Principal Occupation
ALAIN RHÉAUME	President and Chief Operating Officer of Solutions	President and Chief Operating Officer
ANDRÉ TREMBLAY	President and Chief Executive Officer	of Solutions President and Chief Executive Officer of Microcell
DEAN PROCTOR	Vice-President, Regulatory Affairs	Vice-President, Regulatory Affairs of
GAÉTAN JACQUES	Interim Vice-President, Sales, Solutions	Microcell Interim Vice-President, Sales of Solutions
JACQUES LEDUC	Chief Financial Officer and Treasurer	Chief Financial Officer and Treasurer of Microcell
JOCELYN CÔTÉ	Vice-President, Legal Affairs and Assistant Secretary	Vice-President, Legal Affairs and Assistant Secretary of Microcell
MICHEL CORDEAU	Secretary	Lawyer
PIERRE BONIN	Chief Information Officer, Solutions	Chief Information Officer of Solutions
RENÉ BOUSQUET	Interim Vice-President, Marketing, Solutions	Interim Vice-President, Marketing of Solutions
ROBERT FORTIER	Vice-President and Corporate Controller	Vice-President and Corporate Controller of Microcell
CARL DEXTER	Vice-President, Network Services, Solutions	Vice-President, Network Services, of Solutions
BRUNO PÉLOQUIN	Vice-President, Customer Relations and Operations, Solutions	Vice-President, Customer Relations & Operations of Solutions

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     The principal occupation of each officer (other than André Tremblay) during the past five years is as follows:

     Alain Rhéaume was appointed President and Chief Operating Officer of Solutions on May 1, 2003. He was President and Chief Executive Officer of Microcell’s PCS division from February 12, 2001 to April 30, 2003. From June 1996 to February 2001, Mr. Rhéaume was Chief Financial Officer and Treasurer of Microcell and from May 1998 to February 2001, he was also Executive Vice-President, Corporate Services. Prior to joining Microcell, Mr. Rhéaume worked for the Government of the Province of Québec at the Ministry of Finance since 1974. Mr. Rhéaume was Deputy Minister of Finance from 1992 to 1996 and prior to that he was Associate Deputy Minister of Finance from November 1988 to October 1992.

     Dean Proctor has been Vice-President of Microcell since February 1996. Prior to joining Microcell, Mr. Proctor practised law in Montreal and Ottawa, focusing on broadcasting and telecommunications matters. He is a Director of the Wireless Communications Association, based in Washington, D.C., and acts as Microcell’s Privacy Ombudsman. Mr. Proctor graduated from the University of Saskatchewan with a Bachelor of Arts degree in 1984 and received bachelor degrees in Common Law and Civil Law from McGill University in 1988. Mr. Proctor is a member of the Bars of Québec and Ontario.

     Gaétan Jacques was appointed Vice-President of Microcell on August 10, 1999. Mr. Jacques is interim Vice-President, Sales of Solutions since June 2003 and was, prior to that, Vice-President, Human Resources of the Company. Before joining Microcell, Mr. Jacques was Director, Human Resources at the Canadian Broadcasting Corporation from 1993-1994 and from 1994-1999, General Manager, Technical Products and Engineering at the CBC. He also has worked for several large corporations, including Stone-Consolidated, where he performed various duties in human resources and quality management. Mr. Jacques holds an MBA and a bachelor’s degree in Industrial Relations.

     Jacques Leduc was appointed Chief Financial Officer and Treasurer of Microcell on February 12, 2001. From May 1999 to February 2001, Mr. Leduc was Vice-President Finance of Microcell. From January 1995 to May 1999, he was Director, Financial Planning of Microcell. Prior to joining Microcell, Mr. Leduc was the Corporate Controller and Officer of a privately owned business in the manufacturing and food industry from 1990 to 1995. Mr. Leduc holds a master’s degree in business administration from HEC Montréal (formerly École des Hautes Études Commerciales (University of Montreal)). He also holds a bachelor’s degree in business administration from the University of Québec in Montreal and was admitted by the Canadian Institute of Chartered Accountants in 1986.

     Jocelyn Côté was appointed Vice-President of Microcell on August 10, 2001 and Assistant Secretary on May 10, 2001. From February 1998 to August 2001, Mr. Côté was Director, Legal Affairs of Microcell. Prior to joining Microcell, he was, from 1997 to 1998, legal counsel at Le Groupe Vidéotron Ltd. and, prior to that, practiced corporate and tax law at the law firm Stikeman Elliott in Montreal. Mr. Côté holds a law degree from Laval University and a master’s degree in Taxation from Sherbrooke University. Mr. Côté is a member of the Bar of Québec.

     Michel Cordeau was appointed Secretary of Microcell on May 8, 1998. Mr. Cordeau was, from February 1996 to August 2001, Vice-President, Legal Affairs of Microcell. From March 1996 to May 1998, he was Assistant-Secretary of Microcell. Mr. Cordeau is also legal counsel for Telesystem Ltd. Mr. Cordeau was a partner of the law firm of Hickson, Martin, Blanchard in Québec City, where he practiced corporate and bankruptcy law from 1980 to 1999. Mr. Cordeau holds a law degree and a master’s degree in Law from Laval University. Mr. Cordeau is a member of the Bar of Québec.

     Pierre Bonin was appointed Chief Information Officer of the Company on December 12, 2000. Prior to joining Microcell, Mr. Bonin worked for Bell Canada from 1987 to 2000 where he held various senior management positions, including Vice-President, Information Technology and Vice-President, Finance and Administration. Mr. Bonin holds an MBA from HEC Montréal (formerly École des Hautes Études Commerciales (University of Montreal)) and other computer sciences degrees.

     Robert Fortier was appointed Vice-President of the Company on August 9, 2002. From January 1995 to August 9, 2002, Mr. Fortier was Director, Corporate Controller of the Company. Mr. Fortier chaired the Taxation Committee of the CWTA from 1997 until 2002. He holds a Bachelor’s degree in Accounting from the Université du Québec à Trois-Rivières and has been a member of the Ordre des comptables agréés du Québec since 1983.

     René Bousquet joined Microcell in March 1996 and held the position of Director with the Financial Planning and Corporate Planning departments before becoming Vice-President, Finance of Solutions in May 2002 and interim Vice-President, Marketing of Solutions in June 2003. Prior to joining Microcell, Mr. Bousquet held a number of management positions in marketing, including Director at Price Waterhouse Coopers. Mr. Bousquet holds a Bachelor’s degree in Business Administration (Marketing and Finance) from the Université de Sherbrooke and a Master’s degree in Business Administration from the same institution.

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     Carl Dexter joined Microcell in January 2001 as Vice-President, National Network and Services Operation. Mr. Dexter has 26 years of experience in the telecom industry, mainly at MTT (now Aliant Telecom) in Nova Scotia. The last position he held at MTT was that of Vice-President, Network Operations and Customer Services. Immediately prior to joining Microcell, Mr. Dexter was Vice-President, Operations Support, of the international wireless operating companies of Telesystem International Wireless (TIW).

     Bruno Péloquin joined Microcell in 1997 and is Vice-President, Customer Relations and Operations, Solutions. Prior to joining Microcell, Mr. Péloquin held positions in eastern and western Canada as Regional Director of Sales and Operations with United Parcel Service Canada Ltd. He was also Vice-President, Operations, with Diners Club/enRoute.

COMPENSATION

Remuneration of Directors

     For the fiscal year ended December 31, 2002, directors of the Company who were not officers or employees of the Company or its subsidiaries or of a shareholder for whom they were the designated nominees received $10,000 per year as well as an attendance fee per board or committee meeting. The Chairman of the Old Board received a fee of $240,000 and each Committee Chairman (except for the Special Committee Chairman) received a fee of $2,000 per year. The directors of the New Board receive a yearly fee of $35,000, plus an attendance fee per board or committee meeting. Members of the committees of the New Board receive a fee of $2,000 per year. The Chairman of the New Board receives an annual fee of $150,000. The Chairmans of the Human Resources, Corporate Governance and Audit Committees receive respectively a fee of $2,000, $2,000 and $6,000 per year. The Company has no service contracts with its directors.

Remuneration of Members of Special Committee

     At the time of the establishment of the Special Committee, compensation in respect of the members of the Special Committee was based in part upon attendance at meetings. However, in light of the difficulties of administering such a method of compensation given the frequent communications among the members of the Special Committee, the compensation was amended, with effect from September 1, 2002, to be $10,000 per month, with the Chairman of the Special Committee receiving an additional amount of $40,000 per month. No amounts based upon the number of meetings of the Special Committee are payable in addition to these monthly fees. The mandate of the Special Committee was subsequently expanded to include the powers of the Company’s Human Resources Committee and the term of the Special Committee’s mandate was extended and expired on May 1, 2003. The members of the Special Committee are also entitled to reimbursement of reasonable out of pocket expenses incurred in the course of performing their functions.

Remuneration of Executive Officers

     The table below shows certain compensation information for the respective fiscal years ended December 31, 2002, 2001 and 2000 for Mr. André Tremblay, President and Chief Executive Officer of the Company, and certain other executive officers. This information includes the dollar value of base salaries, bonus awards, long-term incentive plan payments, the number of options granted, and certain other compensation, if any, whether paid or deferred.

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SUMMARY COMPENSATION TABLE

			Annual Compensation						Long-Term Compensation Award
									Awards			Payouts
									Securities Under
							Other Annual		Options/		Restricted Shares	Long-Term Incentive	All Other
Name and Principal			Salary		Bonus		Compensation		SARs		or Restricted Share	Program Payouts	Compensation(5)
Position	Years		($)		($)		($)(1)		Granted(2)		Units	($)	($)
André Tremblay
President, Chief		2002		514,654		169,950		—		—				405,000
Executive Office		2001		498,077		247,500		—		531,681				—
and Director		2000		398,462		200,000		—		—				—
Alain Rhéaume
President and Chief		2002		374,423		101,250		—		—				271,250
Operating Officer,		2001		344,956		138,200		—		348,443				80,000
Solutions		2000		279,423		127,500		—		—				—
Pierre Bonin(4)		2002		249,770		60,000		—		—				89,000
Chief Information		2001		223,558		82,200		—		160,647				—
Officer, Solutions		2000		—		—		—		—				—
Jacques Paquin(3)
President and Chief		2002		236,596		50,745		—		—				225,000
Operating Officer,		2001		214,615		77,400		—		87,500				—
Inukshuk		2000		194,617		75,500		—		—				—
Jacques Leduc
Chief Financial		2002		219,768		52,800		—		—				157,000
Officer and		2001		206,249		72,700		—		226,058				—
Treasurer		2000		164,519		52,000		—		—				—
Sean Dalton(6)
Vice-President,		2002		209,769		37,800		—		—				70,000
Marketing,		2001		199,904		54,000		—		112,539				—
Solutions		2000		194,617		49,000		—		—				—

(1)	The aggregate value of perquisites and other benefits does not exceed, for each named executive officer, the lesser of $50,000 or 10% of the total salary and bonus.
(2)	Indicates the number of options granted under the stock option plan of Old Microcell (the “Old Stock Option Plan”) during the relevant year.
(3)	Mr. Paquin’s employment with Inukshuk was terminated in December 2002.
(4)	Mr. Bonin began employment with the Company in February 2001.
(5)	All other compensation for 2002 represents payments under the Company’s retention plan for key employees (as described below), except in the case of Mr. Paquin for whom it represents severance payments related to the termination of his employment. In the case of Mr. Rhéaume, the amount for 2001 was paid in respect to his relocation to Montreal. In order to receive payments under the retention plan, each named executive officer was required to remit for cancellation the following number of options granted under the Old Stock Option Plan: André Tremblay — 126,348; Alain Rhéaume — 88,443; Pierre Bonin — 60,647; Jacques Leduc — 53,066; and Sean Dalton — 50,539.
(6)	Mr. Dalton’s employment with Solutions was terminated on June 13, 2003.

Option Grants in last Financial Year

     No stock option grants were made to the directors and the executive officers named above under the Old Stock Option Plan during the financial year ended December 31, 2002.

Aggregate Option Exercises in Last Financial Year and Financial year-End Option Values

     The following table summarizes, for each of the executive officers named above, the number of stock options under the Old Stock Option Plan, if any, exercised during the financial year ended December 31, 2002, the aggregate value realized upon exercise and the total number of unexercised options, if any, held at December 31, 2002. Value realized upon exercise is the difference between the fair market value of the underlying class B non-voting shares of Old Microcell on the exercise date and the exercise or

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base price of the option. Value of unexercised in-the-money options at financial year-end is the difference between its exercise or base price and the closing fair market value of the underlying class B non-voting shares of Old Microcell on December 31, 2002, which was $0.10 per share. These values, unlike the amounts set forth in the column “Aggregate Value Realized”, have not been, and may never be, realized. There can be no assurance that these values will be realized. Unexercisable options are those which have been held for less than the time required for vesting. The Old Stock Option Plan, and all options issued pursuant thereto, were cancelled on May 1, 2003 pursuant to the Plan.

					Unexercised Options at				Value of Unexercised
					December 31, 2002				"in-the-Money"* Options/SARs
					(#)				at December 31, 2002
	Securities Acquired		Aggregate Value
	on Exercise		Realized(1)
Name	(#)		($)		Exercisable		Unexercisable		Exercisable		Unexercisable
André Tremblay		—		—		495,500		195,166		—		—
Alain Rhéaume		—		—		274,750		175,250		—		—
Pierre Bonin		—		—		75,000		125,000		—		—
Jacques Paquin		—		—		86,251		—		—		—
Jacques Leduc		—		—		57,888		158,012		—		—
Sean Dalton		—		—		65,500		36,500		—		—

(1)	Aggregate value realized is calculated using the closing price of the class B non-voting shares of Old Microcell on the Toronto Stock Exchange (the “TSX”) on the date of exercise.
(2)	The value of unexercised “in-the-money” options is calculated using the closing price of the class B non-voting shares of Old Microcell on the TSX on December 31, 2002, less the exercisable price of “in-the-money” options.

• “in-the-money” options are options for which the market value of the underlying securities is higher than the price at which such securities may be bought from Old Microcell.

Pension Plans for Executive Officers

     There is no pension plan implemented by the Company. There is only a deferred profit sharing plan under which the Company makes a defined contribution for the employees. No contribution under such plan was made in 2002.

Employment Agreements

     The Company is a party to employment contracts with Mr. André Tremblay, Mr. Alain Rhéaume and Mr. Jacques Leduc which provide that in the event of termination by the Company without just and sufficient cause, lay-off following a “Major Change” (as defined below) or resignation within 30 days of a “Major Change”, they are entitled to receive an amount equal to two years’ base salary, increased by their target bonus, and to exercise all vested and unvested options to acquire shares of the Company. However, in the event termination by the Company without just and sufficient cause or lay-off following a Major Change occurs after September 30, 2004, Mr. Leduc is entitled to receive an amount equal to one year’s base salary, increased by his target bonus, which is generally consistent with the Company’s employment arrangements with all of its executive officers in such circumstances. Mr. Pierre Bonin is entitled to exercise all vested and unvested options in the case of a layoff or resignation within 30 days following a major change.

     In the context of the review of its capital structure, the Company amended and restated the terms and expanded the scope of its existing retention program for key employees in order to mitigate the risks related to headhunting activities and to maintain in its employment the employees necessary for the successful completion of the recapitalization of the Company. Amounts payable by the Company thereunder are equal to the annual compensation of each employee and are payable in installments until August 2003, to the extent the employee continues to be employed at the date of each payment. In addition, upon the occurrence of a Major Change in respect of the Company, the retention program provides that all unpaid retention payments become immediately due and payable. Finally, except if a Major Change has occurred, should the Company terminate without just cause the employment of a key employee covered by the retention program before August 1, 2003, all unpaid retention payments become immediately due and payable.

     For the purposes of the above, a “Major Change” means: (1) the amalgamation of the Company with another company if as a result thereof the shareholders of the Company as of September 1, 2002 own less than 50% of the voting shares of the Company resulting from such amalgamation; (2) a take over bid (as construed in Canadian securities legislation) for all the shares of the Company, if as a result thereof the shareholders of the Company as of September 1, 2002 own less than 50% of the voting shares thereof; (3) the sale of all or substantially all of the property and assets of the Company to a person other than an affiliate of the

54

Company or Telesystem Ltd. (or any successor thereof); or (4) any other transaction resulting in the acquisition of more than 50% of the voting shares of the Company by a person other than Telesystem Ltd. (or any successor thereof) or an affiliate thereof.

Executive Compensation Policy

     A total compensation policy was introduced in 1994 to recognize and reward individual contributions to the short-term and long-term success of the Company and also ensure that the Company offers competitive compensation. This compensation policy was reviewed in 2002 and certain adjustments were made to ensure that it remained competitive with the industry.

     According to this policy, executive compensation is based on three major components: base salary, benefits and incentive compensation. The Company aims to provide base salaries and benefits targeted at a selected market median level as well as incentive programs designed to bring executive total compensation in the upper quartile upon the achievement of superior results. Incentive compensation is awarded through plans and criteria approved by the Human Resources Committee.

     The benefits consist of standard deferred profit sharing plan and insurance coverage arrangements and allowance for certain expenses.

Short-Term Incentive Compensation

     The short-term incentive compensation offers bonuses tied to the Company’s financial performance and the achievement of strategic corporate and business unit objectives established on a yearly basis.

     In the case of the named executive officers, incentive bonuses range from 30% to 90% of base salary when the financial and strategic objectives are achieved. When such objectives are exceeded, bonuses are higher; when the objectives are not met, the incentive bonuses are lower, or they may not be paid at all under certain circumstances.

     The Human Resources Committee reviewed and recommended to the Old Board the approval of the 2002 bonuses on the basis that management’s performance did not entirely meet the set of objectives presented to the Old Board at the beginning of the year.

Long-Term Executive Compensation

     The long-term incentive component is made up of the stock option plan of the Company.

Old Stock Option Plan

     Introduced in 1994 and revised from time to time, the Old Stock Option Plan was designed to motivate employees to share interest with the Old Microcell’s shareholders over the long-term and provides salary-linked stock option grants. It is of limited duration and was subject to Human Resources Committee review to ensure maintenance of its market competitiveness. With the approval of the Plan on May 1, 2003, the Old Stock Option Plan, and all outstanding options issued pursuant thereto, were cancelled.

     The Old Stock Option Plan provided for the issuance of options to employees of Old Microcell to purchase Class B Non-Voting shares of Old Microcell. Each participant in the Old Stock Option Plan was entitled to receive one grant of options per year, except for certain classes of participants who may only receive one grant of options per 3-year period. The number of options was based on the grant amount value for a class of employees multiplied by a factor of between 0 and 1.5 depending on the individual contribution of the employee and divided by the reference price fixed by the Old Board on or around July 1 of each year. The first year began on July 1, 2001 and the reference price was set at $35.00. During 2001, the class of employees eligible to be participants in the Old Stock Option Plan was extended to almost all employees as a result of the overall review of the compensation policy.

     Pursuant to the Old Stock Option Plan, options for no more than 19,000,000 Class B Non-Voting shares may be granted. The exercise price of the options was determined by the Old Board at the time of granting the options, subject to compliance with the rules of all stock exchanges on which the Class B Non-Voting shares are listed and with all relevant securities legislation.

     Options granted pursuant to the Old Stock Option Plan were exercisable as to 25% of the options on the first, second, third and fourth anniversaries of the date of the grant. Options were exercisable for a period of seven years from the date on which they are initially granted.

     Any option granted pursuant to the Old Stock Option Plan was lapsed 30 days after the date on which the holder thereof ceases to be an officer, director or employee of Old Microcell or of one of its subsidiaries. In the event of death, any option held by the optionee lapsed 180 days after the date of such death.

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New Stock Option Plan

     With the approval of the Plan on May 1, 2003, a new stock option plan of Microcell (the “New Stock Option Plan”) has been implemented. No further approval or ratification by shareholders will be sought or required in connection therewith.

     The purpose of the New Stock Option Plan is to provide an opportunity, through options, for the officers and employees of the Company and its subsidiaries to purchase Class A Restricted Voting Shares (in the case of a Canadian) or Class B Non-Voting Shares (in the case of a non-Canadian) upon exercise of options granted pursuant to the New Stock Option Plan and thereby participate in the future growth and development of the Company.

     The New Board, if the New Board so resolves, a committee thereof, will administer the New Stock Option Plan including the allocation thereof.

     Under the New Stock Option Plan, the Company has reserved for issuance Class A Restricted Voting Shares and Class B Non-Voting Shares, representing, together with such shares reserved for issuance in connection with the New Stock Purchase Plan, in the aggregate 10% of the aggregate number of Class A Restricted Voting Shares and Class B Non-Voting Shares outstanding immediately after implementation of the Plan (assuming conversion of all First Preferred Shares and Second Preferred Shares). Options granted under the New Stock Option Plan will have the terms and conditions, including exercise prices, vesting and expiration, as will be established by the New Board, from time to time, provided that the pricing of options will be in accordance with the requirements of the TSX and will not be less than the market prices for the Class A Restricted Voting Shares and Class B Non-Voting Shares at the time of the grant of options.

Compensation Plan Control and Review

     The Human Resources Committee is responsible for ensuring that executive compensation conforms to the Company’s total compensation policy.

Indebtedness of Directors and Officers

     As at May 1, 2003, the Company or its subsidiaries had not made any loan to officers, directors, employees and former officers, directors and employees of the Company and its subsidiaries.

Directors and Officers’ Liability Insurance

     Pursuant to its By-laws, the Company may indemnify a director or officer in any legal proceeding if such person acted honestly and in good faith, and had reasonable grounds to believe that such person’s conduct was lawful.

     The Company maintains insurance protection against liability incurred by its officers and directors as well as those of its subsidiaries in the performance of their duties. The entire premium, of U.S.$390,538 in 2002, was paid by the Company. The aggregate limit of liability in respect of any and all claims is U.S.$31 million per year. The policy provides for the indemnification of directors and officers in the case of claims for which the Company has not indemnified or is not permitted by law to indemnify them, and for the reimbursement of the Company, subject to a deductible of U.S.$500,000, in the case of claims for which it has indemnified or was permitted to indemnify the directors or officers involved.

BOARD PRACTICES

Role and Responsibilities of the Board

     The board is responsible for orientation and follow-up of the achievement of business objectives and of the activities of the Company. The board is responsible for approving and ensuring that the mission, the vision and the strategy adopted by the Company is respected in the pursuit of its business objectives. The board holds regular meetings on a quarterly basis as well as additional meetings to consider particular issues or conduct specific reviews whenever deemed appropriate. The board approves the Company’s ethical values and ensures that the major business risks of the Company are identified and measured and that a proper management process is implemented.

     Before the start of every fiscal year, the board receives and approves an annual budget submitted by the President and Chief Executive Officer.

     The board monitors and evaluates the performance of the President and Chief Executive Officer and of senior management. Finally, the board reviews those matters requiring the board’s approval pursuant to the law or the Company’s articles and by-laws. All important decisions of the Company and of its wholly owned subsidiaries are subject to approval by the board.

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Composition of the Board

Old Board

     According to the articles of Old Microcell, the Old Board consisted of a minimum of nine and a maximum of 15 directors. At every annual meeting held before the effective date of the Plan on May 1, 2003, management proposed to nominate individuals for election as directors of Old Microcell to hold office until the next annual meeting or until the office was otherwise vacated in accordance with the by-laws.

     Before the effective date of the Plan on May 1, 2003, the Old Board was comprised of 13 directors. 11 of the 13 actual Directors were “unrelated directors” defined in the TSX Guidelines (as defined below) as directors who are independent of management and free from any interest and any business or other relationship which would, or could reasonably, be perceived to materially interfere with the director’s ability to act in view of Old Microcell’s best interest. Old Microcell had one significant shareholder, Telesystem Ltd. The composition of the Old Board had been structured in a manner that allowed the significant shareholder to designate only six nominees and, as a result, seven of the 13 actual directors did not have interests in or relationships with Old Microcell or the significant shareholder.

New Board

     The New Board has been designated by the Court as part of the Sanction Order and the directors of the New Board were appointed on May 1, 2003, the effective date of the Plan. The New Board has been fixed at 11 directors initially, one of which is the chief executive officer of the Company from time to time. A majority of members of the New Board must be Canadians.

     The initial members of the New Board were nominated as follows:

(a)	seven appointees were selected by the secured creditors as holders of the First Preferred Voting Shares;
(b)	two appointees were selected by the AHB Committee; and
(c)	one appointee was selected by the Old Board. On January 27, 2003 the Old Board selected Mr. Charles Sirois as its appointee.

     The initial Chairman of the New Board, Mr. André Bureau, has been selected by the members of the New Board appointed by the secured creditors as holders of First Preferred Voting Shares.

     As redemptions or conversions of First Preferred Shares (or First Units) will occur over time, the number of directors nominated and elected to the New Board by holders of First Preferred Voting Shares (or First Units comprised of First Preferred Voting 2 Shares) will be reduced according to the number of First Preferred Shares (or First Units) outstanding relative to the aggregate number originally issued, as follows:

% FIRST PREFERRED SHARES (OR FIRST UNIT) REMAINING
OUTSTANDING	NO. OF DIRECTORS
70% or more		7
50% to 69.99%		6
30% to 49.99%		3
10% to 29.99%		2
Less than 10%		0

     If holders of the First Preferred Shares (or First Units) lose the entitlement to nominate and elect one or more director(s) of the New Board in accordance with the foregoing, holders of the Class A Restricted Voting Shares shall correspondingly acquire the entitlement to elect additional director(s) such that the number of directors shall always equal eleven (until changed in accordance with the CBCA).

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     Pursuant to the Company’s Articles, the New Board has been divided into two groups: a first group (“Group A”) to consist of six directors appointed to hold office for a stated term expiring at the close of the third annual meeting of shareholders following May 1, 2003 and a second group (“Group B”) to consist of five directors appointed to hold office for a stated term expiring at the close of the second annual meeting of shareholders following May 1, 2003. At the end of their respective initial terms of office, elections of directors shall be for terms of two years each. The table below identifies, in respect of each individual listed therein, whether such individual is part of Group A or Group B.

Name	Group
André Bureau	A
Jim Continenza	B
Christian Dubé	B
Gary Goertz	B
Bob Latham	B
Berl Nadler	B
Paul McFarlane	B
Steven D. Scheiwe	A
Charles Sirois	A
André Tremblay	A
Lorie Waisberg	A

Human Resources Committee

     As at December 31, 2002, the Human Resources Committee of the Old Board was composed of the following individuals: Mr. Martin Fafard, Mr. André Bureau and Mr. Bernard Lamarre. None were officers, employees or former officers of the Company or of its subsidiaries. On June 12, 2003, the Human Resources Committee of the New Board was formed and is now composed of Mr. Charles Sirois, Mr. Lorie Waisberg, Mr. Gary Goertz, Mr. Jim Continenza and Mr. André Bureau.

     The Human Resources Committee is a committee of the board of directors of the Company. It is mandated to review and make recommendations to the board in connection with the appointment and remuneration of senior officers of the Company and of its subsidiaries, including the Chief Executive Officer. In addition, the Human Resources Committee determines the options to be granted under the Stock Option Plan in accordance with the rules adopted by the board. The Company’s relative position in terms of compensation levels is determined annually through studies performed by independent consulting firms using a selected reference market of comparable companies. Internal pay equity studies are a key factor to complete the process and provide necessary adjustments where required.

Audit Committee

     As at December 31, 2002, the Audit Committee was composed of four individuals namely Mr. Daniel Cyr, Mr. Pierre Laurin, Mr. Noël Bambrough and Mr. Graham W. Savage. The Audit Committee oversees the Company’s financial reporting process on behalf of the board of directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements of the Company with Management and with the Auditors. On June 12, 2003, the Audit Committee of the New Board was formed and is now composed of Mr. Paul McFarlane, Mr. Christian Dubé, Mr. Charles Sirois, Mr. Steven D. Scheiwe and Mr. André Bureau.

     The Audit Committee reviewed with the Auditors their judgements as to the quality of the Company’s accounting principles and such other matters as are required to be discussed under generally accepted auditing standards. In addition, the Audit Committee has discussed with the Independent Auditors their independence from Management and the Company, including the matters in the written disclosures required by the independence standards board. The Audit Committee discussed with the Company’s internal and independent Auditors the overall scope and plans for their respective audits. The Audit Committee meets with the internal and

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independent Auditors, with and without Management presence, to discuss the result of their examinations, their evaluations of the Audit Company’s internal controls, and the overall quality of the Company’s financial reporting. In reliance of the reviews and discussions referred to above, the Audit Committee recommended to the Old Board that the Audited Financial Statements be included in the Canadian Annual Report of the Company filed on Form 6-K on May 12, 2003.

Corporate Governance Committee

     The Old Board considered good corporate governance to be important to the effective operations of the Company. The Old Board formed, at its meeting of February 20, 1998, a Corporate Governance Committee. On November 13, 1998, this committee recommended the adoption of a Corporate Governance Policy which conforms with the Guidelines adopted by the TSX (the “TSX Guidelines”). This policy was adopted by the Old Board on December 18, 1998. The Corporate Governance Committee ensured that the Corporate Governance Policy complies with the TSX Guidelines. It approved any material transactions with a related party having a significant impact on the business and affairs of the Company. The Corporate Governance Committee was composed of three unrelated directors: Mr. Daniel Cyr, Mr. Michael Cytrynbaum and Mr. James J. Healy who resigned as a director of Old Microcell in December 2002.

     The New Board will, as part of its responsibilities, establish new corporate governance guidelines for Microcell to ensure sound corporate governance practices for Microcell. On June 12, 2003, the Corporate Governance Committee of the New Board was formed and is now composed of Mr. André Bureau, Mr. Berl Nadler, Mr. Lorie Waisberg, Mr. Robert F. Latham and Mr. Christian Dubé.

EMPLOYEES

     In the previous two years, the Company has reduced its work force by 520 employees. This measure was the result of increased productivity from the consolidation of certain administrative and operating support activities, and of the suspension of certain projects due to the Company’s financial difficulty and difficult financial market conditions. After giving effect to the lay-offs which occurred in December 2002, Microcell had approximately 2,000 employees (expressed as full-time equivalents). Microcell is not party to any collective labor agreements and none of its employees is represented by a union. Microcell believes that it enjoys good relations with its employees. As of December 31, 2001 and 2000, the Company had respectively 2,321 and 2,603 employees.

SHARE OWNERSHIP

     Besides Mr. Charles Sirois, beneficial ownership of 5,665 Class B Non-Voting Shares, 669,128 Warrants 2005 and 1,115,214 Warrants 2008 of the Company (the Warrants representing 16.8% of each respective Warrant series), to the Company’s knowledge, no director or officer beneficially owns more than 1% of each of the Company’s class of securities.

ITEM 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     Prior to May 1, 2003 (the effective date of the Plan), Telesystem Ltd. was the major shareholder of Old Microcell with 72.1% of the votes and 25% of the equity of Old Microcell. T-Mobile USA, Inc. and Capital Communications CDPQ Inc. (“CDPQ”), with respectively 14.6% and 16.6% of the equity of Old Microcell, were the other principal shareholders of Old Microcell.

     The following table and notes thereto set forth certain information regarding ownership of Microcell’s securities outstanding as of May 31, 2003, namely the First Preferred Voting Shares and First Preferred Non-Voting Shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares, and Warrants, for the following persons:

(1)	each person who is known by Microcell to be the beneficial owner of 5% or more of any of our classes of shares or Warrants; and
(2)	all other stakeholders as a group.

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	Expressed as a % of all Outstanding
			First Preferred				Second Preferred
	First Preferred		Non-Voting		Second Preferred		Non-Voting
Name of Beneficial Owner	Voting Shares(1)		Shares(2)		Voting Shares(3)		Shares(4)
Bank of Montreal		36.9		—		60.9		—
Capital Communications CDPQ Inc.(9)		13.9		—		22.9		—
Canadian Imperial Bank of Commerce		9.6		—		16.2		—
York Capital Management, L.P(12)		—		14.4		—		7.1
JP Morgan Chase Bank(10)(12)		—		6.0		—		—
Aspen Partners LP(12)		—		12.8		—		6.3
Harbert Management Corporation(12)		—		—		—		10.3
Kingdon Capital Management(12)		—		—		—		—
Telesystem Ltd.(11)		—		—		—		—
T-Mobile USA Inc(12)		—		—		—		—
Other Holders		39.6		66.8		—		76.3
Total		100.0		100.0		100.0		100.0

[Additional columns below]

[Continued from above table, first column(s) repeated]

	Expressed as a % of all Outstanding
	Class A Restricted		Class B Non-Voting
Name of Beneficial Owner	Voting Shares(5)		Shares(6)		Warrants 2005(7)		Warrants 2008(8)
Bank of Montreal		—		—		—		—
Capital Communications CDPQ Inc.(9)		—		—		12.6		12.6
Canadian Imperial Bank of Commerce		—		—		—		—
York Capital Management, L.P(12)		—		—		—		—
JP Morgan Chase Bank(10)(12)		—		—		—		—
Aspen Partners LP(12)		7.3		7.1		—		—
Harbert Management Corporation(12)		20.3		19.8		6.7		6.7
Kingdon Capital Management(12)		6.9		6.7		—		—
Telesystem Ltd.(11)		—		—		16.7		16.7
T-Mobile USA Inc(12)		—		—		9.8		9.8
Other Holders		65.5		66.4		54.2		54.2
Total		100.0		100.0		100.0		100.0

(1)	Based on a total of 497,461 First Preferred Voting Shares outstanding. The holdings for each named beneficial holder are 183,623 for Bank of Montreal, 47,800 for Canadian Imperial Bank of Commerce and 68,962 for CDPQ.
(2)	Based on a total of 11,221,839 First Preferred Non-Voting Shares outstanding. The holdings for each named beneficial holder are 1,611,732 for York Capital Management, L.P., 673,291 for JP Morgan Chase Bank and 1,432,425 for Aspen Partners LP.
(3)	Based on a total of 92,282 Second Preferred Voting Shares outstanding. The holdings for each named beneficial holder are 56,182 for Bank of Montreal, 15,000 for Canadian Imperial Bank of Commerce and 21,100 for CDPQ.
(4)	Based on a total of 7,093,972 Second Preferred Non-Voting Shares outstanding. The holdings for each named beneficial holder are 500,260 for York Capital Management, 444,646 for Aspen Partners LP and 729,857 for Harbert Management Corporation.
(5)	Based on a total of 30,000 Class A Restricted Voting Shares outstanding. The holdings for each named beneficial holder are 2,183 for Aspen Partners LP, 6,085 for Harbert Management Corporation and 2,070 for Kingdon Capital Management.
(6)	Based on a total of 3,662,630 Class B Non-Voting Shares outstanding. The holdings for each named beneficial holder are 260,345 for Aspen Partners LP, 725,502 for Harbert Management Corporation and 246,757 for Kingdon Capital Management.
(7)	Based on a total of 3,998,302 Warrants 2005. The holdings for each named beneficial holder are 503,924 for CDPQ, 269,484 for Harbert Management Corporation, 669,128 for Telesystem Ltd. and 389,838 for T-Mobile USA Inc.
(8)	Based on a total of 6,663,943 Warrants 2008. The holdings for each named beneficial holder are 839,877 for CDPQ, 449,144 for Harbert Management Corporation, 1,115,214 for Telesystem Ltd. and 649,729 for T-Mobile USA Inc.
(9)	Caisse de dépôt et placement du Québec. Includes securities held by CDPQ and other subsidiaries of the Caisse de dépôt et placement de Québec.
(10)	Represents securities held by JP Morgan Chase Bank and its affiliates.
(11)	Includes securities held by subsidiaries of Telesystem Ltd., ultimately controlled by Charles Sirois.
(12)	To the Company’s knowledge, these persons or entities are residents of the U.S.

     To our knowledge, other than as disclosed in this annual report, the aforementioned beneficial holders did not, as of May 31, 2003, own or exercise control over any of our other securities.

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RELATED PARTY TRANSACTIONS

     From the beginning of its last full fiscal year up to the latest practicable date, the Company has entered into transactions with shareholders and companies under common control, which were not material to the Company or the related party. These transactions were undertaken in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. These transactions consisted primarily of the purchase or sale by the Company of management services and telecommunication services or equipment.

     During all of 2001, Telesystem Ltd. (which owned approximately 72.1% of the voting common shares of Old Microcell owned 50% of Spectra Telecommunications Inc. who provides engineering consulting for the Company. During 2001, these services amounted to $1,684,448. In February 2002, Telesystem Ltd. sold its 50% interest to SNC – Lavalin Inc., the other shareholder of Spectra Telecommunications Inc.

ITEM 8 — FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

     The Company’s consolidated financial statements for the fiscal years ended December 31, 2002, 2001 and 2000 and the auditors’ report signed by Ernst & Young LLP are presented at Item 18 of this report.

DIVIDEND POLICY

     The Company has not paid any dividends since its creation and the Company does not anticipate declaring or paying dividends in the foreseeable future, as it intends to retain future earnings, if any, for reinvestment in its business and repayment of indebtedness. Any future determination to declare or pay dividends will be at the discretion of the board of directors of the Company, will be subject to compliance with the Company’s debt financing arrangements, and will depend upon the Company’s financial condition, results of operations, capital requirements and such other factors as the board of directors of the Company considers relevant. Certain covenants under the terms of the Company’s financing agreements and of its public debt prohibit or limit the ability of the Company to declare or pay dividends.

SIGNIFICANT CHANGES

     The Company completed a capital restructuring on May 1, 2003, which is fully described in note 1 to the consolidated financial statements for the year ended December 31, 2002 presented in Item 18.

ITEM 9 — THE OFFER AND LISTING

MARKETS

Old Microcell’s Class B Non-Voting Shares

     Microcell has been a public company since October 1997. Our old class B non-voting shares were listed for trading on the TSX under the symbol “MTI.B” from October 7, 1997 to April 30, 2003, as well as on The Nasdaq Stock Market Inc. (“Nasdaq”) under the symbol “MICTF” from October 7, 1997 to July 10, 2002 and on the OTC Bulletin Board from July 11, 2002 to April 30, 2003. On May 1, 2003, we completed our recapitalization process, which resulted in a new capital structure being established and, as a result, new securities being issued. Consequently, our old class B non-voting shares represented by the CUSIP number 59501T304 were delisted on April 30, 2003. The following table sets forth, for the years, calendar quarters and months indicated, the range of high and low closing sale prices for the class B non-voting shares as reported on the TSX and the Nasdaq and OTC Bulletin Board.

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	TSX						Nasdaq or OTC Bulletin Board
	Price Range						Price Range
	(Cdn.$)		(Cdn.$)		(000s)		($)		($)		(000s)
	High		Low		Volume		High		Low		Volume
1998		14.00		7.30		20,780		9.625		4.6875		16,430
1999		47.50		9.40		24,080		32.875		6.1875		52,960
2000		77.50		25.45		11,150		54.25		15.75		56,020
2001		38.66		1.34		100,430		25.625		0.82		48,300
2002		3.89		0.055		278,660		2.46		0.032		25,210

	TSX						Nasdaq or OTC Bulletin Board
	Price Range						Price Range
	(Cdn.$)		(Cdn.$)		(000s)		($)		($)		(000s)
	High		Low		Volume		High		Low		Volume
2001
First quarter		38.66		17.60		6,490		25.625		11.125		9,120
Second quarter		17.71		10.50		12,090		11.49		6.77		16,550
Third quarter		14.41		3.24		8,860		9.40		1.96		7,090
Fourth quarter		4.30		1.34		72,990		2.64		0.82		15,540
2002
First quarter		3.89		1.78		37,520		2.46		1.15		6,270
Second quarter		2.00		0.13		88,700		1.21		0.09		11,940
Third quarter		0.25		0.055		62,950		0.15		0.038		3,430
Fourth quarter		0.20		0.06		89,490		0.12		0.032		3,570
2003
First quarter		0.185		0.085		124,180		0.115		0.054		5,451

	TSX						Nasdaq or OTC Bulletin Board
	Price Range						Price Range
	(Cdn.$)		(Cdn.$)		(000s)		($)		($)		(000s)
	High		Low		Volume		High		Low		Volume
November 2002		0.17		0.10		34,770		0.12		0.06		1,300
December 2002		0.125		0.08		26,240		0.075		0.053		1,320
January 2003		0.185		0.125		66,170		0.11		0.075		1,930
February 2003		0.185		0.12		22,050		0.115		0.08		911
March 2003		0.15		0.085		35,960		0.10		0.054		2,610
April 2003		0.14		0.085		26,930		0.09		0.056		2,600

Microcell New Shares & Warrants

     The new shares and Warrants issued by us upon the effective implementation of our recapitalization plan on May 1, 2003 consisted of: First Preferred Voting Shares (represented by the CUSIP number 59501T502), First Preferred Non-Voting Shares (represented by the CUSIP number 59501T601), Second Preferred Voting Shares (represented by the CUSIP number 59501T700), Second Preferred Non-Voting Shares (represented by the CUSIP number 59501T809), Class A Restricted Voting Shares (represented by the CUSIP number 59501T882), and Class B Non-Voting Shares (represented by the CUSIP number 59501T874), as well as the Warrants 2005 (represented by CUSIP number 59501T163) and the Warrants 2008 (represented by CUSIP number 59501T171). The issue price of all the new shares was $15 per share.

     Shareholders, at the close of business on April 30, 2003, received, on May 1, 2003, one new Microcell class B non-voting share in exchange for every 10,630 Old Microcell’s shares, as well as one Warrant 2005 in exchange for every 90 Old Microcell’s shares and one Warrant 2008 in exchange for every 54 Old Microcell shares. Fractional securities were not issued, nor any compensation paid for any such fraction. Where the exchange resulted in less than one new security being otherwise issuable, no new security was issued.

     Each whole Warrant 2005 entitles its holder to purchase either one Class A Restricted Voting Share or one Class B Non-Voting Share at a price of $19.91 until May 1, 2005. Similarly, each whole Warrant 2008 entitles its holder to purchase either one Class A Restricted Voting Share or one Class B Non-Voting Share at a price of $20.69 until May 1, 2008.

     Non-voting shares are exchangeable, at the option of the holder, at any time, into voting shares of the same class upon provision by the holder of a residency declaration in prescribed form to the Company’s transfer agent (Computershare Trust Company of Canada) certifying that the holder is Canadian.

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     The new Microcell shares and Warrants were listed for trading on the TSX on May 1, 2003. There is no comparable listing on any recognized U.S.-based exchange. The following table indicates the trading symbol for each of the new equity-based securities, as well as the total number of shares or Warrants issued and outstanding as of May 31, 2003:

	TSX	Issued and Outstanding
Security	Trading Symbol	May 31, 2003
First Preferred Voting Shares	MT.PR.A		497,461
First Preferred Non-Voting Shares	MT.PR.B		11,221,839
Second Preferred Voting Shares	MT.PR.C		92,282
Second Preferred Non-Voting Shares	MT.PR.D		7,093,972
Class A Restricted Voting Shares	MT.A		30,000
Class B Non-Voting Shares	MT.B		3,662,630
Warrants 2005	MT.WT.A		3,998,302
Warrants 2008	MT.WT.B		6,663,943

     The following table sets forth for the month indicated the range of high and low closing sale prices for each new class of Microcell shares and Warrants as reported on the TSX.

	TSX
	Price Range for May 2003
	(Cdn.$)		(Cdn.$)		(000s)
	High		Low		Volume
First Preferred Voting Shares		11.90		10.02		144
First Preferred Non-Voting Shares		14.01		10.06		670
Second Preferred Voting Shares		10.00		10.00		29
Second Preferred Non-Voting Shares		14.01		9.51		356
Class A Restricted Voting Shares		14.25		9.25		1
Class B Non-Voting Shares		15.00		9.70		576
Warrants 2005		2.00		0.52		561
Warrants 2008		3.00		1.46		1,860

Old Microcell’s Senior Discount Notes

     In June 1996, we issued the 2006 Notes with a nominal value of U.S.$418 million. In October 1997, we issued 11.125% senior discount notes (the “2007 Notes”) with a nominal value of $429 million. In May 1999, we issued 12% senior discount notes (the “2009 Notes”) with a nominal value of U.S.$270 million (the 2006 Notes, the 2007 Notes and the 2009 Notes are referred to collectively as the “Notes”). All the notes were unsecured and were due June 1, 2006, October 15, 2007, and June 1, 2009, respectively, with cash interest payable in arrears semi-annually commencing June 1, 2002, April 15, 2003, and December 1, 2004. Pursuant to the Plan, the Notes were tendered by a nominee for The Depository Trust Company and CDS & Co. (the record holders), and cancelled by us in exchange for equity in Microcell. On May 1, 2003, holders of the Notes received their pro rata distribution (based on the principal or accreted amount of the outstanding unsecured notes plus any accrued interest as of April 30, 2003) of Second Preferred Shares, in an aggregate amount of $54.0 million, and common equity, in an aggregate amount of $54.1 million, as well as their pro rata distribution of 1,329,312 Warrants 2005 and 2,215,521 Warrants 2008, subject to certain conditions. The following table sets forth the conversion rates per $1,000 principal amount at maturity of the Notes into the equity-based securities of Microcell:

	Conversion rate per $1,000 principal amount at maturity
	Second Preferred		Class A Restricted		Class B Non-Voting
	Non-Voting Shares		Voting Shares		Shares		Warrants 2005		Warrants 2008
2006 Notes		3.9710		0.0331		3.9473		1.4662		2.4437
2007 Notes		2.5677		0.0214		2.5524		0.9481		1.5802
2009 Notes		3.1026		0.0259		3.0841		1.1456		1.9093

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ITEM 10 — ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

By-laws

     The General By-laws of the Company do not contain any provisions with respect to directors’ power to vote on a proposed arrangement or contract in which directors are materially interested. The CBCA, the corporate statute governing the Company, imposes certain disclosure obligations upon a director where such director:

(1)	is party to a contract or transaction with the Company;
(2)	is a director or an officer of a party to a contract or transaction with the Company; or
(3)	has a material interest in a party to a contract or transaction with the Company.

     In any such event the director is restricted in voting on any resolution to approve such contract or transaction (subject to statutory exceptions).

     In accordance with the General By-laws of the Company, the remuneration to be paid to directors may be fixed by the board from time to time. Decisions of the board with respect to such matter are subject to general quorum and voting rules governing meetings of directors.

     The General By-laws of the Company provide that the board may from time to time on behalf of the Company, without authorization of the shareholders, exercise borrowing powers. Borrowing powers exercisable by the directors may be varied by way of an amendment to the General By-laws, which amendment must be approved by the shareholders by ordinary resolution.

     The General By-laws do not provide for mandatory retirement of directors based on age.

     The directors need not own shares of the Company to be qualified to act in such capacity.

Share Capital

     The Company’s authorized share capital consists of four classes of shares:

(1)	an unlimited number of First Preferred Shares, issuable as First Preferred Voting Shares, First Preferred Non-Voting Shares, First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares;
(2)	an unlimited number of Second Preferred Shares issuable as Second Preferred Voting Shares, Second Preferred Non-Voting Shares, Second Preferred Voting 2 Shares and Second Preferred Non-Voting 2 Shares;
(3)	an unlimited number of Class A Restricted Voting Shares; and
(4)	an unlimited number of Class B Non-Voting Shares.

First Preferred Shares

     Issue price. First Preferred Voting Shares and First Preferred Non-Voting Shares were issued at $15 per share.

     Rights upon liquidation. Holders of First Preferred Shares are entitled to receive, on the winding-up, liquidation or dissolution of the Company and in priority to any payment or distribution in respect of shares of any other class, an amount per share equal to the FPS Redemption Price (as described below) plus any declared but unpaid dividends.

     Voting. Holders of First Preferred Voting Shares are entitled to receive notice of and to attend and vote at all meetings of the shareholders of the Company (except meetings at which only the holders of another specified class or series of shares (other than the Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be) are entitled to vote separately as a class or series as provided by law or in the Articles of the Company) and each First Preferred Voting Share confers the right to one vote (in person or by proxy) at all such meetings. Holders of First Preferred Voting Shares are also entitled to vote together with the Class A Restricted Voting Shares and, if applicable, the Class B Non-Voting Shares on an “as converted” basis, on any matter on which the Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, are entitled to vote. Except as otherwise provided by law or in the Articles of the Company, holders of First Preferred Non-Voting Shares are not entitled to vote at any meetings of the shareholders of the Company, but otherwise enjoy the same rights, privileges and economic entitlements as are enjoyed by holders of the First Preferred Voting Shares. The holders of First Preferred Non-Voting Shares are entitled to receive notice of and to attend

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meetings of the holders of First Preferred Voting Shares and Class A Restricted Voting Shares. Each First Preferred Non-Voting Share confers the right to one vote (in person or by proxy) at any meeting at which the holders of First Preferred Non-Voting Shares are entitled to vote and is entitled to vote on an “as converted basis” at any meeting at which the Class B Non-Voting Shares, as the case may be, are entitled to vote.

     Non-Cumulative Dividend. The holders of First Preferred Voting Shares and First Preferred Non-Voting Shares are entitled to a fixed, non-cumulative preferential dividend at the rate of 9% per annum, from time to time and payable semi-annually in arrears in cash. All dividends declared on the First Preferred Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one series over the other.

     Maturity. The First Preferred Shares shall be mandatorily redeemed on May 1, 2013.

     First Preferred Shares Redemption Price. The First Preferred Shares Redemption Price is initially the issue price therefor, increased at the beginning of each semi-annual period commencing on November 1, 2003 by (1) an amount equal to the dividend accrued during such period; less (2) the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.

     In the event of any redemption or mandatory conversion of First Preferred Shares other than as at the end of a semi-annual period, the FPS Redemption Price is to be adjusted by adding the accrued dividend on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion, less the amount of any cash dividend that has been declared and paid in respect of such period.

     Redemption. The First Preferred Shares are redeemable as follows:

(1)	in whole or in part at any time at the option of the Company at the then current FPS Redemption Price, payable in cash, provided however that holders of First Preferred Shares may exercise any conversion rights prior to any such redemption;
(2)	at maturity, (a) mandatorily at a price per share equal to the then current FPS Redemption Price payable in cash or (b) at the Company’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares continue to be listed and posted for trading on a recognized exchange, in consideration of the issuance of a number of Class A Restricted Voting Shares or Class B Non-Voting Shares (as the case may be) equal to the FPS Redemption Price divided by the average share price of such shares;
(3)	mandatorily prior to maturity at the then current FPS Redemption Price to the extent that the Company has funds available for such purpose (determined by reference to certain thresholds established in the Articles); and
(4)	at any time prior to maturity, in whole or in part, at the option of the Company upon payment of the then current FPS Redemption Price by issuing First Units comprised of a note and a First Preferred Voting 2 Share or First Preferred Non-Voting 2 Share.

     Intra Class Exchange Rights. The First Preferred Non-Voting Shares are exchangeable, at the option of the holders, into First Preferred Voting Shares on a share-for-share basis, in the following circumstances:

(1)	at any time upon provision by a holder of First Preferred Non-Voting Shares of a residency declaration to the Company and the transfer agent of First Preferred Shares certifying that the holder is a Canadian;
(2)	upon a bid being made for the First Preferred Voting Shares where no equivalent bid is made for the First Preferred Non-Voting Shares for the purposes of allowing the First Preferred Non-Voting Shares to tender to an exclusionary bid;
(3)	automatically upon the repeal or relaxation of the Canadian rules restricting the Company’s ownership and control, but only to the extent of such repeal or relaxation and non-Canadian ownership and control of the Company and its subsidiaries not otherwise being restricted by law.

     The First Preferred Voting Shares are exchangeable, at the option of the holders, into First Preferred Non-Voting Shares on a share-for-share basis.

     Conversion Features. The First Preferred Shares have the following conversion features:

(1)	at any time, the First Preferred Voting Shares and the First Preferred Non-Voting Shares are convertible, at the option of the holders into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis;
(2)	if at any time prior to May 1, 2008, the Company shall complete an offering of Class A Restricted Voting Shares or Class B Non-Voting Shares for gross proceeds of not less than $150 million and at a per share price equal to or

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greater than 200% of the then current FPS Redemption Price and the proceeds thereof are used as provided in the Articles, the First Preferred Voting Shares and the First Preferred Non-Voting Shares which remain outstanding after the application of such proceeds will be converted, at the option of the Company, into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis; and

(3)

if at any time on or after May 1, 2008, on the 25th day (or if such day is not a trading day, then on the next following trading day) following the release by the Company of its quarterly or annual financial statements, as the case may be, the First Preferred Voting Shares and the First Preferred Non-Voting Shares are In-the-Money (namely that the FPS Redemption Price is less than the average share price of the Class A Restricted Voting Shares and Class B Non-Voting Shares), they will be converted automatically into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis.

     Upon conversion of any First Preferred Voting Shares or First Preferred Non-Voting Shares into Class A Restricted Voting Shares or Class B Non-Voting Shares, the holders of such First Preferred Voting Shares or First Preferred Non-Voting Shares will have no right to receive any payment in cash on account of the FPS Redemption Price.

     All conversion rights described above are subject to a registration statement having been filed by the Company and having become effective under the United States Securities Act of 1933 (the “1933 Act”) or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting from the exercise of such conversion right. If such exemption is not available, the Company will file, on a date not earlier than six months and not later than seven months after May 1, 2003, a registration statement with the SEC in respect of shares to be issued upon the exercise of conversion rights and will use reasonable commercial efforts to have such commission declare such registration statement effective.

     Anti-layering provisions. The Articles of the Company provide that, so long as there remain outstanding First Preferred Shares (or First Units, if issued) representing in the aggregate an initial issue price in excess of $75 million, the approval: (1) by written resolution signed by the holders of a majority of the aggregate number (or principal amount, as the case may be) of First Preferred Shares (or First Units, if issued) then outstanding or (2) by a majority of the holders of First Preferred Shares (or First Units, if issued) then outstanding represented in person or by proxy at a meeting of such holders called for such purpose, will be required before the Company and its subsidiaries either (X) issue any shares ranking prior to or pari passu with the First Preferred Shares (or First Units, if issued) or (Y) incur funded debt (other than permitted debt under the Company’s credit facilities, First Units and Second Units), as a result of which the aggregate consolidated funded debt thereof would be in excess of 4.0 times consolidated annual EBITDA, calculated on a pro forma basis based upon the four consecutive quarters ended as at the fiscal quarter-end immediately prior to the date of the resolution of the board of the Company approving such issuance or incurrence, as the case may be.

     Foreign Ownership Restrictions. The First Preferred Shares shall be subject to sale in a manner that will ensure compliance with the Canadian rules governing the ownership and control of the Company, for so long as same remain in effect.

Second Preferred Shares

     Issue price. Second Preferred Voting Shares and Second Preferred Non-Voting Shares were issued at $15 per share.

     Rights upon liquidation. Holders of Second Preferred Shares are entitled to receive, on the winding-up, liquidation or dissolution of the Company and in priority to any payment or distribution in respect of shares of any other class, other than the First Preferred Shares, an amount per share equal to the Second Preferred Shares Redemption Price (as described below) plus any declared but unpaid dividends.

     Voting. Holders of Second Preferred Voting Shares are entitled to receive notice of and to attend and vote at all meetings of the shareholders of the Company (except meetings at which the holders of another specified class or series of shares (other than the Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be) are entitled to vote separately as a class or series as provided by law or in the Articles of the Company) and each Second Preferred Voting Share confers the right to one vote (in person or by proxy) at all such meetings. Holders of Second Preferred Voting Shares are also entitled to vote together with the Class A Restricted Voting Shares and, if applicable, the Class B Non-Voting Shares on an “as converted” basis on any matter on which the Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, are entitled to vote. Except as otherwise provided in the CBCA or in the Articles of the Company, holders of Second Preferred Non-Voting Shares are not entitled to vote at any meetings of the shareholders of the Company, but otherwise enjoy the same rights, privileges and economic entitlements as are enjoyed by holders of the Second Preferred Voting Shares. The holders of Second Preferred Non-Voting Shares are entitled to receive notice of and to attend meetings of the holders of Second Preferred Voting Shares and Class A Restricted Voting Shares. Each Second Preferred Non-Voting Share confers the right to one vote (in person or by proxy) at any meeting at which the holders of Second Preferred Non-Voting Shares are entitled to vote and shall be entitled to vote on an “as converted basis” at any meeting at which the Class B Non-Voting Shares, as the case may be, are entitled to vote.

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     Non-Cumulative Dividend. The holders of Second Preferred Voting Shares and Second Preferred Non-Voting Shares are entitled to a fixed, non-cumulative preferential dividend at the rate of 9% per annum, from time to time and payable semi-annually in arrears in cash. All dividends declared on the Second Preferred Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one series over the other, but subject to the prior declaration and payment (or setting apart for payment) of dividends on the First Preferred Shares in respect of the corresponding period.

     Maturity. The Second Preferred Shares shall be mandatorily redeemed on May 1, 2013.

     Second Preferred Shares Redemption Price. The redemption price of each Second Preferred Share is initially the issue price therefor, increased at the beginning of each semi-annual period beginning on November 1, 2003 by (1) an amount equal to divided accrued during such period; less (2) the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.

     In the event of any redemption or conversion other than as at the end of a semi-annual period, the SPS Redemption Price is to be adjusted by adding the accrued dividend on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion, less the amount of any cash dividend that has been declared and paid in respect of such period. (“SPS Redemption Price”)

     Redemption. The Second Preferred Shares are redeemable as follows:

(1)	Subject to the prior redemption for cash of all First Preferred Shares (except for any First Preferred Shares which have been voluntarily redeemed or converted for shares by the holder thereof), in whole or in part at any time at the option of the Company at the then current SPS Redemption Price, payable in cash, provided however that holders of Second Preferred Shares may exercise any conversion rights prior to any such redemption;
(2)	at maturity, (a) mandatorily at a price per share equal to the then current SPS Redemption Price payable in cash, subject to the prior redemption for cash of all First Preferred Shares (except for any First Preferred Shares which have been voluntarily redeemed or converted for shares by the holder thereof) or (b) at the Company’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares continue to be listed and posted for trading on a recognized exchange, in consideration of the issuance of a number of Class A Restricted Voting Shares or Class B Non-Voting Shares (as the case may be) equal to the SPS Redemption Price divided by the average share price of such shares;
(3)	mandatorily prior to maturity at the then current SPS Redemption Price to the extent that the Company has remaining funds available for such purpose (determined by reference to certain thresholds established in the Articles), subject to the prior redemption for cash of all outstanding First Preferred Shares; and
(4)	at any time prior to maturity, in whole or in part, at the option of the Company upon payment of the then current SPS Redemption Price by issuing Second Units composed of a note and a Second Preferred Voting 2 Share or Second Preferred Non-Voting 2 Share.

     Intra Class Exchange Rights. The Second Preferred Non-Voting Shares are exchangeable, at the option of the holders, into Second Preferred Voting Shares on a share-for-share basis, in the following circumstances:

(1)	at any time upon provision by a holder of Second Preferred Non-Voting Shares of a residency declaration to the Company and the transfer agent of Second Preferred Shares certifying that the holder is a Canadian;
(2)	upon a bid being made for the Second Preferred Voting Shares where no equivalent bid is made for the Second Preferred Non-Voting Shares, for the purposes of allowing the Second Preferred Non-Voting Shares to tender to an exclusionary bid; and
(3)	automatically upon the repeal or relaxation of the Canadian rules restricting the Company’s ownership and control, but only to the extent of such repeal or relaxation and non-Canadian ownership and control of the Company and its subsidiaries not otherwise being restricted by law.

     The Second Preferred Voting Shares will at any time be exchangeable, at the option of the holders, into Second Preferred Non-Voting Shares on a share-for-share basis.

     Conversion Features. The Second Preferred Shares have the following conversion features:

(1)	at any time, the Second Preferred Voting Shares and the Second Preferred Non-Voting Shares are convertible, at the option of the holders, into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis;
(2)	if at any time prior to May 1, 2008, the Company shall complete an offering of Class A Restricted Voting Shares or Class B Non-Voting Shares for gross proceeds of not less than $150 million and at a per share price equal to or

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greater than 200% of the then current SPS Redemption Price and the proceeds thereof are used as provided in the Articles, the Second Preferred Voting Shares and the Second Preferred Non-Voting Shares which remain outstanding after the application of such proceeds will be converted, at the option of the Company, into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis; and

(3)

if at any time on or after May 1, 2008, on the 25th day (or if such is not a trading day, then on the next following trading day) following the release of the Company’s quarterly or annual financial statements, as the case may be, the Second Preferred Voting Shares and the Second Preferred Non-Voting Shares are In-the-Money (namely that the SPS Redemption Price is less than the average share price of the Class A Restricted Voting Shares and Class B Non-Voting Shares), they will be converted automatically into Class A Restricted Voting Shares and Class B Non-Voting Shares respectively on a share-for-share basis.

     Upon conversion of any Second Preferred Voting Shares or Second Preferred Non-Voting Shares into Class A Restricted Voting Shares or Class B Non-Voting Shares, the holders of such Second Preferred Voting Shares or Second Preferred Non-Voting Shares will have no right to receive any payment in cash on account of the SPS Redemption Price.

     All conversion rights described above are subject to a registration statement having been filed by the Company and having become effective under the 1933 Act or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting from the exercise of such conversion right. If such exemption is not available, the Company will file, on a date not earlier than six months and not later than seven months after the Effective Date (i.e. by the end of November 2003), a registration statement with the SEC in respect of shares to be issued upon the exercise of conversion rights and will use reasonable commercial efforts to have such commission declare such registration statement effective.

     Anti-Layering Provisions. The Articles of the Company provide that, so long as there remain outstanding Second Preferred Shares (or Second Units, if issued) representing in the aggregate an initial issue price in excess of $50 million, the approval: (1) by written resolution signed by the holders of a majority of the aggregate number (or principal amount, as the case may be) of Second Preferred Shares (or Second Units, if issued) then outstanding or (2) by a majority of the holders of Second Preferred Shares (or Second Units, if issued) represented in person or by proxy at a meeting of such holders called for such purposes will be required before the Company and its subsidiaries either (X) issue any shares ranking prior to or pari passu with the Second Preferred Shares (or Second Units, if issued) (other than First Preferred Shares issued on May 1, 2003), or (Y) incur funded debt (other than permitted debt under the Company’s credit facilities, First Units and Second Units), as a result of which the aggregate consolidated funded debt thereof would be in excess of 4.0 times consolidated annual EBITDA, calculated on a pro forma basis based upon the four consecutive quarters ended as at the fiscal quarter-end immediately prior to the date of the resolution of the board of the Company approving such issuance or incurrence, as the case may be.

Class A Restricted Voting Shares

     Voting. Holders of Class A Restricted Voting Shares are entitled to receive notice of and to attend and vote at all meetings of the shareholders of the Company (except meetings at which only the holders of another specified class or series are entitled to vote separately as a class as provided in the CBCA or in the Articles of the Company) and each Class A Voting Share confers the right to one vote (in person or by proxy) at all such meetings.

     Except as to voting the Class A Restricted Voting Shares will have equal rights to the Class B Non-Voting Shares on a share-for-share basis.

     Dividends. All dividends declared on the Class A Restricted Voting Shares and the Class B Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one class over the other.

     Rights upon liquidation. Holders of Class A Restricted Voting Shares are entitled to receive the remaining assets of the Company on the winding up, liquidation or dissolution of the Company, pari passu with the holders of Class B Non-Voting Shares, on a per share basis.

     Foreign Ownership Restrictions. The Class A Restricted Voting Shares are subject to sale in a manner that will ensure compliance with the Canadian rules relating to the Company’s ownership and control, for so long as same remain in effect. For more information on these rules, readers are referred to the description of these rules under the heading “Foreign Ownership Restrictions” below.

Class B Non-Voting Shares

     Voting. Except as otherwise provided by law or in the Articles of the Company, holders of Class B Non-Voting Shares are not entitled to vote at any meetings of the shareholders of the Company, but otherwise enjoy the same rights, privileges and economic

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entitlements as are enjoyed by holders of the Class A Restricted Voting Shares. The holders of Class B Non-Voting Shares are entitled to receive notice of and to attend meetings of the holders of Class A Restricted Voting Shares. Each Class B Non-Voting Share confers the right to one vote (in person or by proxy) at any meeting at which the holders of Class B Non-Voting Shares are entitled to vote.

     Dividends. All dividends declared on the Class A Restricted Voting Shares and the Class B Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one class over the other.

     Rights upon liquidation. Holders of Class B Non-Voting Shares are entitled to receive the remaining assets of the Company on the winding up, liquidation or dissolution of the Company, pari passu with the holders of Class A Restricted Voting Shares, on a per share basis.

     Exchange Right. The Class B Non-Voting Shares are exchangeable, at the option of the holders, into Class A Restricted Voting Shares on a share-for-share basis, in the following circumstances:

(1)	any time upon provision by a holder of Class B Non-Voting Shares of a residency declaration to the Company and the transfer agent of the Class A Restricted Voting Shares certifying that the holder is a Canadian;
(2)	upon a bid being made for the Class A Restricted Voting Shares where no equivalent bid is made for the Class B Non-Voting Shares, for the purposes of allowing the Class B Non-Voting Shares to tender to an exclusionary bid; and
(3)	automatically upon the repeal or relaxation of the Canadian rules governing the Company’s ownership and control, but only to the extent of such repeal or relaxation and non-Canadian ownership and control of the Company and its subsidiaries not otherwise being restricted by law.

Warrants

     The Company issued on May 1, 2003 two series of Warrants entitling holders thereof to purchase Class A Restricted Voting Shares or Class B Non-Voting Shares (based on Canadian residency status) being the Warrants 2005 (having a two-year term and an exercise price per share of $19.91) and Warrants 2008 (having a five-year term and an exercise price per share of $20.69).

     The indentures relating to the Warrants provide that in the event of certain fundamental transactions, (1) the holders of Warrants shall, upon exercise of the Warrants following any such fundamental transactions, be entitled to receive the same number and kind of securities, cash or other property that they would have been entitled to receive had they exercised their Warrants prior to any such fundamental transactions; (2) where the consideration payable to holders of equity shares of the Company is payable solely in cash, the holders of Warrants are required to surrender or exercise their Warrants and are entitled to receive, upon surrender or exercise thereof, payments on an equal basis with holders of such shares as if the Warrants had been exercised immediately prior to such fundamental transactions, less the exercise price thereof, and upon receipt of such payment, if any, the rights of a holder of such Warrant shall terminate and cease and such holder’s Warrants shall expire (for greater certainty, in all cases without regard to whether or not the holders have exercised their Warrants); and (3) where applicable, the successor corporation to the Company (if applicable) shall expressly assume the performance of the Company covenants and conditions under the indentures relating to the Warrants.

     No Warrants may be exercised until the date that a registration statement filed by the Company under the U.S. Securities Act with respect to the exercise of Warrants has been declared effective by the SEC. The Company has agreed to file, on a date not earlier than six months and not later than seven months from May 1, 2003, a registration statement with the SEC in respect of the shares issuable upon exercise of the Warrants and will use reasonable commercial efforts to have such commission declare such registration statement effective.

Description of Units

First Unit and Second Unit

     The First Preferred Voting Shares and First Preferred Non-Voting Shares are redeemable at any time prior to maturity at the option of the Company in consideration of the issuance of First Units (Voting and Non-Voting series). The Second Preferred Voting Shares and Second Preferred Non-Voting Shares are redeemable at any time prior to maturity by the Company in consideration of the issuance of Second Units (Voting and Non-Voting series).

     The First Units and Second Units are hybrid instruments designed to duplicate the economic interest and other features (including as to voting entitlements) attaching to the First Preferred Shares and Second Preferred Shares. Each Unit is composed of a note, which provides the holder of the Unit with an economic interest similar to that of a holder of First Preferred Share, together with

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a First Preferred Voting 2 Share or First Preferred Non-Voting 2 Share (in the case of First Units) or with a Second Preferred Voting 2 Share or Second Preferred Non-Voting 2 Share (in the case of Second Units).

     The First Units are senior in right of payment to the Second Units.

     The Company has entered into two Unit Indentures, respectively in respect of First Units and Second Units, which provide for similar redemption and conversion features attaching to the Units as those attaching to the First Preferred Shares and Second Preferred Shares under the Articles. The indentures relating to the Units also provide for certain adjustment mechanisms in the event of fundamental transactions, as well as provisions customarily found in indentures governing issuances of notes.

     No Units may be converted into Class A Restricted Voting Shares or Class B Non-Voting Shares until the date that a registration statement filed by the Company under the U.S. Securities Act has been declared effective by the SEC.

Meetings of Shareholders

     Subject to the provisions of the CBCA and the Articles of the Company, an annual meeting of the shareholders of the Company will be held on such date in each year, at such time and place as the New Board may determine, to receive and consider the financial statements with the report of the auditor or auditors, to elect directors, to appoint an auditor or auditors and to fix or to authorize the New Board to fix the auditors’ remuneration and to consider, deal with and dispose of such other business as may properly come before a meeting of shareholders.

     Special meetings of the shareholders may be called at any time by resolution of the New Board or by the president or the chairman of the New Board and shall be called when required by the shareholders in conformity with the CBCA.

     Any person entitled to attend a meeting of shareholders may participate in the meeting, to the extent and in the manner permitted by law, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the Company makes available such a communication facility.

     Notice of each annual meeting and of each special meeting of the shareholders is given in the manner provided in the By-laws of the Company to the shareholders entitled to vote thereat, to the shareholders entitled to receive such notice, to the directors and to the auditor or auditors at their respective addresses as they appear in the records of the Company.

     The quorum of shareholders at an annual or special meeting of shareholders is fixed at five shareholders entitled to vote at such meeting, present in person or represented either by proxy or by an individual acting on behalf of a body corporate or association and duly authorized by a resolution of the board or governing body of the body corporate or association to represent it at meetings of shareholders of the Company, irrespective of the number of shares held by such shareholders. If a quorum is present at the opening of the meeting, the shareholders present or represented may proceed with the business of the meeting, notwithstanding the fact that a quorum is not present throughout the meeting.

     Every question submitted to any meeting of shareholders shall be decided by a show of hands unless a ballot is ordered or required in the manner hereinafter set out. The chairman of such meeting may, in his discretion, order a ballot. Moreover, any shareholder or its representative, where the shareholder is a body corporate or an association, or his proxyholder, either before or after any vote by show of hands, may require a ballot on any question at any time before the termination of the meeting. A demand for a ballot may be withdrawn.

     At all meetings of shareholders, every shareholder entitled to vote thereat, whether present in person or by proxyholder, or, in the case of a body corporate or association by a duly authorized representative, shall be entitled to exercise the number of votes per share as is prescribed in the Articles of the Company; however, if by virtue of the CBCA another scale of voting rights is fixed with respect to a particular matter or to another class of shares, such scale of voting shall be adopted.

Foreign Ownership Restrictions

     Solutions and Inukshuk are required, as radiocommunication carriers and by the conditions of their respective licenses, to comply with the Canadian Ownership and Control Provisions. The Canadian Ownership and Control Provisions must also be respected by Solutions and Inukshuk to maintain their eligibility to operate as Canadian carriers under the Telecommunications Act and to hold and have renewed the PCS License and MCS Licenses.

     The Canadian Ownership and Control Provisions require Solutions and Inukshuk to be “Canadian-owned and controlled” corporations incorporated or continued under the laws of Canada or a province of Canada. Solutions and Inukshuk are deemed to be “Canadian-owned and controlled” as long as: (1) not less than 80% of the members of their respective boards of directors are

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individual Canadians; (2) Canadians beneficially own not less than 80% of their respective issued and outstanding voting shares; and (3) they are not otherwise controlled in fact by non-Canadians.

     A “Canadian” is defined to include a Canadian citizen who is ordinarily resident in Canada, a permanent resident of Canada, various Canadian government agencies, various qualified trusts, mutual insurance companies, and corporations in which Canadians beneficially own and control in the aggregate not less than 66 2/3% of the issued and outstanding voting shares and which are not otherwise controlled in fact by non-Canadians.

     In the case of Microcell, as the ultimate parent corporation of both Solutions and Inukshuk, the Canadian Ownership and Control Provisions require, for Solutions and Inukshuk to be considered eligible thereunder, that not less than 66 2/3% of the issued and outstanding voting shares of Microcell be owned by Canadians, and that Microcell not otherwise be controlled in fact by non-Canadians. A “voting share” for purposes of the Telecommunications Act means a share or class of shares of a corporation carrying voting rights under all circumstances or by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled and includes a security that is convertible into such a share at the time that a calculation referred to in that clause is made.

     Microcell may restrict the issue, transfer and ownership of shares, if necessary, to ensure that Microcell remains in conformity with the Canadian Ownership and Control Provisions. For such purposes, in particular but without limitation, Microcell may, in accordance with the provisions of the Canadian Ownership and Control Provisions, to the extent applicable: (1) refuse to accept any subscription for any voting shares; (2) refuse to allow any transfer of voting shares to be recorded in Microcell’s share register; (3) suspend the rights of a holder of voting shares to vote at a meeting of the shareholders of Microcell; and (4) sell, repurchase or redeem any voting shares.

     Microcell’s Articles of Incorporation provide that Microcell may, in connection with the issue, or transfer of ownership, of voting shares in its capital, take any action, or refuse to take any action, as the case may be, to the extent necessary to ensure that any subsidiary of Microcell is and continues to be eligible to operate as a Canadian carrier under the Telecommunications Act or to be issued, to hold and to renew radio authorizations or radio licenses under the Radiocommunication Act, if and only to the extent that the business activities of such subsidiary require such eligibility.

     Microcell, Solutions and Inukshuk may not be otherwise controlled by non-Canadians. In other words, a non-Canadian cannot exercise control in fact over these companies.

     Failure by Microcell to comply with the requirements relating to the Canadian Ownership and Control Provisions may affect the ability of Solutions and Inukshuk to operate as Canadian carriers and to hold and have renewed the PCS License and the MCS Licenses.

Corporate Stability Provisions

     The Articles of the Company provide that, until May 1, 2005 (except if varied or waived by a special resolution of holders of all voting and non-voting shares (and all units comprised of Notes and Preferred Shares, if issued, voting on an “as converted basis”), voting as a single class, of the Company adopted by a 66 2/3% majority thereof represented and voting in person or by proxy at a meeting called for such purpose and, for greater certainty, at which the voting limitations provided for herein shall be applicable), no person or company, acting alone or acting jointly or in concert with any other person or company with respect to the acquisition, disposition or voting of securities of the Company, shall be permitted to exercise on any resolution submitted to a vote of holders of securities, voting rights representing in excess of 20% of the aggregate voting rights exercisable with respect to the particular resolution. Such restriction do not apply to any person or company that makes an offer to acquire all the preferred and common shares (and units comprised of notes and preferred shares, if any are issued) of the Company and acquires such number of such securities so as to hold thereafter at least 66 2/3% of the equity securities of the Company on a fully diluted basis.

Shareholder Rights Plan

     This is a summary of the Company’s Rights Plan only; reference should be made to the Rights Plan itself attached to this annual report, in particular to defined terms used herein, for details.

     The objective of the Rights Plan is to ensure, to the extent possible, that all shareholders of the Company will be treated equally and fairly in connection with any take-over offer for the Company.

     The Rights Plan is designed to prevent the use of coercive and/or abusive takeover techniques and to encourage any potential acquiror to negotiate directly with the New Board for the benefit of all shareholders of the Company. In addition, the Rights Plan is intended to provide increased assurance that a potential acquiror would pay an appropriate control premium in connection with any acquisition of the Company.

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     The Rights Plan utilizes the mechanism of a Permitted Bid (as described therein) to attempt to ensure that a person seeking to acquire beneficial ownership of 10% or more of the shares (and units if issued) of the Company (treated for such purposes as though they were a single class and on a fully diluted basis, assuming full conversion but without giving effect to management and employee options and exercise of Warrants), gives shareholders and the New Board sufficient time to evaluate the transaction, negotiate with the proposed acquiror, encourage competing bids to emerge, and ensure that all alternatives to the transaction designed to maximize shareholder value have been considered.

     The Rights Plan will provide the New Board with time to review any unsolicited take-over bid that may be made and to take action, if appropriate, to enhance shareholder value. The Rights Plan attempts to protect shareholders by requiring all potential bidders to comply with the conditions specified in the Permitted Bid provisions, failing which such bidders are subject to the dilutive features of the Rights Plan. By creating the potential for substantial dilution of a bidder’s position, the Rights Plan encourages an offeror to proceed by way of a Permitted Bid or to approach the New Board with a view to a negotiation.

     Pursuant to the Rights Plan, one Right has been issued in respect of each share issued on May 1, 2003. In addition, one Right will be issued for each additional share (or unit) issued thereafter. Each Right initially entitles the registered holder thereof to purchase from the Company one Class A Restricted Voting Share or one Class B Non-Voting Share, as the case may be, at a price of $100, subject to certain anti-dilution adjustments. The Rights are not exercisable until the Separation Time (as defined in the Rights Plan).

Trading and Exercise of Rights

     Until the Separation Time, the Rights trade together with the shares (or units, if issued). After the Separation Time, the Rights are exercisable, and are transferable separately from the shares (or units, if issued).

Flip-In Event

     The acquisition by a person making an unsolicited take-over bid for Microcell (the “Acquiring Person”), including others acting jointly or in concert, of beneficial ownership of 10% of the shares (or units, if issued) (treated for such purposes as though they were a single class and on a fully diluted basis assuming full conversion but without giving effect to management and employee options and exercise of the Warrants), other than by way of a Permitted Bid is referred to as a “Flip-In Event”. Any Rights beneficially owned by an Acquiring Person upon the occurrence of any Flip-In Event will be void, as will any Rights beneficially owned by associates, affiliates or Persons acting jointly or in concert with an Acquiring Person, and transferees thereof. After the occurrence of a Flip-In Event, each Right (other than those that are void) will permit the holder to purchase from the Company Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, with a total market value on the date of occurrence of the Flip-In Event equal to twice the exercise price for an amount in cash equal to the exercise price.

Permitted Bid Requirements

     The requirements of a Permitted Bid include the following:

(a)	the take-over bid must be made by way of a take-over bid circular;
(b)	the take-over bid must be made to all registered holders of all outstanding shares (and units, if issued) (other than shares (and units, if issued) held by the offeror or any associate or affiliate of the offeror);
(c)	the take-over bid must contain, and the take-up and payment for securities tendered or deposited thereunder is subject to, irrevocable and unqualified conditions that (1) no new instruments shall be taken up or paid for pursuant to the take-over bid prior to the close of business on the date which is not less than 60 days following the date of the take-over bid and (2) no shares (and units, if issued) shall be taken up or paid for pursuant to the take-over bid unless, at the date referred to in (1) above, more than 50% of the aggregate outstanding shares (and units, if issued) held by “independent shareholders” shall have been deposited or tendered pursuant to the take-over bid and not withdrawn;
(d)	the take-over bid must contain an irrevocable and unqualified provision that, unless the take-over bid is withdrawn, shares (and units, if issued) may be deposited pursuant to such take-over bid at any time prior to the close of business on the date of first take-up or payment for shares (and units, if issued) and that any shares (and units, if issued) deposited pursuant to the take-over bid may be withdrawn until taken up and paid for; and
(e)	the take-over bid must contain an irrevocable and unqualified provision that if, on the date on which shares (and units, if issued) may be taken up or paid for, more than 50% of the aggregate outstanding shares (and units, if issued) held by “independent shareholders” shall have been deposited or tendered pursuant to the take-over bid and not withdrawn, the offeror will make a public announcement of that fact and the take-over bid will remain open for deposits and tenders of shares (and units, if issued) for not less than ten business days from the date of such public announcement.

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     The usual provisions regarding “permitted lock-up agreements” are included in the Rights Plan.

     The Rights Plan allows a Competing Bid to be made while a Permitted Bid is in existence. A Competing Bid must satisfy all the requirements of a Permitted Bid.

MATERIAL CONTRACTS

     The following is a list of each material contract, other than contracts in the ordinary course of business, to which the Company is party, for the two years preceding the publication of this document:

1.	First Unit Indenture made as of May 30, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada as trustee, providing for the issuance of first units, consisting of a first note and First Preferred 2 Share.
2.	Second Unit Indenture made as of May 30, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada as trustee, providing for the issuance of second units, consisting of a second note and Second Preferred 2 Share.
3.	Warrant Indenture for the Warrants 2005 dated as of May 1, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Trustee, providing for the issuance of a 2-year warrants entitling the holders thereof to subscribe, until May 1, 2005 for Class A Restricted Voting Shares or Class B Non-Voting Shares of the Company, as the case may be, at an exercise price of $19.91 per share.
4.	Warrant Indenture for the Warrants 2008 dated as of May 1, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Trustee, providing for the issuance of a 5-year warrants entitling the holders thereof to subscribe, until May 1, 2008 for Class A Restricted Voting Shares or Class B Non-Voting Shares of the Company, as the case may be, at an exercise price of $20.69 per share.
5.	Shareholder Rights Plan Agreement dated as of May 1, 2003 between Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Rights Agent, to ensure, to the extent possible, that all shareholders of the Company will be treated equally and fairly in connection with any take-over offer for the Company.
6.	Tranche A Exit Facility Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent, Collateral Agent and Issuing Bank, providing for a credit facility of $25 million, which may be increased up to $75 million, established in favor of Solutions.
7.	Tranche B Credit Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto, as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent and Collateral Agent, providing for a term loan to Solutions of Cdn.$300,000,000, consisting of a Cdn. dollar series in the amount of Cdn.$100,000,000 and a U.S. dollar series in the amount of the U.S. dollar equivalent of Cdn.$200,000,000.
8.	Tranche C Credit Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent and Collateral Agent, providing for a term loan to Solutions in the aggregate amount of $50,000,000.
9.	Intercreditor and Collateral Agency Agreement, dated as of May 1, 2003, made among Microcell Solutions Inc., as borrower, Microcell Telecommunications Inc., as guarantor, each of the persons listed on the execution pages thereto under the “Tranche A Lenders” heading, each of the persons listed on the execution pages thereto under the “Tranche B Lenders” heading, each of the persons listed on the execution pages thereto under the “Tranche C Lenders” heading, JP Morgan Chase Bank, Toronto Branch, as administrative agent under the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement, JP Morgan Chase Bank, Toronto Branch, as collateral agent for each of the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders and as fondé de pouvoir pursuant to the terms of the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit

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	Agreement, Computershare Trust Company Of Canada, as Trustee for the holders of the First Units, and Computershare Trust Company Of Canada, as Trustee for the holders of the Second Units.
10.	Lease dated as of August 1, 1998, as amended from time to time, among Microcell Telecommunications Inc. and WPBI Property Management Inc. for the lease of approximately 300,000 square feet of office and switchroom space at 800 de La Gauchetière Street West in Montreal, Quebec.

EXCHANGE CONTROLS

     There are currently no laws, decrees, regulations or other legislation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to non-resident holders of the Company’s securities, other than withholding tax requirements.

     There is no limitation imposed by Canadian law or by the Articles of Incorporation or other charter documents of the Company on the right of a non-resident to hold voting shares of the Company, other than as provided by the Canadian Ownership and Control Provisions, the Investment Canada Act, as amended (the “Act”), as amended by the North American Free Trade Agreement (NAFTA) Implementation Act (Canada), and the World Trade Organization (WTO) Agreement Implementation Act. The Act requires notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a “non-Canadian” of “control of a Canadian business,” all as defined in the Act. Generally, the threshold for review will be higher in monetary terms for a member of the WTO or NAFTA.

TAXATION

Certain Canadian Federal Income Tax Considerations

     The following is a summary of certain Canadian federal income tax considerations relating to an investment in either: (1) First Preferred Shares and Second Preferred Shares; (2) Class A Restricted Voting Shares and Class B Non-Voting Shares; (3) First Notes and Second Notes and (4) Warrants (together, also referred to as the Securities or the Microcell Securities).

     The summary is only applicable to a holder of Microcell Securities who, for the purposes of the Income Tax Act (Canada) (also referred to as ITA) and the Canada-United States Income Tax Convention (also referred to as the Convention), is a resident of the United States and is not resident in Canada, deals at arm’s length with Microcell and is not affiliated with Microcell and holds its Securities as capital property (also referred to as the U.S. Holder). For this purpose, related persons are deemed not to deal with each other at arm’s length. A person and a corporation are related if the person controls the corporation or is a member of a related group that controls the corporation. It is a question of facts whether persons not related to each other are dealing with each other at arm’s length. The Securities will generally be considered to be capital property for this purpose to a U.S. Holder unless either the U.S. Holder holds such securities in the course of carrying on a business, or the U.S. Holder has acquired such securities in a transaction or transactions considered to be an adventure in the nature of trade.

     This summary is not applicable to a U.S. Holder that is a financial institution (as defined in the ITA) for purposes of the mark-to-market rules. In addition, this discussion does not apply to an insurer or an authorized foreign bank, who carries on an insurance business or a bank business in Canada and elsewhere.

     This summary is based upon the current provisions of the ITA and counsel’s understanding of the current published administrative practices and policies of the Canada customs and revenue agency (“CCRA”). It also takes into account all specific proposals to amend the ITA publicly announced by or on behalf of the Canadian Minister of Finance prior to the date of this Circular (the “Tax Proposals”), and assumes that all such Tax Proposals will be enacted. This summary does not otherwise take into account or anticipate any changes in law, whether by way of legislative, judicial or administrative action or interpretation, nor does it address any provincial, territorial or foreign tax considerations. No assurance can be given that the Tax Proposals will be enacted in the form proposed or at all.

     This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular U.S. Holder. Consequently, U.S. Holders are urged to consult their own tax advisors for advice as to the tax considerations in respect of holding Microcell Securities having regard to their particular circumstances.

     All amounts, including the cost of interest or dividends received and accrued on, and proceeds of disposition from the First Preferred Shares and Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares, First Notes and Second Notes and Warrants must be determined in Canadian dollars at applicable exchange rates for the purposes of the ITA. The amount of interest and any capital gain or capital loss of a U.S. Holder may be affected by fluctuations in Canadian dollar exchange rates.

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Holding and Disposition of First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares.

     Dividends paid or deemed paid by Microcell to a U.S. Holder on its First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares will be subject to a Canadian withholding tax in the amount of 25%. Such withholding tax may be reduced by virtue of the provisions of any income tax treaty or convention. Under the Convention, the rate of withholding tax in respect of dividends or deemed dividends beneficially owned by a resident of the United States is generally reduced to 15%. Moreover, under the Convention, dividends paid to certain religious, scientific, literary, education or charitable organizations that are resident in, and generally exempt from tax in, the United States, are exempt from Canadian non-resident withholding tax. Provided certain administrative procedures are observed by such an organization, Microcell would not be required to withhold such tax from dividends paid or credited to such organization.

     A U.S. Holder will not be subject to tax under the ITA on any Taxable Capital Gain (or will not be entitled to deduct any Allowable Capital Loss in computing taxable income earned in Canada) realized on a disposition of First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares, Class B Non-Voting Shares and Warrants, as the case may be, unless the shares or the Warrants constitute “taxable Canadian property” (as defined in the ITA) at the time of their disposition. First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares, Class B Non-Voting Shares and the Warrants, assuming they remain listed on a recognized exchange at the time of such disposition, generally would not constitute taxable Canadian property to a U.S. Holder unless at any time during the 60-month period immediately preceding their disposition, the U.S. Holder, persons with whom the U.S. Holder did not deal at arm’s length, or the U.S. Holder together with all such persons, owned 25% or more of the issued shares of any class or series of Microcell. For this purpose, a U.S. Holder will be considered to own any share if such person has an interest in option or other right, such as the Warrants, to acquire such share, either by virtue of holding First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares or otherwise.

     The Convention provides for an exemption under the terms of which capital gain on shares of Canadian corporations, the value of which is not derived principally from real estate situated in Canada, are exempt from Canadian income tax, and, as a result, U.S. Holders may not be liable to Canadian tax (or will not be entitled to deduct any allowable capital loss in computing taxable income earned in Canada).

Redemption and Conversion of First Preferred Shares and Second Preferred Shares

     If Microcell redeems the First Preferred and Second Preferred Shares for cash or for First Units in lieu of First Preferred Shares, or Second Units in lieu of Second Preferred Shares, as the case may be, the U.S. Holder will be deemed to have received a dividend equal to the amount, if any, by which the fair market value of the consideration received for the redemption (cash, First Units or Second Units, as the case may be) exceeds the paid-up capital of the First Preferred and Second Preferred Shares at such time as computed for purposes of the ITA. The amount of any such deemed dividend will generally not be included in computing the U.S. Holder’s proceeds of disposition for the purposes of computing the capital gain or loss, if any, arising on disposition of such First Preferred and Second Preferred Shares. A U.S. Holder will also realize a Capital Gain (or a capital loss) on the redemption of its First Preferred and Second Preferred Shares equal to the amount by which the proceeds of disposition (reduced by the amount of the deemed dividend discussed above) exceed (or are exceeded by) the adjusted cost base to the U.S. Holder of such First Preferred and Second Preferred Shares, and any reasonable cost of disposition.

     The tax consequences relating to such dividend and to such Capital Gains (or to capital loss) attributable to the redemption of First Preferred and Second Preferred Shares will be the same as the those described above under the heading “Holding and Dispositions of First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares”.

     If Microcell, at the discretion of Microcell or the U.S. Holder, converts the First Preferred and Second Preferred Shares into Class A Restricted Voting Shares or Class B Non-Voting Shares, the U.S. Holder will generally be treated as not having disposed of the shares and the cost of the Class A Restricted Voting Shares and the Class B Non-Voting Shares to such U.S. Holder will be equal to the aggregate adjusted cost base to the U.S. Holder of the converted shares immediately before conversion. However, a U.S. Holder may be required to comply with the requirements of section 116 of the ITA as a result of the conversion, if the First Preferred Shares or Second Preferred Shares, as the case may be, do not remain listed on a prescribed stock exchange (which includes the TSX) at the time of such conversion. In addition, the Class A Restricted Voting Shares and the Class B Non-Voting Shares received on a conversion at a time when the First Preferred Shares or Second Preferred Shares as converted are “taxable Canadian property”, will be deemed to be taxable Canadian property, irrespective of whether such Class A Restricted Voting Shares and Class B Non-Voting Shares are themselves listed.

Exercise of Warrants

     No gain or loss will be realized by a U.S. Holder upon exercise of Warrants. When a Warrant is exercised, the cost to the U.S. Holder of the Class A Restricted Voting Shares thus acquired will be the aggregate of the adjusted cost base, for that U.S. Holder,

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of the Warrant and the price paid for the Class A Restricted Voting Shares upon exercise of the Warrant. The adjusted cost base of the Warrants acquired at the time of the plan of arrangement of Microcell under the Companies’ Creditor Arrangement Act (Canada) is equal to their fair market value on the issuance date.

     To the extent that a U.S. Holder receives a cash payment in lieu of a fractional share as a result of the exercise of a Warrant, the CCRA generally allows a shareholder who receives cash not exceeding $200 in lieu of a fractional share to recognize a capital gain or capital loss on the disposition of the fractional share in the taxation year in which the cash payment was received in lieu of the fractional share or, alternatively, to reduce the adjusted cost base of the shares received by such shareholder by the cash amount.

Expiry of Warrants

     The expiry of an unexercised Warrant will generally result in a capital loss to the U.S. Holder equal to the adjusted cost base of the Warrant immediately before its expiry. Provided that such Warrant consisted of “taxable Canadian property” to such U.S. Holder one-half of such loss will be considered an Allowable Capital Loss deductible against Taxable Capital Gains from “taxable Canadian property”. For more details on this issue, see the discussion above under the heading “Holding and Disposition of First Preferred Shares, Second Preferred Shares, Class A Restricted Voting Shares and Class B Non-Voting Shares”.

Exchange of Class B Non-Voting Shares for Class A Restricted Voting Shares

     A U.S. Holder will not be subject to Canadian tax in respect of the exchange of Class B Non-Voting Shares for Class A Restricted Voting Shares. The adjusted cost base of Class A Restricted Voting Shares into which the Class B Non-Voting Shares were exchanged will equal the adjusted cost base of the Class B Non-Voting Shares.

Holding and Disposition of First Notes and Second Notes

     Withholding tax is imposed under the ITA at a rate of 25% of the amount of interest which is or is deemed to be paid or credited, subject to reduction in accordance with the provisions of any applicable income tax treaty or convention. Under the Convention, the rate of withholding tax in respect of interest beneficially owned by a resident of the United States for the purposes of that convention is generally reduced to 10%. Moreover, under the Convention, interest paid to certain religious, scientific, literary, education or charitable organizations that are resident in, and generally exempt from tax in, the United States, are exempt from Canadian non-resident withholding tax. Provided certain administrative procedures are observed by such an organization, Microcell would not be required to withhold such tax from interest paid or credited to such organization.

     Based on the terms and conditions of the First Notes and Second Notes, the following consequences should arise to a U.S. Holder holding First Notes and/or Second Notes:

     Upon the conversion of the First Notes and Second Notes into Class A Restricted Voting Shares and Class B Non-Voting Shares, a U.S. Holder will generally be deemed to have received the amount of interest accrued or deemed to accrue to the date of such conversion.

     Interest which is or is deemed to be paid or credited by Microcell to a U.S. Holder who deals at arm’s length with Microcell on First Notes and Second Notes should not be subject to withholding tax under the ITA as a maximum of 25% of the principal amount of First Notes and Second Notes, as the case may be, will be payable within five years from the date on which they are issued. No other taxes on income (including Taxable Capital Gains) will be payable under the ITA in respect of the acquisition, holding, redemption or disposition of the First Notes and Second Notes or the receipt of interest, principal and premium (if any) thereon by a U.S. Holder.

Consequences to Microcell

     According to an advanced income tax ruling which has been obtained from CCRA in connection with the First Preferred Shares and Second Preferred Shares, such shares will meet, for at least the first five years following their issuance, the statutory requirements for such shares to qualify as Distress Preferred Shares and therefore dividends paid on those shares during that period will not result in Microcell being subject to tax under Part VI.1 of the ITA.

Certain U.S. Federal Income Tax Considerations

     The following is a summary of the principal U.S. federal income tax considerations applicable to an investment in Class A Restricted Voting Shares, Class B Non-Voting Shares, First Preferred Shares, Second Preferred Shares, Warrants, First Units or Second Units acquired pursuant to a redemption of First Preferred Shares or Second Preferred Shares, and First Notes or Second Notes constituting a part of the First Units or Second Units, in each case by a U.S. holder that holds such securities as capital assets within the meaning of the U.S. Internal Revenue Code of 1986, as amended, which we refer to herein as the “Code.” In this summary, we refer to Class A Restricted Voting Shares and Class B Non-Voting Shares collectively as “Common Shares,” to First Preferred Shares

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and Second Preferred Shares collectively as “Preferred Shares,” to Common Shares and Preferred Shares collectively as “Shares,” to First Units and Second Units collectively as “Units,” and to First Notes and Second Notes collectively as “Notes.”

     For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Shares, Warrants, Units or Notes that is, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any State thereof or the District of Columbia;

• an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

• a trust the administration of which is subject to the primary supervision of a court in the United States and for which one or more U.S. persons have the authority to control all substantial decisions.

     If a partnership holds Shares, Warrants, Units or Notes, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership.

     This summary is based on the Code, Treasury regulations promulgated under the Code, and judicial and administrative interpretations thereof, all as in effect on the date hereof and all of which are subject to change, which change may be retroactive and may affect the tax consequences described herein.

     This summary is for general information only and does not take into account the individual circumstances of any particular investor. Therefore, investors who are U.S. holders are strongly urged to consult their own tax advisors with respect to the tax consequences of an investment in Shares, Warrants, Units or Notes based on their particular circumstances, including any consequences of an investment in Shares, Warrants, Units or Notes arising under state or local tax law or foreign tax laws of jurisdictions outside of the United States.

Shares

Distributions

     Distributions on Shares, whether in cash or in property, that are paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be includible in income by a U.S. holder as a dividend when actually or constructively received. The amount of the dividend will equal the amount of cash and the fair market value of the property received. To the extent a U.S. holder receives a distribution that exceeds our current and accumulated earnings and profits, the distribution will be treated first as a non-taxable return of capital that reduces the holder’s adjusted tax basis in the relevant Shares (to the extent of such basis) and thereafter as taxable gain from the sale or exchange of such Shares. Generally, the dividends received deduction and Code section 1059 extraordinary dividend provisions will not apply to U.S. holders.

     For taxable years beginning after December 31, 2002 and before January 1, 2009, dividends received by an individual from a “qualified foreign corporation” are eligible for preferential rates of taxation. For this purpose, we believe that we are a qualified foreign corporation. Such dividends generally are eligible for the preferential tax rates except to the extent that the individual (1) holds a share of stock for 60 days or less during the 120-day period beginning 60 days before the ex-dividend date (or, in the case of certain preferred stock, 90 days or less during the 180-day period beginning 90 days before the ex-dividend date) as measured under Section 246(c) of the Code, (2) is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property or (3) elects to treat the dividend as investment income for purposes of determining the amount of deductible investment interest under Section 163(d)(4)(B) of the Code. Further, if an individual receives, with respect to any share of stock, an extraordinary dividend (within the meaning of Section 1059(c) of the Code) eligible for the preferential tax rates, any loss on a subsequent sale of the stock is treated as a long-term capital loss to the extent of the extraordinary dividend.

     Dividends paid in Canadian dollars (including the amount of any Canadian taxes withheld therefrom) will be included in a U.S. holder’s income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the U.S. holder, regardless of whether the Canadian dollars are converted to U.S. dollars at that time. U.S. holders should consult their own tax advisors regarding the possible effect and rate of any Canadian withholding tax and the reduction of such withholding rate under the income tax treaty between the United States and Canada.

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     In the case of certain preferred stock that is redeemable at a premium, Code section 305 provides that the premium generally must be taken into income by a holder as a deemed distribution (generally treated as described above) under an economic accrual method over the period ending with the redemption date. Generally, the premium includes both (1) the excess of the redemption value over the initial stated value and (2) the excess of the initial stated value over the “issue price” of the preferred stock (i.e., its purchase price or initial fair market value). Although the application of these rules to the Preferred Shares is not entirely clear, the economic accrual rules will likely apply to the Preferred Shares. U.S. holders should consult their tax advisors about the application of these rules to the Preferred Shares.

Sales, Exchanges, Redemptions and Conversions

     Upon the sale, exchange or other disposition of Shares to a person other than us, a U.S. holder will recognize capital gain or loss equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Shares. Such gain or loss will be long-term capital gain or loss if the Shares have been held for more than one year and otherwise will be short-term capital gain or loss. Long-term capital gains of individuals are eligible for preferential rates of taxation, which have been reduced for long-term capital gains recognized on or after May 6, 2003, and before January 1, 2009. Short-term capital gains are taxed at the rates applicable to ordinary income, which, for gains recognized on or after May 6, 2003, and before January 1, 2009, will be higher than the rates applicable to dividends. The deductibility of capital losses is subject to limitations.

     A redemption of Preferred Shares for cash or for First Units or Second Units will be treated under Code section 302 as a taxable distribution (generally treated as described above under “Distributions”) unless the redemption (1) results in a “complete termination” of the holder’s stock interest in our company under Code section 302(b)(3); (2) is “substantially disproportionate” with respect to the holder under Code section 302(b)(2); or (3) is “not essentially equivalent to a dividend” with respect to the holder under Code section 302(b)(1). In determining whether any of these tests has been met, Shares considered to be owned by the holder by reason of certain constructive ownership rules set forth in Code section 318, as well as Shares actually owned, generally must be considered.

     If any of the above three tests is met, the redemption of the Preferred Shares for cash or for First Units or Second Units will be treated as a sale of the Preferred Shares and will result in the recognition of gain or loss equal to the difference between the amount of cash or the amount of First Units or Second Units received (including the “issue price” of the First Notes or Second Notes received) and the adjusted tax basis in the Preferred Shares redeemed. Such gain or loss will be taxed as described above.

     Generally, a U.S. holder will recognize no gain or loss upon a conversion of Preferred Shares to Common Shares or upon redemption at maturity of Preferred Shares for Common Shares. The U.S. holder’s adjusted tax basis in the Common Shares received in the conversion or redemption will generally equal the holder’s adjusted tax basis in the Preferred Shares so converted or redeemed. It is possible that, under Code section 305, a redemption of Preferred Shares at maturity for Common Shares could result in a taxable constructive distribution (generally treated as described above under “Distributions”) to a U.S. holder. U.S. holders should consult their tax advisors regarding that possibility.

     A U.S. holder will recognize no gain or loss upon an exchange of Class B Non-Voting Shares for Class A Restricted Voting Shares. The U.S. holder’s adjusted tax basis in the Class A Restricted Voting Shares received in the exchange will equal the holder’s adjusted tax basis in the Class B Non-Voting Shares exchanged therefor, and the U.S. holder’s holding period for the Class A Restricted Voting Shares will include the holding period for the Class B Non-Voting Shares exchanged therefor.

Warrants

     Upon the exercise of Warrants with cash, a U.S. holder will not recognize gain or loss and will have a tax basis in the Common Shares acquired pursuant to such exercise equal to such holder’s tax basis in the exercised Warrants plus the exercise price. The holding period for such Common Shares will commence on the date of exercise of the Warrants.

     Upon the sale, exchange or other disposition of a Warrant, a U.S. holder will recognize gain or loss in an amount equal to the amount realized and the U.S. holder’s tax basis in the Warrant. Such gain or loss will be long-term capital gain or loss if the Warrant has been held for more than one year, and otherwise will be short-term capital gain or loss. Long-term capital gains of individuals are eligible for preferential rates of taxation, which have been reduced for long-term capital gains recognized on or after May 6, 2003, and before January 1, 2009. Short-term capital gains are taxed at rates applicable to ordinary income. The deductibility of capital losses is subject to limitations.

     If a Warrant expires unexercised, a U.S. holder will recognize a capital loss equal to the holder’s tax basis in the expired Warrant.

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Units

     The discussion in this section assumes the Notes, when issued, will be properly treated as indebtedness for U.S. federal income tax purposes.

     The Notes will be issued with original issue discount for U.S. federal income tax purposes, which generally requires a holder to accrue ordinary income on a constant yield to maturity basis, regardless of the receipt of cash payments.

     Notes that are part of Units purchased subsequent to their original issuance may be subject to the market discount or bond premium rules.

     Upon the sale, exchange or other disposition of a Unit, a U.S. holder will recognize capital gain or loss equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Unit. Such gain or loss will be long-term capital gain or loss (except to the extent of recognized accrued market discount arising from the Note) if the Unit has been held for more than one year and otherwise will be short-term capital gain. Long-term capital gains of individuals are eligible for preferential rates of taxation, which have been reduced for long-term capital gains recognized on or after May 6, 2003, and before January 1, 2009. Short-term capital gains are taxed at rates applicable to ordinary income. The deductibility of capital losses is subject to limitations. A holder’s adjusted tax basis in a Unit will include the adjusted tax basis in the Note constituting a part of the Unit, which generally will equal the “issue price” of the Note, increased by the original issue discount that the holder previously included in income (and reduced by any cash payments).

     A U.S. holder generally will not recognize any income, gain or loss upon conversion of a Note into Common Shares except with respect to cash received in lieu of a fractional share. Cash received in lieu of a fractional share upon conversion will be treated as a payment in exchange for the fractional share. Accordingly, the receipt of cash in lieu of a fractional share generally will result in capital gain or loss (measured by the difference between the cash received for the fractional share and the holder’s adjusted tax basis in the fractional share). A U.S. holder’s tax basis in the Common Shares received on conversion of a Note will be the same as such holder’s adjusted tax basis in the Note at the time of conversion (reduced by any basis allocable to a fractional share interest), and the holding period for the Common Shares received on conversion will generally include the holding period of the Note converted.

     U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of converting a voting Unit into a non-voting Unit or a conversion of a non-voting Unit into a voting Unit.

Constructive Dividends

     Under Code section 305, adjustments to the conversion ratio of Preferred Shares or Notes or to the exercise price of Warrants, or the failure to make any such adjustments, may result in the receipt of taxable constructive distributions (generally treated as described above under “Shares – Distribution” by the holders of Preferred Shares, Notes, Warrants or, in certain cases, holders of Common Shares, regardless of whether or not there is an associated distribution of cash or property.

Foreign Currency and Foreign Tax Credit Considerations

     U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of foreign currency exchange gain or loss arising from the receipt of Canadian dollars or the acquisition, ownership or disposition of Canadian dollar-denominated securities.

     For U.S. foreign tax credit limitation purposes, dividends, interest (including additional amounts, if any) and original issue discount generally will be treated as foreign source income, and gain or loss recognized on the sale, exchange or other disposition of Shares, Warrants or Units generally will be treated as from U.S. sources. To the extent Canadian withholding tax is payable in respect of a distribution or payment to a U.S. holder, such holder may be eligible for a foreign tax credit or deduction. Further, foreign source income has an effect on a U.S. holder’s ability to absorb foreign tax credits. The rules relating to U.S. foreign tax credits are extremely complex, and U.S. holders should consult their tax advisors regarding the application of the U.S. foreign tax credit rules to their particular situations.

Passive Foreign Investment Company Considerations

     The Code provides special anti-deferral rules regarding certain distributions received by U.S. persons with respect to, and sales and other dispositions (including pledges) of stock of, a “passive foreign investment company,” which we refer to as a “PFIC.” A foreign corporation, such as our company, will be treated as a PFIC if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.

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     We do not believe that we are currently a PFIC, and we anticipate that we will not become a PFIC. If we become a PFIC, U.S. holders of Shares or Warrants may become subject to adverse U.S. federal income tax consequences. U.S. holders should consult their tax advisors regarding the consequences and possible ameliorative actions.

Backup Withholding and Information Reporting

     The payment within the United States of dividends or interest on, or the proceeds from a disposition of, Shares, Warrants or Units, in each case held by certain non-corporate holders may be subject to U.S. information reporting rules. Such payments may also be subject to U.S. backup withholding at the applicable backup withholding rate, unless a holder provides a taxpayer identification number and satisfies certain other conditions or otherwise establishes an exemption under the Code. Backup withholding is not an additional tax, and may be credited against a holder’s U.S. federal income tax liability or refunded if the amounts so withheld exceed the holder’s U.S. federal income tax liability.

DOCUMENTS ON DISPLAY

     Any documents referred to in this annual report may be inspected at the office of the Company at 800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec, Canada, H5A 1K3.

ITEM 11 — QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

PRE- REORGANIZATION

Qualitative Market Risk Disclosures

Market Risk

     As of December 31, 2002, the Company was involved in its debt restructuring process. In July 2002, the Company unhedged its currency exposure on the 2009 Notes, which had an accreted value of U.S.$270.0 million, generating a total net proceeds of approximately Cdn.$40.6 million. As of December 31st 2002, all of the other hedging instruments of Old Microcell were also terminated.

Quantitative Market Risk Disclosure

Fair Value

     The fair value of the Senior Discount Notes due in 2006, 2007 and 2009 is determined based on an amount quoted on the over-the-counter market as at December 31st 2002.

     The fair value of the swaps and the options is determined based on market rates prevailing at the balance sheet date obtained from the Company’s financial institutions for similar derivative instruments.

     Sensitivity is tested based upon the new debt structure, i.e. post effectiveness of the Plan.

Balance Sheet Positions as of Dec 31, 2002

(Dollars in Thousands)		2002		Thereafter
ASSETS
	Cash and cash equivalents ($)		110,324		n/a
	Weighted-average interest rate (%)		3.8		n/a

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(Dollars in Thousands)						2002		Thereafter
LIABILITIES
Long-term debt, including current portion (fixed rate):
	Senior discount notes:
		Principal/Accreted		Fair value
			Due in 2006 ($)		1,986		284,819		n/a
			Accreted interest ($)		2,612		374,575		n/a
			Due in 2007 ($)		1,500		250,000		n/a
			Accreted interest ($)		1,077		179,443		n/a
			Due in 2009 ($)		1,394		237,387		n/a
			Accreted interest ($)		728		123,906		n/a
		Interest rate
			Due in 2006 (%)				14.000		n/a
			Due in 2007 (%)				11.125		n/a
			Due in 2009 (%)				12.000		n/a
Long-term debt, including current portion (floating rate):
	Senior secured term loans:
		Principal
			Tranche A ($)				143,640		n/a
			Tranche B ($)				79,955		n/a
			Tranche C ($)				17,860		n/a
			Tranche D ($)				33,345		n/a
			Tranche E ($)				215,984		n/a
			Tranche F ($)				99,264		n/a
		Interest rate
			Tranche A (%)				5.50		n/a
			Tranche B (%)				6.25		n/a
			Tranche C (%)				5.50		n/a
			Tranche D (%)				5.50		n/a
			Tranche E (%)				6.50		n/a
			Tranche F (%)				6.75		n/a

POST- REORGANIZATION

Qualitative Market Risk Disclosures

Market Risk

     As most of the Company’s revenues are expected to be received in Canadian dollars, the Company is exposed to foreign exchange risk on repayments at maturity of the Tranche B Debt denominated in U.S. dollars. The Company uses derivatives such as foreign exchange swap agreements to manage certain elements of its cash flow exposure resulting from foreign exchange fluctuations. The Company does not hold derivatives for trading purposes.

     It is the Company’s policy to enter into foreign currency and other hedging transactions to manage financial risk exposures and to protect cash flow from market volatility, while minimizing the costs associated with any hedging program. To date, the Company has hedged its foreign exchange risk exposure to mitigate the impact of changes in foreign exchange rates on its cash flow (100% of permitted equivalent of Cdn.$100.0 million denominated in U.S. dollars).

Interest Rate Risk Management

     Of the secured term loans, the Tranche B Debt of Cdn.$300.0 million has a floating interest rate. A fluctuation of one percentage point would affect cash flow by approximately Cdn.$7.6 million over the maturity period (2008) of the Tranche. The other Term Loan, carrying a floating interest rate is the Tranche A Exit Facility of Cdn.$25.0 million which remains undrawn as of May 2003. In the case that the Tranche A Exit Facility was fully drawn, a one percentage point change in interest rates could affect the Company’s cash flow by approximately Cdn.$0.25 million annually up to 2006. As of May 2003, the Company did not hold any interest rate swap agreements related to interest rate exposure.

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     As the Company’s policy is to hold all cash equivalents and short-term investments to maturity, short-term fluctuations in interest rates would not impact the realization value of these investments.

Foreign Exchange Risk Management

     The Company’s objective in managing foreign exchange risk is to protect against cash flow and balance sheet volatility resulting from changes in foreign exchange rates. Long-term debt denominated in U.S. dollars exposes the Company to changes in foreign exchange rates. Starting on May 23rd, 2003, a foreign exchange swap instrument was used to convert U.S.$35.8 million of debt into Cdn.$50.0 million of debt. This foreign exchange swap has resulted in a favorable position of Cdn.$1.9 million. Starting on June 16th, 2003, a foreign exchange swap instrument was used to convert the remaining U.S.$36.9 million of debt into Cdn.$50.0 million of debt. This foreign exchange swap has resulted in a favorable position of Cdn.$3.4 million.

     Only the U.S. dollars portion of Tranche B Debt carries a foreign exchange risk (U.S. dollar equivalent of Cdn.$195.0 million, over Cdn.$300 million, is denominated in U.S. dollars). Thus, the unhedged Cdn.$95.0 million denominated in U.S. dollars exposes the Company to approximately Cdn.$3.1 million of foreign exchange loss for a fluctuation of 1% in the Canadian dollar to the U.S. dollar up to the Tranche’s maturity in 2008.

Quantitative Market Risk Disclosure

Interest Rate Sensitivity

     The following table provides information about the Company’s derivative financial instruments and other financial instruments that are sensitive to changes in interest rates. For short-term investments, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates.

     For long-term debt, the table presents principal cash flows and related interest by expected maturity dates.

Interest Rate Sensitivity

(Dollars in Thousands)			2003		2004		2005		2006		2007		Thereafter		Total
LIABILITIES
Long-term debt, including current portion:
	Secured Loans
	Tranche A Exit Facility ($)		Undrawn		Undrawn		Undrawn		Undrawn			N/A		—		—
		Tranche B Debt ($)		7,500		10,000		10,000		15,000		15,000		242,500		300,000
		Tranche C Notes ($)(1)		—		—		—		—		—		109,594		109,594
	Interest rate
	Tranche A Exit Facility (%)			—		—		—		—		N/A
		Tranche B Debt (%)		5.5		6.0		6.5		7.0		7.5		8.0		N/A
		Tranche C Notes (%)		8.0		8.0		8.0		8.0		8.0		8.0		N/A

(1) This amount includes accredited interest.

Foreign Currency Sensitivity

     The following table provides information about the Company’s financial instruments by functional currency and presents such information in Canadian dollar equivalents. The table summarizes information on instruments and transactions that are sensitive to foreign currency exchange rates, including currency denominated debt obligations. For foreign currency denominated debt obligations, the table presents principal cash flows, related interest rates by expected maturity dates and the assumed applicable current average forward foreign currency exchange rates.

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Foreign Currency Sensitivity

(Dollars in Millions)		2003		2004		2005		2006		2007		Thereafter		Total
LONG-TERM DEBT DENOMINATED IN FOREIGN CURRENCY ($US)
Canadian dollars:
	Secured Loan
	Tranche B Debt ($)		5,000		6,667		6,667		10,000		10,000		161,667		200,000
	Interest rate – Floating
	Tranche B Debt (%)		5.50		6.00		6.50		7.00		7.50		8.00		N/A
	Forward foreign currency exchange rate ($)
	Tranche B Debt ($)
	Swap (May 23, 2003) ($)		50,000												50,000
	Forward F/X Rate
	(Cdn/US)		1.3986												1.3986
	Swap (June 16, 2003) ($)		50,000												50,000
	Forward F/X Rate
	(Cdn/US)		1.3548												1.3548

ITEM 12 — DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable

PART II

ITEM 13 — DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Incorporated by reference in this annual report is: (1) the section entitled “The Plan” presented at pages 27 to 50 of the Circular filed on Form 6-K on February 20, 2003; and (2) the material change report filed on Form 6-K on January 6, 2003.

ITEM 14 — MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

     Incorporated by reference in this annual report is: (1) the section entitled “Development and Description of the Plan” presented at pages 30 to 35 of the Circular filed on Form 6-K on February 20, 2003; and (2) the material change report filed on Form 6-K on January 6, 2003.

ITEM 15 — CONTROLS AND PROCEDURES

     As of a date (the “evaluation date”) within 90 days prior to the date of this report, Microcell Telecommunications Inc. conducted an evaluation (under the supervision and with the participation of Microcell Telecommunications Inc.’s management, including the chief executive officer and chief financial officer), pursuant to Rule 13a-15 promulgated under the Exchange Act, of the effectiveness of the design and operation of Microcell’s disclosure controls and procedures. Based on this evaluation, Microcell’s chief executive officer and chief financial officer concluded that as of the evaluation date, such disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by Microcell in reports it files or submits under the

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Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

     Since the evaluation date, there have not been any significant changes in the internal controls or in other factors that could significantly affect the internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

ITEM 16. A. — AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable

ITEM 16. B. — CODE OF ETHICS

Not applicable

ITEM 16. C. — PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable

PART III

ITEM 17 — FINANCIAL STATEMENTS

Not applicable

ITEM 18 — FINANCIAL STATEMENTS

     The financial statements contained in this item 18 are the audited consolidated financial statements for the year ended December 31, 2002 of Old Microcell, and do not contain information pertaining to subsequent developments, including the consummation of the Plan and Microcell’s succession to Old Microcell, except for note 1. The financial statements appearing in this item may use different defined terms than those appearing elsewhere in this annual report on Form 20-F.

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AUDITORS’ REPORT

To the Shareholders of
Microcell Telecommunications Inc.

     We have audited the consolidated balance sheets of Microcell Telecommunications Inc. as at December 31, 2002 and 2001, and the consolidated statements of loss and deficit and cash flows for each of the years in the three-year period ended December 31, 2002. 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.

     We conducted our audits in accordance with Canadian and United States generally accepted auditing standards. 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.

     In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2002 and 2001, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2002 in accordance with Canadian generally accepted accounting principles.

     As described in note 3, in 2002, the Company has changed its method of accounting for goodwill and other intangible assets, stock-based compensation and other stock-based payments and consideration given by a vendor to a customer or a reseller of the vendor’s product.

Montréal, Canada,	Chartered Accountants
January 31, 2003 (except for note 1 which is as at May 1, 2003)

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Microcell Telecommunications Inc.

CONSOLIDATED BALANCE SHEETS

As at December 31
(In thousands of Canadian dollars)

		Pro forma
		2002		2002			2001
		$		$			$
		(note 1)					(Restated
		(Unaudited)					note 3)
ASSETS (note 11)
Current assets
Cash and cash equivalents			26,979		26,979			19,005
Short-term investments and marketable securities (note 4)			83,345		83,345			159,524
Receivables (note 5)			71,813		71,813			85,973
Receivables from related companies			866		866			489
Inventories			19,527		19,527			19,897
Other current assets			30,740		39,616			40,604
Total current assets			233,270		242,146			325,492
Capital assets (note 6)			312,113		655,646			764,048
Intangible assets (note 7)			250,410		2,727			226,126
Long-term investments (note 8)			10,671		10,671			34,983
Deferred charges and other assets (note 9)			1,664		1,664			44,610
			808,128		912,854			1,395,259
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities
Related companies			23		23			445
	Other (note 10)		51,536		132,306			106,334
Deferred revenues			37,573		37,573			38,115
Current portion of long-term debt (note 11)			7,500		7,500			16,523
Total current liabilities			96,632		177,402			161,417
Long-term debt (note 11)			342,500		2,032,678			1,887,048
Deferred income tax liabilities (note 16)			—		—			73,519
			439,132		2,210,080			2,121,984
Shareholder’s deficiency
Share capital (note 12)			368,996		1,167,678			1,167,371
Warrants (note 12)			—		1,770			2,077
Deficit			—		(2,466,674	)		(1,896,173	)
			368,996		(1,297,226	)		(726,725	)
			808,128		912,854			1,395,259

Commitments (note 17)
Contingency (note 21)

See accompanying notes

On behalf of the Board:

André Tremblay (signed)
Director, President and Chief Executive Officer Charles Sirois (signed)
Chairman of the Board

86

Microcell Telecommunications Inc.

CONSOLIDATED STATEMENTS
OF LOSS AND DEFICIT

Years ended December 31
(In thousands of Canadian dollars, except for per-share data)

	2002			2001			2000
	$			$			$
				(Restated			(Restated
				note 3)			note 3)
Revenues
Services		566,706			509,082			365,665
Equipment sales		24,356			32,408			40,321
		591,062			541,490			405,986
Costs and expenses (note 14)
Cost of products and services		285,252			336,753			306,391
Selling and marketing		105,386			115,638			119,049
General and administrative		109,412			98,902			92,878
Depreciation and amortization		242,416			177,990			131,304
		742,466			729,283			649,622
Operating loss before impairment of intangible assets and restructuring charges		151,404			187,793			243,636
Impairment of intangible assets (note 7)		223,399			—			—
Restructuring charges (note 15)		7,494			5,226			—
Operating loss		382,297			193,019			243,636
Interest income		(5,479	)		(6,553	)		(20,341	)
Interest expense		216,256			215,888			185,471
Financing charges		10,573			8,349			8,742
Foreign exchange loss (gain)		(926	)		51,129			24,638
Write-down of deferred financing costs and deferred gain and loss on financial instruments (note 9)		16,947			—			—
Gain on financial instruments (note 9)		(6,570	)		—			—
Net gain on disposal of investments (note 8)		—			—			(285,967	)
Loss in value of investments, marketable securities and other assets (notes 4, 8 and 9)		16,086			33,093			248,336
Share of net loss (net income) in investees (note 8)		13,212			5,282			(20,573	)
Loss before income taxes		642,396			500,207			383,942
Income tax benefit (note 16)		(71,895	)		(1,722	)		(115,515	)
Net loss		570,501			498,485			268,427
Deficit, beginning of year		1,896,173			1,397,688			1,129,261
Deficit, end of year		2,466,674			1,896,173			1,397,688
Basic and diluted loss per share (note 13)		2.37			4.56			2.79

See accompanying notes

87

Microcell Telecommunications Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31
(In thousands of Canadian dollars)

		2002			2001			2000
		$			$			$
OPERATING ACTIVITIES
Net loss			(570,501	)		(498,485	)		(268,427	)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation and amortization			242,416			177,990			131,304
	Accreted interest on long-term debt		72,762			158,194			142,812
	Financing charges		9,128			7,674			7,341
	Foreign exchange loss (gain)		(493	)		50,281			25,449
	Write down of deferred financing costs and deferred gain and loss on financial instruments		16,947			—			—
	Reversal of provision for sales tax		(13,806	)		—			—
	Deferred income taxes		(73,519	)		(3,966	)		(116,968	)
	Net gain on disposal of investments		—			—			(285,967	)
	Gain on financial instruments		(6,570	)		—			—
	Impairment of intangible assets		223,399			—			—
	Loss in value of investments, marketable securities and other assets		16,005			33,079			248,336
	Share of net loss (net income) in investees		13,212			5,282			(20,573	)
			(71,020	)		(69,951	)		(136,693	)
Changes in operating assets and liabilities
Decrease (increase) in trade receivables			15,941			(27,234	)		(15,560	)
	Decrease (increase) in interest receivable		874			2,771			(1,067	)
	Decrease (increase) in taxes receivable		(2,655	)		6,005			(1,970	)
	Increase in receivables from related companies		(377	)		(489	)		—
	Decrease (increase) in inventories		370			17,545			(11,868	)
	Decrease (increase) in other current assets		42			4,409			(9,185	)
	Increase (decrease) in accounts payable and accrued liabilities		16,385			(61,289	)		52,837
	Increase (decrease) in deferred revenues		(542	)		5,979			17,774
			30,038			(52,303	)		30,961
Cash used in operating activities			(40,982	)		(122,254	)		(105,732	)
INVESTING ACTIVITIES
Reduction of (additions to) short-term investments			75,262			(157,985	)		23,919
Reduction of (additions to) short-term investments – restricted			—			120,710			(120,710	)
Proceeds from sale of marketable securities			589			72,804			87,128
Additions to capital assets			(124,683	)		(277,395	)		(257,191	)
Additions to intangible assets			—			(130,000	)		(20,000	)
Additions to deferred charges and other assets			(2,377	)		(9,488	)		(6,756	)
Additions to long-term investments			(1,351	)		(2,535	)		(35,965	)
Proceeds from termination of derivative instruments			31,041			—			—
Proceeds from long-term investments			949			—			—
Cash used in investing activities			(20,570	)		(383,889	)		(329,575	)
FINANCING ACTIVITIES
Issuance of shares			—			450,755			402,426
Share issuance costs			—			(11,434	)		(5,523	)
Increase in long-term debt			100,000			270,813			67
Repayment of long-term debt			(10,732	)		(270,809	)		(92	)
Financing costs			(19,742	)		(1,555	)		(125	)
Cash provided by financing activities			69,526			437,770			396,753
Increase (decrease) in cash and cash equivalents for the year			7,974			(68,373	)		(38,554	)
Cash and cash equivalents, beginning of year			19,005			87,378			125,932
Cash and cash equivalents, end of year			26,979			19,005			87,378
Additional information
Interest paid			82,348			49,933			43,863
Income taxes paid			2,294			2,249			1,289

See accompanying notes

88

1. DESCRIPTION OF BUSINESS AND REORGANIZATION

Description of business

Microcell Telecommunications Inc. (“Microcell”) was incorporated under the laws of Canada by articles of incorporation dated October 16, 1992, and conducts its business of wireless communications through five wholly owned subsidiaries (collectively, the “Company”) which are: Microcell Capital II Inc. (“Microcell Capital”), Microcell Connexions Inc. (“Microcell Connexions”), Microcell Labs Inc. (“Microcell Labs”), Microcell Solutions Inc. (“Microcell Solutions”) and Inukshuk Internet Inc. (“Inukshuk”).

The Company carries on its operations through three strategic business segments: Personal Communications Services (“PCS”), Wireless Internet and Investments. Under its PCS business segment, the Company is a provider of PCS in Canada under one of the two national 30 MHz PCS authorizations (the “PCS License”) awarded in Canada in 1995 and renewed for five years in March 2001. The terms and conditions for the renewal of the license are identical to those established for the first license in April 1996. Through its Wireless Internet business segment, the Company provides mobile Internet services to its PCS subscribers and had planned to build a high-speed Internet Protocol-based data network using Multipoint Communications Systems (“MCS”) technology in the 2500 MHz range. However, the current challenging capital market conditions, which have made raising financing difficult, Inukshuk has suspended building the MCS network on its own for the time being. Finally, under its Investments business segment, the Company invests in various wireless or high technology companies and, as a result, is exposed to normal market risk fluctuation which may be significant.

The Company continues to experience growth-related capital requirements arising from the need to fund of network capacity improvements and ongoing maintenance and to fund the cost of acquiring new PCS customers. Microcell’s ability to generate positive net income and cash flow in the future is dependent upon various factors, including the level of market acceptance of its services, the degree of competition encountered by the Company, the cost of acquiring new customers, technology risks, general economic conditions and regulatory requirements.

At the time of the release of its second quarter 2002 results on August 9, 2002, the Company announced that there was significant uncertainty regarding its ability to continue as a going concern, such ability being dependent, among other factors, on the Company’s ability to reduce its financing costs and improve its liquidities and operating performance. The Company also announced on that date that it had retained the services of a financial advisor and formed a special committee composed of independent directors with a view of evaluating various strategic options in the circumstances. In light of the going concern uncertainty, the mandate of the special committee was to review and evaluate the alternatives of the Company with a view to reducing its financing costs and improving its liquidity. To that end, the special committee obtained the advice and recommendations of the financial advisor. The significant uncertainty resulted from the fact that the Company disclosed that it believed it would be in default of certain covenants in its long-term debt agreements within a twelve-month period, unless it could successfully renegotiate some of these covenants. With such default, the senior secured lenders could have chosen not to provide the Company with further access to funds under the senior secured revolving credit facility and could also accelerate debt repayment.

On October 31, 2002, the Company entered into a forbearance and amending agreement with its secured bank lenders in which the lenders agreed to forbear until December 23, 2002, subject to certain conditions, the exercise of any rights with respect to certain possible defaults. The covenants to which the forbearance agreement applied related to the non-payment of interest on the Company’s Senior Discount Notes due in 2006 (the “2006 Notes”) and the possibility of the non-payment to a vendor under a material contract. On December 2, 2002, the Company announced that it would not make its interest payment on its 2006 Notes due on that day. Before the end of the forbearance period, the Company reached an agreement with the vendor on the amount due and settled such amount.

On December 23, 2002 the Company announced that its secured lenders, holding approximately 74% of the outstanding secured debt, have agreed on the terms of a recapitalization plan. In this regard, the Company’s secured lenders have agreed to forbear until January 6, 2003 the exercise of any rights with respect to a default resulting from the non-payment of interest on the 2006 Notes. In addition, both parties agreed to terminate the senior secured revolving credit facility. The Company was subsequently not in compliance with certain covenants under its long-term debt agreements and as such all the long-term debt is in default. Microcell also continued to have constructive discussions regarding the plan with an ad hoc committee of unsecured noteholders.

89

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

On January 3, 2003, the Company announced that it had received signed commitments from certain of its secured lenders and noteholders, representing approximately 75% and 55% respectively of the estimated aggregate voting claims that may be represented at the secured creditors’ meeting and the affected unsecured creditors’ meeting. In view of its then current and anticipated financial position, the status of its discussions with financial and strategic investors, the non-payment of U.S.$29.3 million of interest due on the 2006 Notes in December 2002 and the options available to the Company under the circumstances, the Company elected to restructure its operations under the Companies’ Creditors Arrangement Act (“CCAA”) protection and filed for and received protection under the CCAA on January 3, 2003 in the form of an Initial Order. Until the Plan became effective on May 1, 2003, the Company did not make any further payments of principal or interest on its secured debt or unsecured notes, including the interest payment on its 2006 Notes, which was due December 1, 2002, and quarterly principal repayments on its secured term loans due December 31, 2002 and March 31, 2003.

On February 19, 2003, the Company filed its Information Circular and Proxy Statement (the “Circular”), which included a Plan of Reorganization and of Compromise and Arrangement (the “Plan”), setting out the terms of the Company’s proposed plan. Subsequently, on March 17, 2003 the Plan was voted upon and approved by 98% of the secured creditors and 100% of the affected unsecured creditors, representing 93% and 100%, respectively, of the total value of the secured claims and affected unsecured claims that were voted. On March 18, 2003, the Superior Court of the Province of Quebec issued a Sanction Order approving the Plan. On May 1, 2003, the Plan became effective. The Plan reduced the Company’s debt obligations by approximately $1.7 billion.

These consolidated financial statements do not reflect any adjustments arising from the Plan, except that the current portion of long-term debt is equivalent to the current portion of the new debt contracted on the implementation date of the plan. The Company is conducting a revaluation of its assets and liabilities and will adjust their carrying values to reflect the value of the Company as an entity established by the capital reorganization. The revaluation adjustments are expected to be presented in the 2003 second quarter consolidated interim financial statements, the period encompassing the expected implementation date of the Plan, May 1, 2003. The Company’s balance sheet after the implementation date will be presented on a comprehensive revaluation basis after giving effect to both the financial reorganization and the revaluation adjustments.

Reorganization (unaudited)

The following is a summary of the principal transactions and corporate changes provided in the Plan.

(a)	A new company (“New Microcell”) would be incorporated under the Canada Business Corporations Act;
(b)	Microcell would cause the amalgamation of its principal subsidiaries (“Amalco”);
(c)	A reorganization of the share capital of Microcell would be completed;
(d)	New Microcell would subscribe for non-redeemable common shares of Microcell, the subscription price therefore being payable by way of a nominal cash consideration and delivery of an undertaking to deliver Class A Restricted Voting Shares, Class B Non-Voting Shares and Warrants upon the redemption by the Company of the current shareholdings;
(e)	Microcell would redeem the current shareholdings, for Class A Restricted Voting Shares, Class B Non-Voting Shares and Warrants in the capital of New Microcell as provided in the Plan and all of the issued and outstanding options or other rights to acquire shares of Microcell would be cancelled, without payment of any consideration;
(f)	Amalco’s Tranche B Debt and Tranche C Notes (if applicable) would be created having an aggregate Canadian dollar equivalent value as of the effective date of the Plan of $350,000,000;
(g)	Assuming an exchange rate of 1.5363, new Microcell would issue, to the secured creditors of Microcell (which are the holders of the Senior Secured Loans described in note 11), First Preferred Shares and Second Preferred Shares (Voting or Non-Voting Series) for an amount of $176,500,000 and $74,417,000 respectively, in consideration for equivalent principal amounts of the secured debt.
	If the advance tax ruling requested by Microcell is not obtained regarding the qualification as distress preferred shares and, pursuant to the Plan, the administrative agent as agent on behalf of the secured creditors, elects to receive First Units and Second Units on the effective date of the Plan in lieu of First Preferred Shares and Second Preferred Shares, First Units and Second Units would be issued by New Microcell as distributions under the Plan;

90

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

(h)	Assuming an exchange rate of 1.5363, new Microcell would issue, to the affected unsecured creditors (which are the holders of the Senior Discount Notes described in note 11), Second Preferred Shares (Voting or Non-Voting series) in the amount of $74,417,000, and Class A Restricted Voting Shares or Class B Non-Voting Shares and Warrants in the aggregate amount of $43,293,000 in consideration for the payment of the Senior Discount Notes due 2006, 2007 and 2009, if the secured creditors elect to receive First and Second Preferred Shares;
	If the secured creditors elect to receive First and Second Units, New Microcell would issue, to the affected unsecured creditors, Second Units in the amount of $74,417,000, and Class A Restricted Voting Shares or Class B Non-Voting Shares and Warrants in the aggregate amount of $43,293,000 in consideration for the payment of the Senior Discount Notes due 2006, 2007 and 2009,
(i)	New Microcell would issue to the current shareholders Class A Restricted Voting Shares, Class B Non-Voting Shares and Warrants in the aggregate amount of $369,000;

The pro forma column of the balance sheet reflects the acceptance and implementation of the Plan on the assets and liabilities included in the December 31, 2002 consolidated balance sheet, including revaluation adjustments as a result of comprehensive revaluation as if the Plan was implemented at that date. The final adjustments may change based on the value of the assets and liabilities on the implementation date of the plan.

91

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

		Microcell									Microcell
		as at			Pro Forma						Pro Forma as at
		December 31, 2002			Adjustments						December 31, 2002
		$			$						$
					(Unaudited)						(Unaudited)
Current assets
Cash and cash equivalents			26,979			—						26,979
Short-term investments and marketable securities			83,345			—						83,345
Receivables			71,813			—						71,813
Receivables from related companies			866			—						866
Inventories			19,527			—						19,527
Other current assets			39,616			(8,876	)		(i	)		30,740
			242,146			(8,876	)					233,270
Capital assets			655,646			(343,533	)		(i	)		312,113
Intangible assets			2,727			247,683			(i	)		250,410
Long-term investments			10,671			—						10,671
Deferred charges and other assets			1,664			—						1,664
			912,854			(104,726	)					808,128
Current liabilities
Accounts payable and accrued liabilities:
	Related companies		23			—						23
	Other		132,306			(80,770	)	(i) (ii) (iii)				51,536
Deferred revenues			37,573			—						37,573
Other current liabilities:
	Senior Secured Term Loans		7,500			—		(ii)				7,500
			177,402			(80,770	)					96,632
Long-term liabilities:
	Senior Secured Term Loans		582,548			(240,048	)	(ii)				342,500
	Senior Discount Notes		1,450,130			(1,450,130	)	(iii)				—
			2,210,080			(1,770,948	)					439,132
Share capital and Warrants (note 1 h and I)			1,169,448			(1,169,079	)	(iv)				368,996
						250,917		(ii)
						117,710		(iii)
Deficit			(2,466,674	)		2,466,674			(i	)		—
			(1,297,226	)		1,666,222						368,996
			912,854			(104,726	)					808,128

92

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

Pro forma adjustments (unaudited)

(i)	This unaudited pro forma balance sheet of Microcell has been prepared on the fresh start basis of accounting. The Company’s financial advisors assisted in the determination of the enterprise value of the Company assuming effectiveness of the Plan, and a range of value was developed. The final enterprise value utilized was $718,996,000, which has been allocated between long-term debt of $350,000,000 and equity of $368,996,000. This enterprise value was determined based on several traditional valuation methodologies, utilizing projections developed by management including discounted cash flow analysis and comparable company trading analysis. A comprehensive revaluation of the assets and liabilities of Microcell has been done based on this enterprise value. Pursuant to this revaluation the Company assigned a value, calculated at management’s best estimate, to Microcell’s intangible assets, which are, the PCS Licenses at $189,356,000, the Customer list at $32,356,000 and the Fido® brand name at $28,698,000 The Customer list will be amortized over 30 months. The PCS Licenses and the Fido® brand name were determined to have an indefinite life and will not be amortized but will be tested for impairment on an annual basis;
(ii)	Pursuant to the Plan, the existing Senior Secured Term Loans and the net payable to the secured creditors with respect to the cross currency and interest rate swaps terminated in December 2002 (see note 9) will be converted into new Tranche B Debt ($300,000,000) and Tranche C Notes ($50,000,000) as well as First Preferred Shares or First Units ($176,500,000) and Second Preferred Shares or Second Units ($74,417,000);
(iii)	Pursuant to the Plan, the existing Senior Discount Notes and the unpaid accrued interest will be converted into Second Preferred Shares or Second Units for an amount of $74,417,000 and Class A Restricted Voting Shares or Class B Non-Voting Shares and Warrants for an aggregate amount of $43,293,000;
(iv)	Pursuant to the Plan, the current shareholdings will be converted into Class A Restricted Voting Shares, Class B Non-Voting Shares and Warrants for an aggregate amount of $369,000;
(v)	This unaudited pro forma balance sheet has been prepared in accordance Canadian GAAP. No material adjustments to this unaudited pro forma balance sheet would be required to conform with U.S. GAAP and the accounting principles and practices required by the SEC, except as related to the First and Second Preferred Shares as well as to the First and Second Units.
	Under U.S. GAAP, redeemable preferred shares subject to mandatory redemption requirements that are outside the control of the issuer are excluded from “shareholders’ equity (deficiency)” and presented separately in the issuer’s balance sheet between liabilities and shareholders’ equity (deficiency). Under Canadian GAAP, such shares are presented as equity ($325,334,000 at December 31, 2002, on a pro-forma basis). The FASB is in the process of finalizing a new standard dealing with accounting for liabilities and equity. The final standard, which is expected to be issued in the second quarter of 2003, may affect the balance sheet presentation of these instruments under U.S. GAAP.
	As described above, the secured creditors have the option to receive First and Second Units instead of First and Second Preferred Shares. Under Canadian GAAP these First and Second Units are presented as equity. Under U.S. GAAP these instruments would be classified as debt instruments.
	The following table outlines the adjustments to the unaudited pro forma balance sheet that would be required to conform with U.S. GAAP.

93

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

				First and					First and
				Second Preferred Shares					Second Units
		Microcell					Microcell					Microcell
		Pro Forma as at					Pro Forma as at					Pro Forma as at
		December 31, 2002		Pro Forma			December 31, 2002		Pro Forma			December 31, 2002
		Canadian GAAP		Adjustments			U.S. GAAP		Adjustments			U.S. GAAP
Current portion of long-term debt			7,500		—			7,500		—			7,500
Long-term debt:
	Senior Secured Term Loans		342,500		—			342,500		—			342,500
	First Units		—		—			—		176,500			176,500
	Second Units		—		—			—		148,834			148,834
Total long-term debt
(including current portion)			350,000		—			350,000		325,334			675,334
First and Second Preferred Shares			—		325,334			325,334		(325,334	)		—
Shareholders’ equity (deficiency)
Share capital and Warrants			368,996		(325,334	)		43,662		—			43,662

Other information regarding the Plan (unaudited)

(i)	The Plan should result in a forgiveness of indebtedness of approximately $1,100,000,000, for tax purposes, that is expected to reduce the Company’s non-capital losses by approximately $140,000,000 and capital losses by approximately $960,000,000.
	Management is under the assumption that non-capital losses of approximately $2,000,000,000 and the undepreciated capital costs of depreciable property of approximately $310,000,000 of the new subsidiary created pursuant to the Plan, as described in note 1(b), should be preserved. The losses will expire in the years 2003 through 2008. The use of these losses will generally be restricted in future years to profits from the Microcell and similar businesses. The amounts of these tax attributes and the expiration dates may vary, as they are dependent on the Plan and valuation matters. The tax benefits of the losses and net deductible temporary differences have not been recorded in the unaudited pro forma balance sheet of Microcell.
(ii)	The long-term debt after giving effect to the Plan consists of Senior Secured Term Loans, in the aggregate amount of $350,000,000 which are divided into Tranche B Debt and Tranche C Notes as follows:
	Term loan (Tranche B Debt) consisting of a Canadian dollar Series in the amount of $100,000,000 and a U.S. dollar Series with a principal amount equivalent to Canadian $200,000,000, bearing interest at the Tranche A Exit Facility’s rate plus 0.5%, payable in quarterly installments starting in June 2003 and maturing in December 2008. The Tranche B Debt will be collateralized by a second lien on all assets post-reorganization, subject to customary exceptions and covenants. Reimbursements of Tranche B Debt are as follows: 2.5% of the principal amount in 2003; 3.33% in 2004; 3.33% in 2005; 5% in 2006; 5% in 2007; and 80.84% in 2008.
	Tranche C Notes in the amount of $50,000,000, bearing interest at 8.0% paid semi-annually at the Company’s discretion (i) in cash; or (ii) accruing and compounding such interest semi-annually until paid, due on the tenth anniversary of the effective date of the Plan. Mandatory prepayments are as follows: amount remaining of any excess cash flow from operations and asset sales not previously applied (subject to customary exceptions), determined on an annual basis, to be applied first to pay accrued but unpaid interest and any balance to mandatory prepayments of principal, subject to maximum of 25% of principal amount in the aggregate (except as to major sales of assets) during the first five years. The Tranche C Notes will be collateralized by a third lien on all assets post-reorganization, subject to customary exceptions and covenants.
	In addition to the Tranche B Debt and the Tranche C Notes, the Company may borrow an amount between $25,000,000 and $75,000,000 as Tranche A Exit Facility in the form of a revolving credit loan with its terms to be negotiated with the lender(s) thereof. The Tranche A Exit Facility will be collateralized by a first lien on all assets post-effectiveness of the Plan, subject to customary exceptions and covenants.

94

1. DESCRIPTION OF BUSINESS AND REORGANIZATION (CONT’D)

(iii)	The authorized share capital after giving effect to the Plan would be as follows:
	An unlimited number of First Preferred Shares, issuable as First Preferred Voting Shares (convertible under certain conditions into First Preferred Non-Voting Shares or Class A Restricted Voting Shares) and First Preferred Non-Voting Shares (convertible under certain conditions into First Preferred Voting Shares or Class B Non-Voting Shares), with fixed, non-cumulative preferential dividends of 9% per annum, redeemable in cash at any time at the option of Microcell and mandatorily redeemable in cash or Class A Restricted Voting Shares and Class B Non-Voting Shares on the tenth anniversary of the effective date of the Plan, based on a redemption price equal to the issuance price per share plus a premium equivalent to the unpaid dividends;
	An unlimited number of Second Preferred Shares, issuable as Second Preferred Voting Shares (convertible under certain conditions into Second Preferred Non-Voting Shares or Class A Restricted Voting Shares) and Second Preferred Non-Voting Shares (convertible under certain conditions into Second Preferred Voting Shares or Class B Non-Voting Shares), with fixed, non-cumulative preferential dividends of 9% per annum, redeemable in cash at any time at the option of Microcell and mandatorily redeemable in cash or Class A Restricted Voting Shares and Class B Non-Voting Shares on the tenth anniversary of the effective date of the Plan, based on a redemption price equal to the issuance price per share plus a premium equivalent to the unpaid dividends;
	An unlimited number of Class A Restricted Voting Shares;
	An unlimited number of Class B Non-Voting Shares;
	2005 Warrants and 2008 Warrants;
	First Units consisting of (i) Subordinated Convertible 9% notes in an amount equal to the First Preferred Shares Redemption Price (with accrued and unpaid interest payable only at maturity) having the same terms and conditions as the First Preferred Shares (including as to the right to convert into Class A Restricted Voting Shares or Class B Non-Voting Shares and as to the application of Excess Cash Flow) and a term to maturity equal to the term to maturity of the First Preferred Shares (or remainder thereof, as the case may be) and (ii) a series of voting and non-dividend bearing First Preferred Shares or a series of non-voting and non-dividend bearing series of First Preferred Shares, as the case may be, redeemable at the redemption price of $0.0001 per share upon the repayment or the conversion of the notes related thereto. The First Units shall be senior in right of payment to the Second Units.
	Second Units consisting of (i) Subordinated Convertible 9% notes in an amount equal to the Second Preferred Shares Redemption Price (with accrued and unpaid interest payable only at maturity) having the same terms and conditions as the Second Preferred Shares (including as to the right to convert into Class A Restricted Voting Shares or Class B Non-Voting Shares and as to the application of Excess Cash Flow) and a term to maturity equal to the term to maturity of the Second Preferred Shares (or remainder thereof, as the case may be) and (ii) a series of voting and non-dividend bearing First Preferred Shares or a series of non-voting shares and non-dividend bearing series of Second Preferred Shares, as the case may be, redeemable at the redemption price of $0.0001 per share upon the repayment or the conversion of the notes related thereto. The Second Units shall be subordinate in right of payment to the First Units.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”), the more significant of which are outlined below. A reconciliation to accounting principles generally accepted in the United States (“U.S. GAAP”) and to the accounting principles and practices required by the United States Securities and Exchange Commission (“SEC”) is shown in note 20.

Use of estimates

The preparation of the Company’s consolidated 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 during the reporting period. Actual results could differ from those estimates.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Long-term investments

Consolidation

The consolidated financial statements include the results of operations of Microcell and all of its subsidiaries as well as its share of assets, liabilities, revenues and expenses of all joint ventures, if any, in which the Company participates. Intercompany transactions and balances are eliminated on consolidation.

Other

The Company accounts for investments in which it exercises significant influence using the equity method. Other investments are accounted for at cost. The investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and a provision for loss in value is recorded when a decline in value below the carrying amount is considered to be other than temporary.

Revenue recognition

Monthly access charges are billed in advance and recognized when the services are provided and collection is reasonably assured. Airtime charges are recognized as revenue when provided. Sales of handsets and related equipment are recognized when goods and services are delivered and collection is reasonably assured. Prepaid service revenues are deferred and recognized when services are provided. When prepaid airtime vouchers are sold to dealers, the revenue for the airtime is measured at the face value of the time sold, when services are provided. Commissions to dealers are classified within cost of products and services.

Advertising costs

Advertising costs are expensed as incurred.

Cash equivalents

Cash equivalents are short-term, highly liquid, held-to-maturity, investment-grade debt securities with maturities of 90 days or less from the date of purchase.

Short-term investments

Short-term investments consist of highly liquid, held-to-maturity, investment-grade debt securities, such as term deposits, commercial paper and similar instruments, with maturities greater than 90 days but not exceeding twelve months. Short-term investments are accounted for at the lower of cost and market value.

Marketable securities

Marketable securities are recorded at the lower of cost and fair market value.

Inventories

Inventories consist of handsets, Subscriber Identity Module (“SIM”) cards and accessories held for resale, and are stated at the lower of cost (on a first-in, first-out basis) and replacement cost.

Capital assets

Capital assets are recorded at cost. The PCS network includes direct costs such as equipment, material, labor, engineering, site development, interest incurred during the network buildout, depreciation of capital assets used in connection with the construction of the network, and overhead costs. The costs of PCS network construction in progress are transferred to the PCS network in service as construction projects are completed and put into commercial service. Depreciation starts when the assets are in service, and is provided on a straight-line basis over their estimated useful lives as follows:

PCS network–Switches	10years
PCS network–Base stations	5years
Computer hardware and software	3years
Application hardware and software	5years
Office furniture and equipment	5years
Leasehold improvements	Term of the related leases

The costs of maintenance and replacement of minor items of capital assets are charged to maintenance expense. Renewals and improvements are capitalized.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Intangible assets

Intangible assets consist of the Company’s PCS and MCS licenses. The Company has determined that both licenses have an indefinite useful life. Therefore no amortization is calculated but these intangible assets are tested for impairment on an annual basis. As disclosed in note 7, an impairment charge was recorded for the MCS licenses in 2002. The annual licensing fees are charged to expense as incurred.

Derivative instruments

Derivative financial instruments are utilized to reduce foreign currency and interest rate risk on the Company’s debt. The Company does not enter into financial instruments for trading or speculative purposes.

The Company’s policy is to formally designate each derivative financial instrument as a hedge of a specifically identified debt instrument. The Company believes the derivative financial instruments are effective as hedges, both at inception and over the term of the instrument, as the term to maturity, the principal amount and the interest rate basis in the instruments all match the terms of the debt instrument being hedged.

Interest rate swap agreements are used as part of the Company’s program to manage the fixed and floating interest rate mix of the Company’s total debt portfolio and related overall cost of borrowing. The interest rate swap agreements involve the periodic exchange of payments without the exchange of the notional principal amount upon which the payments are based, and are recorded as an adjustment of interest expense on the hedged debt instrument. The related amount payable to or receivable from counterparties is included as an adjustment to accrued interest.

Foreign currency swap agreements are used to manage exchange rate exposures relating to certain debt instruments denominated in foreign currencies. Foreign currency swap agreements are designated as hedges of firm commitments to pay interest and principal on the foreign currency denominated debt, which would otherwise expose the company to foreign currency risk. Translation gains and losses on the principal swapped are offset by corresponding translation losses and gains on the related foreign currency denominated debt.

Gains and losses on terminations of interest rate and foreign currency swap agreements or on termination of the Company’s designation of the hedging relationship are deferred under deferred gain or loss on financial instruments on the balance sheet and amortized as an adjustment to foreign exchange loss (gain) over the remaining term of the original contract life of the terminated swap agreement. In the event of early extinguishment of the debt obligation, any realized or unrealized gain or loss from the swap would be recognized in the consolidated statement of loss at the time of extinguishment.

Financing costs

The costs of obtaining debt financing are deferred and amortized over the life of the debt to which they relate. The costs of issuing equity are recorded as a reduction of the item to which they relate.

Stock option plans

The Company has stock option plans, which are described in note 12. No compensation expense is recognized for these plans when stock options are issued to employees. Any consideration paid by employees on exercise of stock options is credited to share capital.

Income taxes

The Company follows the liability method of accounting for income tax allocation. Under this method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities, and are measured using the substantively enacted tax rates and laws that are expected to be in effect in the periods in which the deferred income tax assets or liabilities are expected to be realized or settled. Deferred income tax assets, net of an appropriate valuation allowance, are recognized only to the extent that management believes it to be more likely than not that the assets will be realized.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Research and development

Research costs are charged against income in the year of expenditure. Development costs are charged against income in the year of expenditure unless a development project meets the criteria under Canadian generally accepted accounting principles for deferral and amortization.

Foreign currency

The Company’s currency of measurement (functional currency) is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at the period-end. Revenues and expenses denominated in foreign currencies are translated at the rates of exchange prevailing on the transaction dates. Realized and unrealized gains and losses on currency transactions are included in income as they arise.

Earnings (loss) per share

Basic and diluted earnings (loss) per share are calculated using the treasury stock method. Basic earnings (loss) per share is calculated using the weighted average number of Common Shares, Class A Non-Voting Shares, Class B Non-Voting Shares and the total number of initial warrants exercisable for little or no cash consideration outstanding at the end of the period as if the warrants had been converted at the beginning of the period. Diluted earnings (loss) per share are calculated taking into consideration the effect of the exercise of securities which have a dilutive effect. As outlined in note 13, the number of shares used in calculating both basic and diluted earnings (loss) per share was adjusted retroactively as a result of the rights offering completed in 2001.

Recent developments

The Canadian Institute of Chartered Accountants (“CICA”) recently issued Section 3063, Impairment of Long-Lived Assets. This Section establishes standards for the recognition, measurement and disclosure of the impairment of long-lived assets held for use. The new standard replaces requirements on the write-down of assets previously contained in Section 3061, Property, Plant and Equipment and is effective for 2004. The Company is currently assessing the new standards and the impact that adoption will have on its consolidated financial statements. Similar requirements were also issued in the United States under Statement of Financial Accounting Standard No. 144.

In November 2001, the CICA issued Accounting Guideline 13, Hedging Relationships (“AcG-13”). AcG-13 establishes new criteria for hedge accounting and will apply to all hedging relationships in effect for the Company’s fiscal year commencing on September 1, 2003 under Canadian GAAP. To qualify for hedge accounting, consistent with U.S. GAAP, 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 flows between the hedged item and the hedge. The Company currently documents all hedging relationships on an ongoing basis.

3. CHANGE IN CANADIAN ACCOUNTING POLICIES

Revenue recognition

Effective January 1, 2002, the Company adopted, for both Canadian and U.S. GAAP, on a retroactive basis, the provisions set forth in the Financial Accounting Standards Board’s Emerging Issues Task Force (the “Task Force”) issue 01-9 Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products (EITF 01-9). The consensus reached by the Task Force indicates that a cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor’s products or services and, therefore, should be accounted for as a reduction of revenues. Previously, these considerations were presented as marketing expenses with the corresponding amount as revenues. For the years ended December 31, 2002, 2001 and 2000, the impact of the change was to reduce operating revenues and selling and marketing expenses for the PCS operating segment by $20,941,000, $19,347,000 and $22,827,000 respectively. The adoption of EITF 01-9 did not have an effect on the Company’s net loss, operating measures or cash flows.

98

3. CHANGE IN CANADIAN ACCOUNTING POLICIES (CONT’D)

Stock-based compensation and other stock-based payments

Effective January 1, 2002, the Company adopted the standard set forth in Section 3870 of the CICA Handbook entitled Stock-based Compensation and Other Stock-based Payments. As permitted by Section 3870, the Company has applied this change prospectively for new stock options granted on or after January 1, 2002. The Company has chosen to recognize no compensation when stock options are granted to employees and directors under stock option plans with no cash settlement features. Direct awards of stock to employees and stock and stock option awards granted to non-employees are accounted for in accordance with the fair value method of accounting for stock-based compensation. No such awards were granted in 2002. The fair value of direct awards of stock is determined by the quoted market price of the Company’s stock on the grant date, and the fair value of stock options is determined using the Black-Scholes option pricing model. In periods prior to January 1, 2002, the Company recognized no compensation when stock or stock options were issued. Pro forma information regarding net income is required and has been determined as if the Company had accounted for its employee stock options under the fair value method (see note 12).

Goodwill and other intangible assets

Intangible assets consist of the Company’s PCS and MCS licenses. Effective January 1, 2002, the Company adopted the new standard set forth in Section 3062 of the Canadian Institute of Chartered Accountants’ (CICA) Handbook entitled Goodwill and Other Intangible Assets, to be applied on or after January 1, 2002. Under the new standard, goodwill and other indefinite-life intangible assets are no longer amortized but tested for impairment on an annual basis. The excess of the carrying amount over the fair value is charged to earnings. The Company has determined that the PCS license it has been awarded has an indefinite useful life. Therefore, pursuant to Section 3062 of the CICA Handbook, the Company will not amortize this PCS license until it determines that the PCS license has a finite life. The impact on the consolidated financial statements has been a reduction of the annual amortization of the PCS license in the amount of $140,000. As disclosed in note 7, an impairment charge was recorded for the MCS licenses in 2002. The annual licensing fees are charged to expense as incurred.

Foreign exchange gains and losses

Effective in 2001, the Company has retroactively adopted the new accounting recommendations with respect to accounting for foreign exchange gains or losses on monetary items and non-monetary items carried at market that have a fixed or ascertainable life extending beyond the end of the following year. Previously, these gains and losses were deferred and amortized on a straight-line basis over the term of the related items. The new recommendations require that these gains and losses be included in the determination of net income as they arise. This change in accounting policy has been applied retroactively and has had the following impact on the financial statements: For 2001, total assets decreased by $16,584,000, deficit increased by $16,584,000, and loss per share increased by $0.01. For 2000, total assets decreased by $15,331,000, deficit increased by $15,331,000, and loss per share increased by $0.19.

4. SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES

	2002		2001
	$		$
Short-term investments		83,181		158,443
Marketable securities		164		1,081
		83,345		159,524

During 2002, the Company reduced the value of its marketable securities to their net estimated realizable value. Accordingly, non-cash charges of $343,000 were recorded in 2002 ($5,066,000 in 2001 and $225,716,000 in 2000).

5. RECEIVABLES

	2002			2001
	$			$
Trade receivables		83,814			95,587
Allowance for doubtful accounts		(14,885	)		(10,717	)
Taxes receivable		2,866			211
Interest receivable		18			892
		71,813			85,973

Bad debt expenses for the twelve months ended December 31, 2002 amounted to $32,306,000 ($16,133,000 for 2001 and $11,297,000 for 2000).

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6. CAPITAL ASSETS

		2002					2001
					Accumulated					Accumulated
		Cost			depreciation		Cost			depreciation
		$			$		$			$
							(Restated - note 3)
PCS network Switches			533,511			199,433		474,994			124,984
	Base stations		608,894			400,190		572,820			302,989
Computer hardware and software			26,426			22,432		26,444			18,609
Application hardware and software			198,215			110,413		171,027			61,522
Office furniture and equipment			32,588			23,196		31,250			18,338
Leasehold improvements			26,912			15,236		24,055			10,100
			1,426,546			770,900		1,300,590			536,542
Accumulated depreciation			(770,900	)				(536,542	)
Net carrying value			655,646					764,048

The PCS network includes both PCS network construction in progress, amounting to $1,036,000 in 2002 ($10,867,000 in 2001), and PCS network in service.

During 2002, the Company wrote down the value of certain of its capital assets to their net recoverable amount. Accordingly, the depreciation and amortization for the year ended December 31, 2002 included write-downs of $31,351,000 related to the network and application software in the PCS segment and $5,940,000 related to the portal in the Wireless Internet segment.

7. INTANGIBLE ASSETS

	2002		2001
	$		$
PCS Licenses		2,727		2,727
MCS Licenses		—		223,399
		2,727		226,126

In 2001, the Company acquired for $150,000,000 the 50% share in Inukshuk owned by Look Communications Inc., a company controlled, at that time, by a major shareholder of Microcell. This brought the Company’s total ownership interest in Inukshuk to 100%. The only asset in Inukshuk is a License for spectrum in the 2500 MHz range from Industry Canada (the “MCS Licenses”) that can be used to build a high-speed Internet protocol-based data network using MCS technology in 12 out of 13 regional service areas across Canada. However, the current challenging capital market conditions, which have made raising financing difficult, Inukshuk has suspended building the MCS network on its own for the time being. The estimated deferred tax liabilities related to the MCS Licenses, in the amount of $72,896,000, resulting from the difference between the carrying value and the tax basis of the asset acquired, was included in the cost of the MCS Licenses.

In the second quarter of 2002, the Company wrote down the value of the MCS licenses to nil. Accordingly, a non-cash expense affecting the Wireless Internet segment in the amount of $223,399,000 has been recorded in 2002. A related deferred income tax recovery of $72,896,000 was also recorded.

8. LONG-TERM INVESTMENTS

	2002		2001
	$		$
Long-term investments, at equity		9,898		24,051
Long-term investments, at cost		773		10,932
		10,671		34,983

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8. LONG-TERM INVESTMENTS (CONT’D)

The Company, through Microcell Capital, has long-term investments accounted for at equity and at cost. The Company has committed to invest, in the form of a subscription for units, U.S.$10,000,000 in Argo II: the Wireless Internet Fund Limited Partnership (“Argo II”) and, as of December 31, 2002, U.S.$5,500,000 had been paid (U.S.$4,500,000 as at December 31, 2001). During 2002, the Company was asked to contribute an additional U.S.$500,000, as part of its original commitment. The Company asked for a grace period to pay its capital contribution and Argo II’s general partner agreed to postpone the payment until the end of the Company’s recapitalization. This investment has been reduced to its estimated fair value of nil as at December 31, 2002.

In light of management estimates and based on the decline in market conditions for high-technology companies during 2002, the Company reduced the value of certain other investments to their net estimated realizable value. Accordingly, non-cash charges of $11,805,000 were recorded in 2002 ($28,027,000 in 2001 and $22,620,000 in 2000). In addition, the Company recorded its share of net income (loss) in its equity investments, resulting in net losses of $13,212,000 and $5,282,000 in 2002 and 2001 respectively, and net income of $20,573,000 in 2000.

During 2000, the Company sold its equity investment in saraide.com inc. (“Saraide”) to InfoSpace and received in exchange 2,281,326 InfoSpace shares (stock-split adjusted) and an interest of 4.3% in the new company created by InfoSpace following this transaction (“Saraide, Inc.”), recorded at-cost by the Company. The resulting gain of $291,942,000, net of income taxes, and the corresponding deferred tax liabilities of $108,653,000, were recorded at the time of the transaction. With respect to benefits from previously unrecognized losses and temporary differences, a corresponding tax asset of $108,653,000 was also recognized. Following this transaction, 961,894 InfoSpace shares were sold in 2000, at an average price of U.S.$61.19, resulting in a loss on disposal of $6,835,000.

9. DEFERRED CHARGES AND OTHER ASSETS

	2002		2001
	$		$
Deferred financing costs		—		8,300
Derivative instruments		—		25,029
Other		1,664		11,281
		1,664		44,610

In conjunction with the new Tranche F of the senior secured term loans (see note 11), the Company paid, in 2002, $19,742,000 of financing costs which are being deferred and amortized over the term of the loan.

On July 15, 2002, the Company decided to unhedge the 2009 Notes and de-designate, for accounting purposes, the cross-currency swap on the principal balance of the 2009 Notes in the amount of U.S.$270,000,000. On that day, the Company terminated U.S.$220,000,000 of the U.S.$270,000,000 hedging agreements, generating net proceeds of $28,914,000 and a deferred gain of $17,778,000. A deferred gain of $3,298,000 was also generated on the remaining cross-currency swap (U.S.$50,000,000). These deferred gains are being amortized over the remaining life of the 2009 Notes.

In November 2002, the Company terminated U.S.$20,000,000 of the remaining U.S.$50,000,000 cross-currency hedging agreements and its two interest rate swaps on Tranches C and D of the senior secured loans. These terminations generated net proceeds of $1,957,000, a deferred loss on the interest rate swaps of $2,398,000, which is being amortized over the remaining life of the senior secured loans covered by the hedging agreements and a gain on financial instruments of $2,267,000 on the cross-currency swap representing the appreciation in the fair market value of this swap since the date of its de-designation. In December 2002, all the remaining hedging agreements of the Company (U.S.$30,000,000 cross-currency swap and its two interest rate swaps on Tranches A and B of the senior secured loans) were terminated and generated a net payable to the counterparties of $9,370,000, a deferred loss on the interest rate swaps of $15,600,000 which is being amortized over the remaining life of the senior secured loans covered by the hedging agreements and a gain on financial instruments of $3,193,000 on the cross-currency swap representing the appreciation in the fair market value of this swap since the date of its de-designation.

The net gain on financial instruments of $6,570,000 includes the gains mentioned above as well as the amortization of the deferred gains generated by the appreciation in the fair market value of the cross-currency swap before its de-designation as a hedging instrument ($1,404,000) and to the amortization of the deferred losses generated by the termination of the interest rate swaps ($294,000).

101

9. DEFERRED CHARGES AND OTHER ASSETS (CONT’D)

The Company wrote down $18,915,000 of deferred financing costs, $17,704,000 of deferred loss on financial instruments and $19,672,000 of deferred gain on financial instruments for a net total of $16,947,000 all of which related to the long-term debt in default (see note 1).

In addition, the Company wrote down $3,938,000 of deferred charges with respect to certain development projects.

10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES – OTHER

	2002		2001
	$		$
Accrued interest		64,055		8,283
Accounts payable – trade		33,135		29,993
Accounts payable – capital assets		5,858		11,264
Wages and benefits		11,355		26,919
Provisions and others		17,903		29,875
		132,306		106,334

3. LONG-TERM DEBT

	2002			2001
	$			$
Senior Secured Term Loans		590,048			504,403
Series B Senior Discount Notes due 2006, interest payable semi-annually beginning June 1, 2002		659,394			665,747
Series A and B Senior Discount Notes due 2007, interest payable semi-annually beginning April 15, 2003		429,443			385,383
Series B Senior Discount Notes due 2009, interest payable semi-annually beginning December 1, 2004		357,638			321,364
Other		3,655			26,674
		2,040,178			1,903,571
Less current portion of principal		(7,500	)		(16,523	)
		2,032,678			1,887,048

The details on the Company’s long-term debt and contractual repayments as at December 31, 2002 and 2001 are disclosed without taking into consideration the Plan as discussed in note 1, except that the current portion of long-term debt is equivalent to the current portion of the new debt contracted on the implementation date of the plan.

The minimum contractual payments of long-term debt for the next five years are as follows: $59,882,000 in 2003; $68,575,000 in 2004; $81,325,000 in 2005; $948,396,000 in 2006; and $520,707,000 in 2007.

Senior Secured Loans

The Senior Secured Loans are divided into Senior Secured Revolving Credit Loans and Senior Secured Term Loans as follows:

Senior Secured Revolving Credit Loans

In conjunction with the senior secured lenders’ approval of the Plan (see note 1), the senior secured lenders and the Company mutually agreed, in December 2002, to terminate the senior secured revolving credit facility.

102

11. LONG-TERM DEBT (CONT’D)

Senior Secured Term Loans

Tranche A
Term Loan of $151,200,000, bearing interest at the prime rate plus 1% (1.5% in 2001) or Bankers’ Acceptance rate plus 2% (2.5% in 2001), payable in quarterly installments starting in June 2002 and maturing in December 2005. The floating interest rate was swapped to a fixed rate of 5.65% on $75,600,000 of the principal outstanding until December 2005. On the remaining balance of $75,600,000, the Company has swapped the floating interest to a fixed range of rates (4.83% to 5.93%). As at December 31, 2002, these hedging agreements are terminated (see note 9).

Tranche B
Term Loan of U.S.$50,923,411, bearing interest at the U.S. base rate plus 2% or the U.S. LIBOR rate plus 3%, payable in quarterly installments starting in June 2002 and maturing in March 2006. The floating interest rate was swapped on the full amount to a fixed rate of 5.87% to March 1, 2006. As at December 31, 2002, this hedging agreement is terminated (see note 9).

Tranche C
Term Loan of $18,800,000 bearing interest at the prime rate plus 1% (1.5% in 2001) or Eurocanadian plus 2% (2.5% in 2001), payable in quarterly installments starting in June 2002 and maturing in December 2005. The floating interest rate was swapped on the full amount to a fixed rate of 5.6% to December 30, 2005. As at December 31, 2002, this hedging agreement is terminated (see note 9).

Tranche D
Term Loan of $34,200,000, bearing interest at the prime rate plus 1% (1.5% in 2001) or Eurocanadian plus 2% (2.5% in 2001), payable in quarterly installments starting in September 2002 and maturing in December 2005. The floating interest rate was swapped on the full amount to a fixed rate of 5.63% to December 30, 2005. As at December 31, 2002, this hedging agreement is terminated (see note 9).

Tranche E
Term Loan of U.S.$137,551,000, bearing interest at the U.S. base rate plus 2.25% or the U.S. LIBOR rate plus 3.25%, payable in quarterly installments starting in June 2002 and maturing in March 2006.

Tranche F
Term Loan of U.S.$62,920,783, bearing interest at the U.S. base rate plus 2.5% or the U.S. LIBOR rate plus 3.5%, payable in quarterly installments starting in March 2003 and maturing in February 2007.

As of December 31, 2002 and 2001, the full amounts were drawn on all Tranches of the Senior Secured Term Loans. Contractual repayments of Tranches A, B, C, D, E and F up to 2007 are as follows:

Tranches

	A			B		C			D			E		F
	% of principal			Equivalent to		% of principal			% of principal			Equivalent to		Equivalent to
	amount			C$		amount			amount			C$		C$
2003		25.0	%		750		25.0	%		20.0	%		2,000		2,000
2004		30.0	%		750		30.0	%		37.5	%		2,000		2,000
2005		37.5	%		750		37.5	%		37.5	%		2,000		2,000
				Balance								Balance
2006		—		outstanding			—			—		outstanding			2,000
														Balance
2007		—			—		—			—			—	outstanding

The Senior Secured Loans are collateralized by debentures of $1,100,000,000, issued by Microcell Telecommunications Inc., Microcell Solutions Inc., and Microcell Connexions Inc. under trust deeds. The debentures are collateralized by a first ranking security interest in all property and assets of these companies.

103

11. LONG-TERM DEBT (CONT’D)

As of December 31, 2002 and 2001, the interest and foreign exchange rates were as follows:

	2002		2001
	%		%
Prime rate		4.50		4.00
Bankers’ Acceptance rate		2.84		2.07
U.S. base rate		4.25		4.75
U.S. LIBOR rate		1.38		1.88
Eurocanadian rate		2.83		2.10
Closing exchange rate in U.S. dollars per C$1.00		0.6339		0.6278

Senior Discount Notes

Series B Senior Discount Notes due 2006

The unsecured Senior Discount Notes due 2006 consist of 417,973 Units, each Unit consisting of U.S.$1,000 at maturity, 14% Series B Senior Discount Notes due on June 1, 2006 and four initial warrants each to purchase 2.1899 Class B Non-Voting Shares for gross proceeds of $273,321,000 (U.S.$200,000,081).

Series A and Series B Senior Discount Notes due 2007

The unsecured Senior Discount Notes due 2007 consist of $429,443,000, 11 1/8% Series A and B Senior Discount Notes due on October 15, 2007, for gross proceeds of $250,000,000.

Series B Senior Discount Notes due 2009

The unsecured Senior Discount Notes due 2009 consist of U.S.$270,000,000, 12% Series B Senior Discount Notes due on June 1, 2009, for gross proceeds of $221,196,000 (U.S.$150,473,700). The Company entered into a cross-currency swap agreement to manage its exposure to foreign exchange rate fluctuations on the principal at a rate of 1.47. The duration of the cross-currency swap corresponded to that of the Senior Discount Notes due 2009. The cross-currency swap agreement was secured by the debentures issued to secure the Senior Secured Loans. As at December 31, 2002, this hedging agreement is terminated (see note 9).

Interest and redemption rights

The Senior Discount Notes were sold at a substantial discount from their principal amount, and cash interest started to accrue on December 1, 2001 for the Senior Discount Notes due in 2006, on October 15, 2002 for the Senior Discount Notes due in 2007 and will begin to accrue on June 1, 2004 for the Senior Discount Notes due in 2009.

On or after specific dates, the Company may redeem the Senior Discount Notes, in whole or in part, at any time, at the following redemption prices (expressed as percentages of principal amounts at maturity) plus accrued and unpaid cash interest, if any, to the redemption date, if redeemed during the twelve-month period beginning on the redemption starting date of each year set forth in the following table:

Senior Discount Notes Due	2006		2007		2009
Redemption Date	December 1		October 15		June 1
	%		%		%
2003		102.333		102.781		—
2004		100.000		100.000		108.000
2005		100.000		100.000		107.000
2006		100.000		100.000		106.000
2007		—		100.000		105.000
2008 and 2009		—		—		100.

Covenants

Under the long-term debt agreements discussed above, the Company is committed to respect certain negative covenants, including restrictions on the ability to incur certain indebtedness, incur additional capital expenditures, pay dividends, make certain other payments, create liens, sell assets and engage in mergers. The Company must also maintain certain financial covenants and ratios, including debt and capital ratios, EBITDA levels, as defined, and subscriber and revenue levels.

104

11. LONG-TERM DEBT (CONT’D)

As of December 31, 2002 the Company was not in compliance with certain of these covenants and as such all the long-term debt is in default (see note 1).

4. SHARE CAPITAL

Authorized

Unlimited number of Common Shares, each of which may, at any time, at the holder’s option, be converted into one Class B Non-Voting Share or into one Class A Non-Voting Share, if necessary, to comply with the restrictions on non-Canadian ownership and control.

Unlimited number of participating Class A Non-Voting Shares, each of which may, at any time, at the holder’s option, be converted into one Class B Non-Voting Share or into one Common Share, to the extent that the Company does not cease to comply with the restrictions on non-Canadian ownership and control as a result.

Unlimited number of participating Class B Non-Voting Shares.

Unlimited number of Non-Voting First Preferred Shares issuable in one or more series.

Issued and paid

	Common						Class A						Class B
	Shares						Non-Voting Shares						Non-Voting Shares				Total
	Number			$			Number			$			Number		$		$
Balance as of December 31, 1999		32,780,071			87,698			—			—			22,141,195		239,901		327,599
Issued		—			—			9,755,001			395,066			242,043		1,837		396,903
Converted		(1,114,796	)		(3,023	)		(165,001	)		(589	)		1,279,797		3,612		—
Exercise of warrants		—			—			—			—			497,607		3,548		3,548
Balance as of December 31, 2000		31,665,275			84,675			9,590,000			394,477			24,160,642		248,898		728,050
Issued		—			—			60,496			191			174,696,663		439,130		439,321
Converted		(4,033,738	)		(10,787	)		(60,496	)		(191	)		4,094,234		10,978		—
Exercise of warrants		—			—			—			—			—		—		—
Balance as of December 31, 2001		27,631,537			73,888			9,590,000			394,477			202,951,539		699,006		1,167,371
Issued		—			—			—			—			—		—		—
Converted		—			—			—			—			—		—		—
Exercise of warrants		—			—			—			—			43,372		307		307
Balance as of December 31, 2002		27,631,537			73,888			9,590,000			394,477			202,994,911		699,313		1,167,678

In January 2001, Microcell completed a public offering of 2,032,659 Class B Non-Voting Shares, and its two major shareholders concurrently purchased a further 1,671,045 Class B Non-Voting Shares, at the offering price. This offering generated net proceeds of $97,100,000.

In November 2001, Microcell issued rights, to all existing Common shareholders, Class A Non Voting shareholders, Class B Non-Voting shareholders and warrants holders, to subscribe for an aggregate of 122,955,459 Class B Non-Voting Shares at the offering price of $2.05 per share. Concurrently with this offering, two major financial institutions acquired, by way of a private placement, 30,000,602 Class B Non-Voting Shares, at the offering price, and Microcell’s major shareholders purchased a further 18,032,012 Class B Non-Voting Shares, also at the offering price. The offering generated net proceeds of approximately $244,000,000. In addition, the options to acquire 30,000,602 and 18,032,012 Class B Non-Voting Shares were exercised, generating additional net proceeds of approximately $98,000,000. These options have a fair value of $33,528,878 and were accounted for at issuance as issue fees and were presented as a reduction of share capital and an increase in paid-in capital. On exercise of the options, the additional paid-in capital was transferred to share capital.

105

12. SHARE CAPITAL (CONT’D)

Employee stock purchase plan

The Company has a stock purchase plan for its employees under which participants can contribute up to 10% of their salary. Microcell makes a contribution in shares for the benefit of the participant equal to one-third the number of shares purchased with the participant’s contribution during the year (up to 5% of the participant’s salary). Microcell’s contribution is executed only if, on the measurement date (which, for each year, is June 30 of the following year), the participant is still an employee of the Company and still holds the shares purchased with their contributions during the year. Microcell may choose to make its contribution in treasury shares (250,000 Class B Non-Voting Shares have been reserved for issuance) or to deposit with the Administrative Agent a sufficient amount of money to enable the Administrative Agent to purchase the appropriate number of shares in the market. As of December 31, 2002, 4,886 of the reserved shares (4,886 in 2001) were issued under this stock purchase plan. Under the Plan described in note 1, this plan will be cancelled.

Stock option plans

On October 6, 1997, the Board of Directors of Microcell established a stock option plan for employees, officers and directors of the Company, as designated by the Board of Directors. As at December 31, 2002, the stock option plan authorizes the issuance of up to 19,000,000 class B non-voting shares of Microcell pursuant to options granted under the stock option plan (5,900,000 as of December 31, 2001). The Board may amend, supersede or terminate the stock option plan.

The stock option plan is administered by the Board, which has sole discretion to designate the recipients of options and to determine the number of class B non-voting shares of Microcell covered by each of such options, the date of grants and the subscription price of each option. Any options granted under stock option plan before July 1, 2001 shall become exercisable in whole or in part as to 25% of the option on each of the second, third, fourth and fifth anniversary of the date of the grant. Any options granted under the stock option plan after July 1, 2001 shall become exercisable in whole or in part as to 25% of the option on each of the first, second, third and fourth anniversary of the date of the grant. An option granted under the stock option plan expires on the seventh anniversary of the date of the grant and is non-transferable. Each participant in the stock option plan may receive no more than one grant of class B non-voting shares of Microcell per year not exceeding a defined number determined by the Board.

The stock option plan replaces the stock option plan for senior executives and key employees adopted on June 23, 1994 (the “Predecessor Plan”), but does not revoke options to purchase Class A Non-Voting Shares of Microcell granted thereunder. The Predecessor Plan is subject to an undertaking of the recipients not to convert the Class A Non-Voting Shares acquired pursuant thereto into Common Shares until Microcell’s Common Shares are listed on a stock exchange, or until there is an offer to purchase more than 50% of the Common Shares and the holders of the Common Shares have signified their intention to accept such a takeover bid. All options were granted at an exercise price equivalent to the estimated fair value of the underlying shares at the date of the grant. During 2001, certain options were granted with the guarantee that they would reach a certain value. Such options were cancelled in 2002. Consequently, the Company no longer has a contingent liability under such options.

Pro forma information regarding net income is required and has been determined as if the Company had accounted for its employee stock options under the fair value method. The fair value for these options was estimated at the date of granting using a Black-Scholes option pricing model with the following assumptions for 2002: weighted-average risk-free interest rates of 3.0% (3.0% in 2001); dividend yields of 0% (0% in 2001); weighted-average volatility factors of the expected market price of the Company’s Class B Non-Voting Shares of 107.9% (89.8% in 2001); and a weighted-average expected life of the options of 5.5 years (5.5 years in 2001). For purposes of pro forma disclosures, the estimated fair value of the options at the grant date is amortized to expense over the options’ vesting periods.

Considering all options issued since the beginning of the Company’s stock option plans, the Company’s pro forma net loss would be increased by $2,228,000, $6,155,000 and $2,477,000 for the years ended December 31, 2002, 2001 and 2000 respectively. Basic and diluted loss-per-share figures would be increased by $0.01, $0.06 and $0.03 respectively.

Under the Plan described in note 1, this plan will be cancelled.

106

12. SHARE CAPITAL (CONT’D)

A summary of the status of the Company’s stock option plans as of December 31, 2002 and 2001, and changes during these years are presented below:

	Options to purchase					Options to purchase
	Class A Non-Voting Shares					Class B Non-Voting Shares
	Number			Weighted-average		Number			Weighted-average
	of			exercise price		of			exercise price
	options					options
				(in dollars)					(in dollars)
Balance as of December 31, 2000		150,507			7.49		1,844,800			23.01
Granted		—			—		5,872,296			5.93
Exercised		(60,496	)		3.19		—			—
Forfeited		(1,029	)		10.40		(164,764	)		25.34
Balance as of December 31, 2001		88,982			10.40		7,552,332			9.68
Granted		—			—		386,663			0.88
Exercised		—			—		—			—
Cancelled		—			—		(1,024,109	)		2.80
Forfeited		(23,281	)		10.40		(2,178,233	)		11.09
Balance as of December 31, 2002		65,701			10.40		4,736,653			9.80

The following table summarizes information about stock options outstanding as of December 31, 2002:

	Options Outstanding						Options Exercisable
	Number		Weighted-		Weighted-				Weighted-
	outstanding as of		average		average		Number		average
Range of	December 31,		remaining		exercise		exercisable as of		exercise
exercise prices	2002		life		price		December 31, 2002		price
Class A Non-Voting Shares
$10.00 to 11.00		65,701		0.7 year		10.40		65,701		10.40
Class B Non-Voting Shares (in dollars)
$0.55 to $1.99		305,685		6.4 years		0.55		—		—
$2.00 to 4.00		2,258,124		6.0 years		3.07		985,696		3.09
$11.00 to 13.00		1,014,546		5.3 years		11.52		300,048		11.49
$13.01 to 16.00		680,164		2.5 years		13.72		531,232		13.72
$28.00 to 39.00		235,744		5.0 years		33.56		44,244		30.84
$40.00 to 49.00		242,390		4.7 years		42.89		67,058		43.08
$0.55 to $49.00		4,736,653		5.3 years		9.80		1,928,278		9.35

Warrants

	2002			2001
	$			$
115,700 initial warrants (135,700 in 2001)		1,844			2,163
Issue costs		(74	)		(86	)
		1,770			2,077

The warrants issued as part of the Units described in note 11 expire in June 2006. The initial warrants are each exercisable for 2.1899 Class B Non-Voting Shares at an exercise price of U.S.$0.01 per share. During the year, 20,000 warrants were exercised and resulted in the net issuance of 43,372 Class B Non-Voting Shares (nil in 2001).

107

13. LOSS PER SHARE

The rights issue completed in 2001 contained a bonus element and was offered to all existing shareholders. As a result, basic and diluted loss per share were adjusted retroactively for all periods presented in order to reflect the bonus element. Consequently, the number of shares used in computing basic and diluted loss per share for all periods presented prior to the rights issue is the weighted-average number of shares outstanding for those periods, multiplied by a factor of 1.5035.

The reconciliation of the numerator and denominator for the calculation of loss per share is as follows:

	2002		2001		2000
	$		$		$
Net loss		570,501		498,485		268,427
Weighted-average number of shares outstanding		240,204		108,915		63,724
Shares issuable pursuant to exercise of initial warrants		253		297		291
Number of shares for basic loss per share calculation		240,457		109,212		64,015
Adjustment factor		—		—		1.5035
Adjusted number of shares for basic loss per share calculation		240,457		109,212		96,247
Additional shares for diluted loss per share calculation		—		3,312		997
Adjusted number of shares for diluted loss per share calculation		240,457		112,524		97,244
Basic and diluted loss per share (dollars)		2.37		4.56		2.79

Basic and diluted losses per share are identical, as the effect of the dilutive securities are antidilutive.

14. RELATED PARTY TRANSACTIONS

In addition to the related party transactions disclosed elsewhere in these financial statements, the Company has entered into transactions with shareholders, companies under common control, joint ventures and equity-accounted companies. These transactions are undertaken in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. These transactions consist primarily of the purchase or sale by the Company of engineering, telecommunications, development and management services or equipment. The effect on the consolidated financial statements is as follows:

	2002		2001		2000
	$		$		$
Costs capitalized to capital assets and deferred charges		—		5,165		5,122
Cost of products and services		3,007		6,965		4,117
General and administrative services		304		562		507
Selling and marketing		—		225		—
Equipment sales and service revenues		4,698		5,470		1,940
Equipment purchase		224		192		—
Net gain on asset disposal		—		—		860
Interest revenue		—		—		89

15. RESTRUCTURING CHARGES

In 2002, the Company laid off approximately 350 employees (approximately 200 in 2001) to adjust its work force to the requirements of its operating plan. The restructuring charges of $7,494,000 recorded in 2002 ($5,226,000 in 2001) relate primarily to severance payments to the employees laid off. These measures were the result of increased productivity from the consolidation of certain administrative and operating support services, and the suspension of certain projects due to difficult financial market conditions.

As at December 31, 2002, the remaining balance of the restructuring provision was $1,036,000 ($2,314,000 as at December 31, 2001). This provision is comprised of unpaid severance payments to employees laid off.

108

16. INCOME TAXES

Significant components of the income tax benefit consist of the following:

	2002			2001			2000
	$			$			$
Current income tax expense before the following:		80,484			40,101			6,676
Tax benefit of previously unrecognized losses and temporary differences		(78,860	)		(37,857	)		(5,223	)
Current income tax expense		1,624			2,244			1,453
Deferred income tax recovery related to reversal of temporary differences		(73,519	)		(3,966	)		—
Deferred income tax recovery of previously unrealized losses and temporary differences		—			—			(116,968	)
Income tax benefit		(71,895	)		(1,722	)		(115,515	)

     The reconciliation of income tax computed at the statutory tax rates to the income tax benefit is as follows:

	2002			2001			2000
	$			$			$
Income tax benefit based on the combined statutory income tax rate of 32% (33% in 2001 and 37.5% in 2000)		(205,567	)		(165,068	)		(143,978	)
Tax effect of acquired assets		—			—			(71,384	)
Non-taxable portion of capital items		3,665			14,596			(28,926	)
Unrecognized tax benefits of losses and temporary differences		210,063			187,376			130,744
Tax benefit of previously unrecognized losses and temporary differences		(78,860	)		(37,857	)		(5,223	)
Large corporations tax		1,624			2,244			1,453
Other		(2,820	)		(3,013	)		1,799
Income tax benefit		(71,895	)		(1,722	)		(115,515	)

As of December 31, 2002, the Company had net operating losses carried forward for income tax purposes that expire as follows: 2003, $98,000,000; 2004, $211,500,000; 2005, $217,800,000; 2006, $57,900,000; 2007, $266,000,000; 2008, $288,000,000; 2009, $364,000,000. In addition, the Company had approximately $760,000,000 of deductible temporary differences.

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2002 are as follows:

	2002			2001			2000
	$			$			$
Deferred income tax liabilities:
Accounting values of capital assets in excess of tax values		—			84,347			9,530
Accounting values of marketable securities and investments in excess of tax values		—			—			20,599
Deferred charges and other		873			4,646			3,223
Total deferred income tax liabilities		873			88,993			33,352
Deferred income tax assets:
Tax values of marketable securities and investments in excess of accounting values		4,568			952			—
Operating losses carried forward		481,105			416,288			411,300
Tax values of capital assets in excess of accounting values		162,806			147,507			112,711
Provisions and other temporary differences		83,576			71,975			52,443
Total deferred income tax assets		732,055			636,722			576,454
Valuation allowance		(731,182	)		(621,248	)		(547,691	)
Net deferred income tax assets		873			15,474			28,763
Net deferred income tax liabilities		—			73,519			4,589

109

17. COMMITMENTS

In addition to the commitments disclosed elsewhere in these financial statements, the aggregate minimum annual payments under operating leases related to sites, switch rooms, offices and stores are as follows:

	$
2003		30,472
2004		28,058
2005		24,313
2006		17,467
2007		14,238
Subsequent to 2007		40,563
		155,111

Rental expenses for the twelve months ended December 31, 2002 amounted to $29,682,000 ($29,540,000 for 2001 and $23,258,000 for 2000). As of December 31, 2002, the Company had outstanding letters of guarantee for an aggregate amount of $4,337,000 ($1,175,000 as of December 31, 2001).

By letter dated March 29, 2001, Industry Canada renewed the Company’s PCS License for a term of five years expiring on March 31, 2006. The conditions attached to the renewed term of the PCS License remained unchanged from those of the initial term. However, Industry Canada also indicated as part of the PCS License renewal its intention to initiate a review of the cellular and PCS license terms, fees and conditions. Industry Canada has the power to make amendments to the existing terms and conditions of license and fee structure.

The existing PCS License conditions require Connexions to: (i) substantially meet the deployment plan contained in its initial license application and offer a reasonable level of service in all regions of Canada; (ii) substantially honor the research and development commitments made in its initial license application, and at a minimum invest an average of 2% of adjusted gross revenue from its PCS activities on PCS-related research and development, as defined by Revenue Canada, averaged over the course of the PCS License term; (iii) substantially honor all other commitments made in its detailed application; (iv) comply with the Canadian Ownership and Control Provisions and notify the Minister of any change that would materially affect its ownership or control in fact, such notice to be given in advance for transactions known to the Company; (v) submit annual reports indicating, among other things, continued compliance with the PCS License conditions; (vi) from the inception of service, provide for and maintain lawful interception capabilities as authorized by law, unless forborne from so doing; (vii) comply with the transition policy and relocation procedure for the relocation of incumbent microwave stations; (viii) offer PCS resale throughout its service area to PCS licensees on a non-discriminatory basis; (ix) comply with the provisions set out in the Interim Sharing Agreement between Industry Canada and the Federal Communications Commission of the United States concerning the use of the 2 GHz frequency range; and (x) obtain site specific authority prior to installing or operating any 2 GHz PCS base station. As at December 31, 2002, the Company is in compliance with the PCS License conditions.

18. FINANCIAL INSTRUMENTS

Credit risk

The concentration of credit risk related to cash, cash equivalents, short-term investments and marketable securities is limited because the securities held in the portfolio relate to a large number of issuers. The Company has a limited amount of credit risk due to the composition of its customer base, which includes a large number of individuals and businesses. As disclosed elsewhere in these financial statements, the Company was exposed to credit risk in the event of non-performance by counterparties to its derivative financial instruments, but limited the concentration of credit risk by dealing with several highly rated financial institutions. As of December 31, 2002, the Company does not own any derivative financial instruments.

Fair value

Fair value estimates are made as of a specific point in time, using available information about the financial instruments. These estimates are subjective in nature and often cannot be determined with precision.

The fair value of cash and cash equivalents, trade receivables, interest receivable, taxes receivable, accounts payable and accrued liabilities approximate their carrying value due to the short-term maturity of these instruments.

110

18.    FINANCIAL INSTRUMENTS (CONT’D)

The fair value of the short-term investments and marketable securities is determined based on an amount quoted at the balance sheet date.

The fair value of the Senior Secured Term Loans differs from their carrying value, but it has been omitted because it is not possible to determine it with sufficient reliability.

The fair value of the Senior Discount Notes due in 2006, 2007 and 2009 is determined based on an amount quoted on the over-the-counter market as at December 31, 2002 and 2001.

The fair value of the swaps and the options is determined based on market rates prevailing at the balance sheet date obtained from the Company’s financial institutions for similar derivative instruments.

Fair values of the Company’s financial instruments, where the fair value differs from the carrying amounts on the financial statements, are as follows:

	2002				2001
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	$		$		$		$
Senior Discount Notes		1,450,130		9,297		1,372,494		1,022,034
Derivative instruments		—		—		26,986		27,792

19.    SEGMENTED INFORMATION

The Company carries out its operations entirely in Canada through three strategic business segments: PCS, Wireless Internet, and Investments. PCS consists of wireless telecommunications services that use advanced and secure digital technology. The Company provides retail PCS in Canada to end-users and offers access to the Company’s PCS network to third-party telecommunications providers (on a wholesale basis). The Company also offers PCS data services based on the new General Packet Radio Service (“GPRS”) technology. Through its Wireless Internet business segment, the Company provides mobile Internet services to its PCS subscribers and had planned to build a high-speed Internet Protocol-based data network using MCS technology in the 2500 MHz range. The Company had planned to build the MCS network through Inukshuk. However, the current challenging capital market conditions, which have made raising financing difficult, Inukshuk has suspended building the MCS network on its own for the time being. Through its Investments business segment, the Company invests in various wireless or high technology companies and, as a result, is exposed to normal market risk fluctuation, which may be significant. As the Wireless Internet and Investments operations are not significant starting 2003, the Company has determined that it operates in one segment since January 1, 2003.

The accounting policies for segment and intersegment transactions are the same as described in the summary of significant accounting policies (see note 2). Management evaluates performance based on segment operating income (loss). The segment operating income (loss) is defined as operating income (loss) excluding restructuring charges, depreciation and amortization for all segments and including gain (loss) in value of investments and marketable securities, gain (loss) on disposal of investments and share of net loss (net income) in investees for the Investments segment. All intersegment transactions are eliminated upon consolidation.

111

19.    SEGMENTED INFORMATION (CONT’D)

The following tables present information about reported segment results and assets:

	Year ended December 31, 2002
										Intersegment
	PCS			Wireless Internet			Investments			eliminations			Total
	$			$			$			$			$
Revenues		590,959			103			—			—			591,062
Revenues – intersegment		97			1,770			—			(1,867	)		—
Revenues – total		591,056			1,873			—			(1,867	)		591,062
Operating expenses		(493,271	)		(6,823	)		44			—			(500,050	)
Operating expenses-intersegment		(1,876	)		(6,680	)		—			8,556			—
Segment operating income (loss) before the following:		95,909			(11,630	)		44			6,689			91,012
Impairment of intangible assets		—			(223,399	)		—			—			(223,399	)
Loss in value of investments, marketable securities and other assets		—			—			(16,086	)		—			(16,086	)
Share of net loss in investees		—			—			(13,212	)		—			(13,212	)
Segment operating income (loss)		95,909			(235,029	)		(29,254	)		6,689			(161,685	)
Additions to capital assets		124,738			(64	)		1			8			124,683
Additions to intangible assets		—			—			—			—			—
Total assets as at December 31, 2002		902,169			1,424			14,608			(5,347	)		912,854

	Year ended December 31, 2001
										Intersegment
	PCS			Wireless Internet			Investments			eliminations			Total
	$			$			$			$			$
						(Restated – note 3)
Revenues		541,416			—			74			—			541,490
Revenues – intersegment		1,094			7,648			158			(8,900	)		—
Revenues – total		542,510			7,648			232			(8,900	)		541,490
Operating expenses		(533,126	)		(16,213	)		(1,954	)		—			(551,293	)
Operating expenses-intersegment		(1,217	)		(4,107	)		(823	)		6,147			—
Segment operating income (loss) before the following:		8,167			(12,672	)		(2,545	)		(2,753	)		(9,803	)
Loss in value of investments, marketable securities and other assets		(565	)		—			(32,528	)		—			(33,093	)
Share of net loss in investees		—			—			(5,282	)		—			(5,282	)
Segment operating income (loss)		7,602			(12,672	)		(40,355	)		(2,753	)		(48,178	)
Additions to capital assets		283,610			1,301			(8	)		(7,508	)		277,395
Additions to intangible assets		—			130,000			—			—			130,000
Total assets as at December 31, 2001		1,099,359			262,636			44,710			(11,446	)		1,395,259

	Year ended December 31, 2000
										Intersegment
	PCS			Wireless Internet			Investments			eliminations			Total
	$			$			$			$			$
						(Restated – note 3)
Revenues		405,813			—			173			—			405,986
Revenues – intersegment		1,887			9,348			—			(11,235	)		—
Revenues – total		407,700			9,348			173			(11,235	)		405,986
Operating expenses		(513,435	)		(2,991	)		(1,892	)		—			(518,318	)
Operating expenses-intersegment		—			(3,885	)		(1,686	)		5,571			—
Segment operating income (loss) before the following:		(105,735	)		2,472			(3,405	)		(5,664	)		(112,332	)
Net gain on disposal of investments		—			—			285,967			—			285,967
Loss in value of investments, marketable securities and other assets		—			—			(248,336	)		—			(248,336	)
Share of net income (loss) in investees		—			—			20,573			—			20,573
Segment operating income (loss)		(105,735	)		2,472			54,799			(5,664	)		(54,128	)
Additions to capital assets		243,170			17,847			1,765			(5,591	)		257,191
Additions to intangible assets		—			20,000			—			—			20,000

112

19.    SEGMENTED INFORMATION (CONT’D)

Reconciliation of the segmented operating income (loss) to the consolidated net loss

	2002			2001			2000
	$			$			$
Segmented operating loss		(161,685	)		(48,178	)		(54,128	)
Depreciation and amortization		(242,416	)		(177,990	)		(131,304	)
Restructuring charges		(7,494	)		(5,226	)		—
Interest income		5,479			6,553			20,341
Interest expense		(216,256	)		(215,888	)		(185,471	)
Financing charges		(10,573	)		(8,349	)		(8,742	)
Foreign exchange gain (loss)		926			(51,129	)		(24,638	)
Write down of deferred financing costs and deferred gain and loss on financial instruments		(16,947	)		—			—
Gain on financial instruments		6,570			—			—
Income tax benefit		71,895			1,722			115,515
Net loss		(570,501	)		(498,485	)		(268,427	)

20.    ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES (“U.S. GAAP”)

These financial statements were prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) which differ in certain material respects from U.S. GAAP. The following summary sets out the material adjustments to the Company’s reported net loss, which would be made in order to conform with U.S. GAAP and the accounting principles and practices required by the SEC.

Reconciliation of consolidated statements of loss and comprehensive loss

			2002			2001			2000
			$			$			$
Net loss under Canadian GAAP				(570,501	)		(498,485	)		(268,427	)
(a	)	Reversal of amortization of PCS License		—			139			136
(b	)	Share of net income (net loss) in investees		4,772			(22,079	)		21,248
(c	)	Unrealized net loss in value of investments and marketable securities		—			—			158,497
(c	)	Recognized loss in value of marketable securities		—			—			(158,964	)
(d	)	Development costs		6,108			(3,502	)		(2,606	)
(e	)	Stock compensation		478			(478	)		—
(f	)	Amortization of net deferred gain on financial instruments		(1,110	)		—			—
(f	)	Amortization of other comprehensive income related to financial instruments		1,110			—			—
(f	)	Changes in fair market value of a fair value hedge		—			1,367			—
(f	)	Cumulative effect as of January 1, 2001 resulting from the adoption of Statement of Financial Accounting Standards No. 133		—			(900	)		—
(h	)	Effect of legislated tax rate changes on deferred tax liabilities		—			25,771			—
(a	)	Impairment of intangible assets		(25,771	)		—			—
		Net loss under U.S. GAAP		(584,914	)		(498,167	)		(250,116	)
(c	)	Unrealized gain (loss) in value of marketable securities net of income taxes in the amount of $45,000 for 2002 ($74,000 for 2001 and $68,828,000 for 2000)		(177	)		322			(159,864	)
(f	)	Changes in fair market value of cash flow hedges net of income taxes in the amount of $31,000 for 2002 ($818,000 for 2001)		367			(1,364	)		—

113

20.    ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES (“U.S. GAAP”) (CONT’D)

(f	)	Reversal of cumulative income taxes related to changes in fair market value of cash flow hedges	1,036		—		—
(f	)	Amortization of other comprehensive income related to financial instruments	(1,110	)	—		—
(f	)	Write off of other comprehensive income related to financial instruments	(1,968	)	—		—
(f	)	Cumulative effect as of January 1, 2001, resulting from the adoption of Statement of Financial Accounting Standards No. 133	—		3,939		—
(c	)	Reclassification adjustments	—		—		158,964
		Comprehensive loss under U.S. GAAP	(586,766	)	(495,270	)	(251,016	)
		Basic and diluted loss per share under U.S. GAAP (dollars)	(2.43	)	(4.56	)	(2.60	)

Differences in reported amounts on consolidated balance sheets

			2002									2001
									U.S.				U.S.
			Canadian GAAP			Adjustments			GAAP				GAAP
			$			$			$				$
(c	)	Marketable securities		164			145			309				1,403
(b	)	Long-term investments		10,671			1,276			11,947				31,487
(d	)	Deferred charges and other assets		1,664			—			1,664				38,502
(f	)	Cash flow hedges		—			—			—				1,675
(a	)	Intangible assets		2,727			(2,727	)		—				249,170
(e	)	Accounts payable and accrued liabilities – other		(132,306	)		—			(132,306	)			(106,812	)
(g	)	Share capital		(1,167,678	)		(60,723	)		(1,228,401	)			(1,228,094	)
		Deficit		2,466,674			62,174			2,528,848				1,943,934
		Accumulated other comprehensive income		—			(145	)		(145	)			(1,997	)

(a)   Intangible assets

The PCS License, which includes certain development costs and other costs associated with obtaining the PCS License from the Government of Canada were deferred under Canadian GAAP. Under U.S. GAAP such development costs are expensed as incurred. During 2002, the Company wrote down the value of the MCS Licenses to nil. Prior to this write-down, the carrying values of these licenses were $249,170,000 and $223,399,000 under U.S. GAAP and Canadian GAAP respectively, representing a difference of $25,771,000.

(b)   Investment in entity subject to significant influence

Under Canadian GAAP, the investor should continue to record its portion of investee losses unless the investor would be unlikely to share in losses of the investee. Under U.S. GAAP, in situations where an investor is not required to advance additional funds to the investee and where previous losses have reduced the common and the preferred stock investment account to zero, the Company should continue to report its share of equity method losses in its statement of operations to the extent of and as an adjustment to the loans to the investee.

In addition, under Canadian GAAP, the share of net income in an investee that is a private investment company is calculated based on its realized gains or losses. Under U.S. GAAP, the share of net income in such investees is calculated based on both realized and unrealized gains or losses.

(c)   Marketable securities

Under Canadian GAAP, the marketable securities are recorded as explained in note 2. Under U.S. GAAP, the marketable securities are classified as available for sale, and any changes to the market value are recorded in other comprehensive loss. As of December 31, 2000, a decline in value of marketable securities in the amount of $158,964,000 was considered to be other than temporary and consequently was reclassified from other comprehensive loss to net loss.

114

20.    ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES (“U.S. GAAP”) (CONT’D)

(d)   Deferred charges and other assets

Under Canadian GAAP, certain development costs are deferred and amortized. Under U.S. GAAP, such costs would be expensed as incurred (nil as at December 31, 2002, $6,108,000 as at December 31, 2001 and $2,606,000 at December 31, 2000).

Under Canadian GAAP, a deferred gain or loss is recorded upon either the de-designation of a derivative financial instrument as a hedge or upon the early termination of a derivative financial instrument qualifying as a hedge. This deferred gain or loss represents the appreciation or depreciation of the fair market value of the derivative financial instrument from its inception until the date of the de-designation or early termination. The deferred gain or loss is then amortized over the remaining life of the originally hedged item. Under U.S. GAAP, the appreciation or depreciation of the fair market value of the derivative financial instrument from its inception until the date of its de-designation or early termination is accumulated in other comprehensive income. The accumulated balance is then amortized to net income (loss) over the remaining life of the originally hedged item.

(e)   Stock compensation

Under Canadian GAAP, certain costs related to bonuses in connection with stock compensation awards granted at-the-money with a minimum guaranteed performance, are not accounted for until the bonus is likely to be paid out and the amount can be quantified. Under U.S. GAAP, such costs are accounted for on a combined basis with the recognition of compensation cost over the service period equal to the bonus element. As of December 31, 2002, all such stock compensation awards granted in the past have been cancelled.

(f)   Derivative instruments

The Financial Accounting Standards Board has issued SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended by Statements 137 and 138. The Company adopted SFAS 133 effective January 1, 2001. The Statements require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings.

The adoption of SFAS 133, as amended by Statements 137 and 138, resulted in the cumulative effect as of January 1, 2001, of an accounting change of $900,000 being recognized as an expense in the statement of net loss and as a credit in other comprehensive loss. In addition, a credit of $3,039,000, net of income taxes in the amount of $1,823,000 has been recognized in other comprehensive loss. For 2001, the adoption of SFAS 133 resulted in $1,367,000 being recognized as income in the statement of net loss. As of December 31, 2002, all such derivative instruments have been terminated.

(g)   Option to purchase Class A Non-Voting Shares

Under U.S. GAAP, certain stock options issued to non-employees are recorded as an expense over the vesting period, when it becomes probable that they will be exercised. In 1996, an amount of $60,723,000 was expensed with a corresponding increase in share capital under U.S. GAAP.

(h)   Deferred tax liabilities

Under Canadian GAAP, the impact of changes in income tax rates on the measurement of deferred tax assets and liabilities are recorded when the changes in tax rates have been substantively enacted. Under U.S. GAAP, changes in income tax rates are recorded when the change in tax rates has been legislated. Under Canadian GAAP, the estimated deferred tax liabilities related to the MCS Licenses acquired during 2001, in the amount of $72,896,000, resulting from the difference between the carrying value and the tax basis of the asset acquired, was capitalized to the MCS Licenses. This amount was determined using substantially enacted tax rates at the date of acquisition. Using legislated tax rates at the date of acquisition, the tax liability and related increase in the carrying value of the asset was $98,667,000 under U.S. GAAP. During 2001, the change in rates was legislated, which resulted in a decrease in the deferred tax liability and a credit to income of $25,771,000 under U.S. GAAP.

(i)   Advertising costs

Advertising expenses for the twelve months ended December 31, 2002 amounted to $37,341,000 ($33,293,000 and $45,729,000 for the twelve months ended December 31, 2001 and 2000 respectively).

115

21.    CONTINGENCY

On April 10, 2002, ASP Wireless Net Inc. (“ASP”), a former service provider of Connexions, filed a notice of arbitration pursuant to an agreement that ASP had with Connexions. ASP claims in the notice of arbitration that Connexions has breached its agreements with ASP and that it therefore suffered damages in the amount of $18,500,000, which ASP is claiming from Microcell. The Company considers ASP’s claim as frivolous and unfounded in fact and in law and intends to vigorously contest it.

22.    COMPARATIVE FIGURES

Some of the comparative figures have been reclassified to conform to the presentation adopted in the current year.

ITEM 19 — EXHIBITS

The following documents are filed as exhibits to this annual report:

Exhibit
Number	Description
1.1	Certificate of Incorporation, Certificate of Arrangement and Certificate of Amendment of Microcell Telecommunications Inc.
1.2	General By-laws of Microcell Telecommunications Inc.
2.1	First Unit Indenture made as of May 30, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada as trustee
2.2	Second Unit Indenture made as of May 30, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada as trustee
2.3	Warrant Indenture for the Warrants 2005 dated as of May 1, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Trustee.
2.4	Warrant Indenture for the Warrants 2008 dated as of May 1, 2003 among Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Trustee.
2.5	Shareholder Rights Plan Agreement dated as of May 1, 2003 between Microcell Telecommunications Inc. and Computershare Trust Company of Canada, as Rights Agent.
4.1	Tranche A Exit Facility Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent, Collateral Agent and Issuing Bank.
4.2	Tranche B Credit Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto, as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent and Collateral Agent.
4.3	Tranche C Credit Agreement dated as of May 1, 2003 entered into among Microcell Telecommunications Inc., as parent, Microcell Solutions Inc., as borrower, the financial institutions from time to time parties hereto as lenders, and JP Morgan Chase Bank, Toronto Branch, as administrative agent and Collateral Agent.
4.4	Intercreditor And Collateral Agency Agreement, dated as of May 1, 2003, made among Microcell Solutions Inc., as borrower, Microcell Telecommunications Inc., as guarantor, each of the persons listed on the execution pages thereto under the “Tranche A Lenders” heading, each of the persons listed on the execution pages thereto under the “Tranche B Lenders” heading, each of the persons listed on the execution pages thereto under the “Tranche C Lenders” heading, JP Morgan Chase Bank, Toronto Branch, as administrative agent under the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement, JP Morgan Chase Bank, Toronto Branch, as collateral agent for each of the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders and as fondé de

116

Exhibit
Number	Description
	pouvoir pursuant to the terms of the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement, Computershare Trust Company Of Canada, as Trustee for the holders of the First Units, and Computershare Trust Company Of Canada, as Trustee for the holders of the Second Units.
4.5	Stock Option Plan of Microcell Telecommunications Inc. dated May 1, 2003
4.6	Stock Purchase Plan of Microcell Telecommunications Inc. dated May 1, 2003
4.7	PCS Licence Conditions issued by Industry Canada
4.8	Lease dated as of August 1, 1998 between Microcell Telecommunications Inc. and WPBI Property Management Inc., as amended
8.1	List of Subsidiaries
11.1	Certification of the President and Chief Executive Officer of Microcell pursuant to Section 302 of the Sarbanes-Oxley Act
11.2	Certification of the Chief Financial Officer and Treasurer of Microcell pursuant to Section 302 of the Sarbanes-Oxley Act
11.3	Certification Form of the President and Chief Executive Officer of Microcell pursuant to Section 906 of the Sarbanes-Oxley Act
11.4	Certification Form of the Chief Financial Officer and Treasurer of Microcell pursuant to Section 906 of the Sarbanese-Oxley Act

117

Table of contents

SCHEDULE 1	Condensed Financial Information of Registrant
SCHEDULE 2	Valuation and Qualifying accounts
	Microcell Telecommunications Inc. December 31, 2002

118

AUDITORS’ REPORT

To the Directors of
Microcell Telecommunications Inc.

We have audited the consolidated financial statements of Microcell Telecommunications Inc. as of December 31, 2002 and 2001 and for each of the years in the three-year period ended December 31, 2002, and have issued our report thereon dated January 31, 2003 [expect for note 1 which is as at May 1, 2003]. Our audits also included Schedule II of item 19 of the Company’s Form 20-F to be filed with the Securities and Exchange Commission for the year ended December 31, 2002. This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, this schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

Montréal, Canada
January 31, 2003

Chartered Accountants

119

SCHEDULE I

Condensed Financial Information of Registrant

Not applicable

SCHEDULE II

Valuation and Qualifying Accounts

	Years ended December 31
	2002			2001			2000
Allowance for doubtful accounts:
Balance, beginning of year		10,717			4,116			3,884
Addition: bad debt expenses provision		34,771			20,637			14,339
Deduction: uncollectible accounts written off		(30,603	)		(14,036	)		(14,107	)
Balance, end of year		14,885			10,717			4,116

120

SIGNATURE

     The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

MICROCELL TELECOMMUNICATIONS INC.
(Registrant)

By:	(s) Jacques Leduc
	Jacques Leduc, Chief Financial Officer and Treasurer

     DATE: June 25, 2003

121 EX-1.1 3 m10142orexv1w1.htm EX-1.1

EXHIBIT 1.1

Industry Canada	Industrie Canada
Certificate	Certificat
of Incorporation	de constitution
Canada Business	Loi canadienne sur
Corporations Act	les sociétés par actions

4130910 CANADA INC.	413091-0
Name of corporation -Dénomination de la société	Corporation number-Numéro de la société
I hereby certify that the above-named corporation, the articles of incorporation of which are attached, was incorporated under the Canada Business Corporations Act.	Je certifie que la société susmentionnée, dont les statuts constitutifs sont joints, a été constituée en société en vertu de la Loi canadienne sur les sociétés par actions.
	April 28, 2003 / le 28 avril 2003
Director - Directeur	Date of Incorporation - Date de constitution

CANADA BUSINESS
CORPORATIONS ACT
FORM 1
ARTICLES OF INCORPORATION
(SECTION 6)

1 -	Name of the Corporation
	4130910 CANADA INC.
2 -	The province or territory in Canada where the registered office is situated
	Province of Quebec
3 -	The classes and any maximum number of shares that the Corporation is authorized to issue
	See the provisions of Schedule 1 which form an integral part of the articles of incorporation.
4 -	Restrictions, if any, on share transfers
	Restrictions, if any, are stated in Schedule 1 which form an integral part of the articles of incorporation.
5 -	Number (or minimum and maximum number) of directors
	A minimum of one (1) director and a maximum of fifteen (15) directors.
6 -	Restrictions, if any, on the business the Corporation may carry on
	None.
7 -	Other provisions, if any
	None.
8 -	Incorporators

Name	Address
Claire Zikovsky	1155 René-Lévesque Blvd. West, 40th Floor Montreal, Quebec H3B 3V2

-2-

Date	Signature
April     ,2003
	Claire Zikovsky
FOR DEPARTMENTAL USE ONLY
Corporation No.	Filed

SCHEDULE 1

1 -	The classes and any maximum number of shares that the Corporation is authorized to issue
	Unlimited number of common shares.

1. The common shares shall have attached thereto the following rights, privileges, restrictions and conditions:

(a)	Each common share shall entitle the holder thereof to one (1) vote at all meetings of the shareholders of the Corporation (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions hereof or pursuant to the provisions of the Canada Business Corporations Act (hereinafter referred to as the “Act”)).
(b)	The holders of the common shares shall be entitled to receive during each year, as and when declared by the board of directors, dividends payable in money, property or by the issue of fully paid shares of the capital of the Corporation.
(c)	In the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or other distribution of assets of the Corporation among shareholders for the purpose of winding-up its affairs, subject to the rights, privileges, the holders of common shares shall be entitled to receive the remaining property of the Corporation.

CANADA BUSINESS
CORPORATIONS ACT
FORM 3
NOTICE OF REGISTERED OFFICE OR
NOTICE OF CHANGE OF ADDRESS
OF REGISTERED OFFICE
(SECTION 19)

1 -	Name of the Corporation
	4130910 CANADA INC.
2 -	Corporation No.
	4130910
3 -	Province or territory in Canada where the registered office is situated (or to be situated).
	Province of Quebec
4 -	Street address of registered office
	1250 René-Lévesque Blvd. West
	38th Floor
	Montréal, Québec H5A 1K3
5 -	Effective date of change
	Not applicable
6 -	Previous address of registered office
	Not applicable

- 2 -

Date	Signature
April     , 2003
7 -     Capacity of
	Printed Name
Incorporator	Claire Zikovsky
FOR DEPARTMENTAL USE ONLY
Filed

CANADA BUSINESS
CORPORATIONS ACT
FORM 6
NOTICE OF DIRECTORS,
NOTICE OF CHANGE OF DIRECTORS OR
NOTICE OF CHANGE OF ADDRESS OF A
PRESENT DIRECTOR
(SECTIONS 106 and 113(1))

1 -	Name of the Corporation
	4130910 CANADA INC.
2 -	Corporation No.
	413091-0
3 -	The following persons became directors of this Corporation

Effective date:	Not applicable
Name	André Tremblay
Residential address	227 Outremont Avenue Outremont, Québec H2V 3L9
Resident Canadian - Y/N	Y

4 - The following persons ceased to be directors of this Corporation

Effective date:	Not applicable
Name
Residential address

- 2 -

5 - The directors of this Corporation now are

Name	André Tremblay
Residential address	227 Outremont Avenue
	Outremont, Québec
	H2V 3L9
Resident Canadian - Y/N	Y

6 - Change of address of a present director

Effective date:	Not applicable
Name
Former residential address
New residential address

Date	Signature
April     ,2003
7 -     Capacity of
	Printed Name
Incorporator	Claire Zikovsky
FOR DEPARTMENTAL USE ONLY
Filed

Industry Canada	Industrie Canada
Certificate	Certificat
of Amendment	de modification
Canada Business	Loi canadienne sur
Corporations Act	les sociétés par actions

MICROCELL TÉLÉCOMMUNICATIONS INC./
MICROCELL TÉLÉCOMMUNICATIONS INC.				413091-0
Name of corporation -Dénomination de la société				Corporation number-Numéro de la société
I hereby certify that the articles of the above-named corporation were amended:			Je certifie que les statuts de la société susmentionnée ont été modifiés:
a)	under section 13 of the Canada Business Corporations Act in accordance with the attached notice;	o	a)	en vertu de l’article 13 de la Loi canadienne sur les sociétés par actions, conformément à l’avis ci-joint;
b)	under section 27 of the Canada Business Corporations Act as set out in the attached articles of amendment designating a series of shares;	o	b)	en vertu de l’article 27 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes désignant une série d’actions;
c)	under section 179 of the Canada Business Corporations Act as set out in the attached articles of amendment;	þ	c)	en vertu de l’article 179 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses modificatrices ci-jointes;
d)	under section 191 of the Canada Business Corporations Act as set out in the attached articles of reorganization;	o	d)	en vertu de l’article 191 de la Loi canadienne sur les sociétés par actions, tel qu’il est indiqué dans les clauses de réorganisation ci-jointes;

	May 1, 2003 / le 1 mai 2003
Director - Directeur	Date of Amendment - Date de modification

CANADA BUSINESS
CORPORATIONS ACT
FORM 4
ARTICLES OF AMENDMENT
(SECTION 27 OR 177)

1 -	Name of the Corporation
	4130910 CANADA INC.
2 -	Corporation No.
	413091-0
3 -	The articles of the above-named Corporation are amended as follows:

Section 1 of the articles of incorporation be and the same is hereby deleted and replaced by the following:
1 -	Name of the Corporation
	MICROCELL TELECOMMUNICATIONS INC./MICROCELL TÉLÉCOMMUNICATIONS INC.

Date	Signature
April 30, 2003
	Printed Name
Capacity of
Director	André Tremblay
FOR DEPARTMENTAL USE ONLY
Filed

Industry Canada	Industrie Canada
Certificate of Arrangement	Certificat d’arrangement
Canada Business Corporations Act	Loi canadienne sur les sociétés par actions

MICROCELL TELECOMMUNICATIONS INC.	413091-0
Name CBCA corporation(s) involved -	Corporation number-Numéro de la société
Dénomination de la (des) société(s)
I.C.S.A. concernée(s)
I hereby certify that the arrangement set out in the	Je certifie que l’arrangement mentionné dans les
attached articles of arrangement, involving the	clauses d’arrangement annenées, concernant la
above-mentioned corporation(s), has been effected	(les) société(s) susmentionnée(s), a pris effet en
under section 192 of the Canada Business	vertu de l’article 192 de la Loi Canadienne sur les
Corporations Act.	sociétés par actions.
	May 1, 2003 / le 1 mai 2003
Director - Directeur	Date of Amendment - Date de modification

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Industry Canada	Industrie Canada	FORM 14.1	FORMULE 14.1
		ARTICLES OF ARRANGEMENT	CLAUSES D’ARRANGEMENT
Canada Business	Loi canadienne sur les	(SECTION 192)	(ARTICLE 192)
Corporations Act	sociétés par actions

1 -	Name of applicant corporation(s) — Dénomination de la (des) requérante(s)	2 -	Corporation No(s).
			No(s) de la(des) société(s)
MICROCELL TELECOMMUNICATIONS INC.		413091-0
(formerly 4130910 Canada Inc.)
3 -	Name of the corporation(s) the articles of which are amended, if applicable	4 -	Corporation No(s).
	Dénomination de la(des) société(s) dont les statuts sont modifies, le cas échéant		No(s) de la(des) société(s)
		413091-0
MICROCELL TELECOMMUNICATIONS INC.
(formerly 4130910 Canada Inc.)
5 -	Name of the corporation(s) created by amalgamation, if applicable	6 -	Corporation No(s).
	Dénomination de la(des) société(s) issue(s) de la(des) fusion(s), le cas échéant		No(s) de la(des) société(s)
7 -	Name of the dissolved corporation(s), if applicable	8 -	Corporation No(s).
	Dénomination de la(des) société(s) dissoute(s), le cas échéant		No(s) de la(des) société(s)
9 -	Name of other bodies corporate involved, if applicable	10 -	Corporation No(s). or jurisdiction of incorporation
	Dénomination des autres personnes morales en cause, le cas échéant		No(s) de la(des) société(s)/ou loi sous le regime de laquelle
			elle est constituée

11 -	In accordance with the order approving the arrangement		Conformément aux termes de l’ordonnance approuvant l’arrangement
(a)	the articles of the above-named corporation(s) are amended in accordance with the attached plan of arrangement	þ	les statuts de la(des) sociétés susmentionnée(s) sont modifies en conformité avec le plan d’arrangement ci-joint:
(b)	the following bodies corporate are amalgamated in accordance with the attached plan of arrangement	o	les personnes morales suivantes sont fusionnées conformément au plan d’arrangement ci-joint
(c)	the above-named corporation(s) is(are) liquidated and dissolved in accordance with the attached plan of arrangement	o	la(les) sociétés susmentionnée(s) est(sont) liquidées et dissoute(s) conformément au plan d’arrangement ci-joint
(d)	the plan of arrangement attached hereto, involving the above-named body(ies), corporate is hereby effected	þ	le plan d’arrangement ci-joint portant sur la(les) personnes(s) morale(s) susmentionnée(s) prend effet

Date	Signature	Title — Titre
		FOR DEPARMENTAL USE ONLY — À L’USAGE DU MINISTÈRE SEULEMENT
		Filed — Déposée

PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT

WHEREAS 2861399 Canada Inc. (formerly known as Microcell Telecommunications Inc.) received the sanction of the Superior Court of the Province of Quebec on March 18^th, 2003 (“Sanction Order”) in respect of a plan of reorganization and of compromise and arrangement dated February 17, 2003 under the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act (“CBCA”) in respect of such corporation and certain of its subsidiaries (as amended, the “Microcell Plan”);

WHEREAS the Microcell Plan provides for, inter alia, the incorporation of the Applicant (as defined herein) pursuant to the CBCA and the appointment, as the last step of the transactions contemplated by the Microcell Plan and immediately prior to the Microcell Plan becoming effective, of a new board of directors of the Applicant, the members of which shall be appointed with staggered terms;

WHEREAS the present Plan of Arrangement is required to give effect to such appointment of directors of the Applicant as contemplated by the Microcell Plan.

ARTICLE 1.
INTERPRETATION

Section 1.1.     Definitions

In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“Applicant” means Microcell Telecommunications Inc. (formerly known as 4130910 Canada Inc.), a corporation incorporated pursuant to the CBCA.

“Arrangement” means an arrangement in respect of the Applicant under section 192 of the CBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with Article 3 or made at the direction of the Court in the Final Order.

“Arrangement Resolution” means a resolution of the sole director of the Applicant approving the Arrangement and the filing of the Articles of Arrangement.

“Articles of Arrangement” means the articles of arrangement of the Applicant in respect of the Arrangement to be filed with the Director, effective on the Effective Date.

“Articles of Incorporation” means the articles of incorporation of the Applicant dated April 28, 2003.

“Board” means the board of directors of the Applicant, from time to time.

“CBCA” has the meaning set forth in the preamble to this Plan of Arrangement.

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“Certificate” means the certificate of arrangement giving effect to the Arrangement, issued pursuant to subsection 192(7) of the CBCA, and dated the Effective Date.

“Court” means the Superior Court of Quebec, District of Montreal.

“Director” mean the Director appointed pursuant to section 260 of the CBCA.

“Effective Date” means the date of implementation of the Microcell Plan.

“Effective Time” has the meaning ascribed to such term in Section 2.2.

“Final Order” means the order of the Court approving the Arrangement as such order may be amended by the Court at any time prior to the Effective Date.

“Microcell Plan” has the meaning ascribed thereto in the preamble to this Plan of Arrangement; a copy of the Microcell Plan, as implemented, is part of the corporate records of the Corporation maintained in accordance with the provisions of the CBCA.

“Sanction Order” has the meaning ascribed thereto in the preamble to this Plan of Arrangement.

Section 1.2.      Sections and Headings

The division of this Plan of Arrangement into sections and the insertion of headings are for reference purposes only and shall not affect the interpretation of this Plan of Arrangement.

Section 1.3.      Number, Gender and Persons

In this Plan of Arrangement, unless the context otherwise requires, words importing the singular number include the plural and vice versa and words importing any gender include all genders.

ARTICLE 2.
ARRANGEMENT

Section 2.1.      Binding Effect

This Plan of Arrangement will become effective at, and be binding as at and after, the Effective Time.

Section 2.2.     Arrangement

(1)	The Articles of Incorporation are amended as at the first moment in time on the Effective Date by replacing the Schedule 1 attached to the Articles of Incorporation by a new Schedule 1 in the form of the Schedule 1 attached to this Plan of Arrangement as Schedule “A”.
(2)	The Articles of Incorporation are further amended on the Effective Date and at such moment in time as is contemplated by the sequence of transactions provided in Section 3.2 of the Microcell Plan, being immediately prior to the effectiveness of the Microcell

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	Plan (the “Effective Time”) by deleting the words “A minimum of one (1) director and a maximum of eleven (11) directors” in Section 5 of such articles titled “Number (or minimum and maximum numbers of directors)” and adding therein the words “Eleven (11) directors”.
(3)	(a)     After giving effect to the amendment described in Section 2.2(2) above, effective at the Effective Time, and without any further act, corporate approvals or other formality, the individuals listed in the attached Schedule “B” shall be appointed to the Board.
	(b)     The Board shall be divided into two groups: a first group (“Group A”) to consist of six directors appointed to hold office for a stated term expiring at the close of the third annual meeting of shareholders following the Effective Date and a second group (“Group B”) to consist of five directors appointed to hold office for a stated term expiring at the close of the second annual meeting of shareholders following the Effective Date. Schedule “B” identifies, in respect of each individual listed therein, whether such individual is part of Group A or Group B.
(4)	(a)     After giving effect to the amendments described in Section 2.2(2) and (3) above, the Articles of Incorporation are further amended as at the Effective Time by deleting the word “None” in Section 7 of such Articles titled “Other provisions, if any” and adding therein the words “Schedule 2 is hereby incorporated in the Articles”, whereupon the Articles of Incorporation shall be further amended to include a Schedule 2, in the form of the Schedule 2 attached to this Plan of Arrangement as Schedule “C”.
	(b)     For the purpose of section 1.2 of Schedule 2 to be attached to the articles of the Applicant pursuant to Section 2.2(4)(a) above, the following individuals shall be deemed to have been nominated and elected by holders of First Preferred Voting Shares (as defined in Schedule 2) (or First Voting Units (as defined in Schedule 2), as the case may be): Messrs. André Bureau, Jim Continenza, Christian Dubé, Gary Goertz, Robert Latham, Paul McFarlane and Berl Nadler.

ARTICLE 3.
AMENDMENTS

Section 3.1.      Amendments to Plan of Arrangement

The Applicant reserves the right to amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Date, provided that each such amendment, modification and/or supplement must be (i) set out in writing and (ii) filed with and approved by the Court.

ARTICLE 4.
FURTHER ASSURANCES

Section 4.1.      Further Assurances

Notwithstanding that the transactions and events set out herein shall occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, the Applicant may make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required in order to further document or evidence any of the transactions or events set out herein.

SCHEDULE “A”
TO THE PLAN OF ARRANGEMENT UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT

FORM OF SCHEDULE 1 TO THE ARTICLES OF THE APPLICANT

See attached.

SCHEDULE I

GENERAL

A)     Definitions

In this Schedule I, the following terms and expressions shall have the meaning ascribed thereto, unless specifically otherwise stated:

“1933 Act” means the United States Securities Act of 1933, as amended.

“Act” means the Canada Business Corporations Act and the Regulations enacted thereunder as amended from time to time.

“affiliate” has the meaning ascribed to “affiliated companies” in the Securities Act (Quebec) as amended from time to time, provided that for purposes of applying the definition, any partnership will be considered to be a company the shareholders of which are the shareholders of its general partner or managing partner.

“Articles” means the articles of incorporation of the Corporation to which are attached this Schedule I.

“Asset Disposition” means, with respect to any Reference Entity, the sale, lease, license, transfer, assignment or other disposition of, or the expropriation, condemnation, destruction or other loss of, all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one transaction or a series of transactions pursuant to which the disposing party shall receive, in payment thereof, cash or a cash equivalent, other than (i) inventory sold in the ordinary course of business upon customary credit terms, (ii) sales of scrap or obsolete material or equipment which are not material in the aggregate, (iii) sales or other dispositions of assets which are not in the ordinary course of business or leases of real property or personal property (under which a Reference Entity is party), in any such case, which have a Fair Market Value less than Cdn$2,000,000 for any transaction and less than Cdn$2,000,000 for all such series of transactions in any fiscal year and which are no longer used or useful in the business, (iv) licenses granted to third parties in the ordinary course of business, and (v) property sold to another Reference Entity. In the case of an expropriation, condemnation, destruction or other loss of any property, any insurance proceeds or other indemnity received as a result of such event may be used within the 90-day period following the receipt of such insurance proceeds or other indemnity to replace the property so disposed of and such sale or disposition will not constitute an Asset Disposition.

“associate” has the meaning ascribed thereto in the Securities Act (Quebec) as amended from time to time.

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“Average Common Share Price” means, as at any particular date, the weighted average trading price on the TSX (or if not listed on the TSX, on any other Recognized Exchange on which such shares are traded) per share of the Class A Restricted Voting Shares and Class B Non-Voting Shares during the twenty (20) consecutive trading days ending five (5) trading days prior to such date.

“Board” means the board of directors of the Corporation as appointed from time to time.

“Business Day” means a day, other than Saturday, Sunday or a statutory holiday, on which banks are generally open for business in Montreal, Quebec, Toronto, Ontario and New York, New York.

“Canadian” means a Canadian within the meaning of such term in the Canadian Telecommunications Common Carrier Ownership and Control Regulations SOR/94-667 enacted pursuant to the Telecommunications Act.

“Canadian Ownership and Control Provisions” means Canadian ownership and control provisions established in the Telecommunications Act, in the Radiocommunications Act, and related regulations.

“Capital Expenditures” means, for any period, all consolidated expenditures of the Reference Entities (whether paid in cash or accrued as a liability, including the portion of Capital Lease Obligations originally incurred during such period that are capitalized) during such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or equipment” or comparable items, but excluding for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, in an amount not exceeding any insurance proceeds received in connection with such destruction or damage.

“Capital Lease Obligations” means the obligations of the Reference Entities to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on the consolidated balance sheet of the Corporation under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Class A Restricted Voting Shares” has the meaning ascribed thereto in Section 1.

“Class B Non-Voting Shares” has the meaning ascribed thereto in Section 2.

“Constrained Class” means persons who are not Canadians.

“Corporation” means Microcell Telecommunications Inc., formerly 4130910 Canada Inc.

“Corporation Transaction Notice” means a written notice from the Corporation to each person who, at the date of such mailing or delivery or on the record date fixed for such purpose, is the person registered in the records of the Corporation as the holder of the

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Transaction Shares to be redeemed, converted or exchanged, as the case may be. Such notice shall be delivered to, or mailed by ordinary prepaid post addressed to, the last address of such holder as it appears in the records of the Corporation, or in the event of the address of any such holder not appearing in the records of the Corporation, then to the last address of such holder known to the Corporation, at least ten (10) Business Days before the date specified for redemption, conversion or exchange, as the case may be. Such notice shall describe the redemption, conversion or exchange being effected, as the case may be, the date on which same is to take place and, if part only of the Transaction Shares held by the person to whom it is addressed is to be redeemed, converted or exchanged, as the case may be, the number thereof to be so redeemed, converted or exchanged, as the case may be.

“Credit Facilities” means, collectively, the credit agreements governing the Tranche A Exit Facility, Tranche B Debt and Tranche C Debt, respectively, as amended, restated or supplemented from time to time.

“Distress Preferred Shares” means shares that qualify as “distress preferred shares” for purposes of the ITA.

“EBITDA” means operating income (loss) of the Corporation excluding restructuring charges, impairment of intangible assets, depreciation and amortization, all calculated in accordance with GAAP.

“ECF EBITDA” means operating income (loss) plus, to the extent deducted in calculating operating income (loss), non-cash restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

“Effective Date” means the date upon which the Plan is implemented and becomes effective in accordance with its terms.

“Equity Securities” means any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of a Reference Entity’s capital, whenever issued, including any interest in a partnership, limited partnership or other similar entity and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.

“Excess Cash Flow” means, for any fiscal year of the Corporation, consolidated ECF EBITDA of the Reference Entities for such period minus the sum (without duplication) of (i) scheduled principal payments made by the Reference Entities in respect of the Tranche B Debt during such period and scheduled principal payments made by the Reference Entities in respect of the Tranche C Debt during such period, (ii) principal payments made by the Reference Entities during such period under the Tranche A Exit Facility (including, under any Permitted Additional Exit Facility Debt), to the extent that such payments result in a corresponding decrease in the commitment amounts under the Tranche A Exit Facility, (iii) the principal portion of scheduled payments made by the Reference Entities on Capital Lease Obligations to the extent such Capital Lease Obligations and payments are permitted under the Tranche A Exit Facility and the

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Tranche B Debt, (iv) cash interest paid by the Reference Entities in respect of such fiscal year, (v) Capital Expenditures made by the Reference Entities during such fiscal year to the extent permitted by the Tranche A Exit Facility and the Tranche B Debt and (vi) cash taxes applicable to such fiscal year paid or payable by the Reference Entities prior to the date of determination.

“Fair Market Value” means (a) with respect to any asset or group of assets (other than a marketable security) at any date, the value of the consideration obtainable in a sale of such asset at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal, and (b) with respect to any marketable security at any date, the closing sale price of such marketable security on the Business Day next preceding such date, or, if there is no such closing sale price of such marketable security, the final price for the purchase of such marketable security at face value quoted on such business day by a leading financial institution.

“First Instruments” means the First Preferred Voting Shares, First Voting Units, First Preferred Non-Voting Shares and First Non-Voting Units, collectively.

“First Non-Voting Unit” means a First Unit which includes a First Preferred Non-Voting 2 Share.

“First Notes” means a series of subordinated convertible 9% notes of the Corporation in an amount equal to the aggregate FPS Redemption Price included in the First Units issuable pursuant to a certain First Unit Indenture between the Corporation and Computershare Trust Company of Canada as trustee to be dated the Effective Date.

“First Preferred Non-Voting Shares” has the meaning ascribed thereto in Subsection 3.4.

“First Preferred Non-Voting 2 Shares” has the meaning ascribed thereto in Subsection 3.5.

“First Preferred Voting Shares” has the meaning ascribed thereto in Subsection 3.2.

“First Preferred Voting 2 Shares” has the meaning ascribed thereto in Subsection 3.3.

“First Unit” means a unit consisting of a First Note together with one First Preferred Voting 2 Share or one First Preferred Non-Voting 2 Share, as the case may be.

“First Voting Unit” means a First Unit which includes a First Preferred Voting 2 Share.

“FPS Accretion Amount” means, as at any particular date, the amount equal to: the product obtained by the multiplication of (X) 0.045 by (Y) the FPS Redemption Price as

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of the end of the immediately preceding semi-annual period (as calculated from time to time).

“FPS Redemption Price” means $15.00 per First Preferred Voting Share or per First Preferred Non-Voting Share as adjusted from time to time as set forth herein, as the case may be.

“FPS2 Redemption Price” means $0.0001 per First Preferred Voting 2 Share or per First Preferred Non-Voting 2 Share, as the case may be.

“Fundamental Transaction” means any amalgamation, arrangement, capital reorganization or other form of business combination of the Corporation with or into any other corporation resulting in (i) any reclassification or exchange of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, into other shares or securities of the Corporation or (ii) an adjustment in the number of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be.

“Funded Debt” means obligations in respect of borrowed money, whether arising under credit agreements, notes, debentures or other debt instruments.

“GAAP” means generally accepted accounting principles in Canada as in effect from time to time.

“Grandfathered Holder” has the meaning set forth in Section 5.

“Holder Transaction Notice” means a written notice to the transfer agent of the Transaction Shares executed by the person registered in the records of the Corporation as the holder of the Transaction Shares, or by his or her attorney duly authorized in writing and specifying the number of Transaction Shares which the holder thereof desires to have exchanged or converted, as the case may be, and accompanied by: (a) if share certificates were issued to such holder, the share certificate or certificates representing the Transaction Shares which such holder desires to exchange or convert; (b) letters of transmittal, directions, transfers, powers of attorney and other documentation duly completed and executed by the person registered in the records of the Corporation as the holder of the Transaction Shares to be exchanged or converted or by his or her attorney duly authorized in writing as is specified by the transfer agent for the Transaction Shares, acting reasonably, as being required to give full effect to the exchange or conversion; (c) a statement as to the class or series of shares into which the Transaction Shares are being exchanged or converted; and (d) a duly completed and executed Residency Declaration, if applicable.

“Initial Issue Price” means an amount of $15.00 per New Instrument.

“In-the-Money” means that, as of any particular trading day, the Class A Restricted Voting Shares and Class B Non-Voting Shares continue to be listed and posted for trading on a Recognized Exchange and the Average Common Share Price as of such

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trading day is equal to or in excess of the then current FPS Redemption Price or SPS Redemption Price, as the case may be.

“ITA” means the Income Tax Act (Canada) and the regulations enacted thereunder, as amended from time to time.

“Liquidation Event” means a winding-up, liquidation or dissolution of the Corporation or any other distribution of its assets for the purpose of winding-up its affairs or otherwise.

“Mandatory Payments” shall have the meaning ascribed thereto in Section 6.

“Maximum Aggregate Holdings” means an aggregate of 33 ^1/3% of the total number of Voting Shares (or such other percentage of the total number of Voting Shares that may be permitted to be held by or on behalf of persons in the Constrained Class under the Canadian Ownership and Control Provisions without resulting in a contravention of the Canadian Ownership and Control Provisions applicable to any telecommunications common carrier in which the Corporation has an ownership interest), which is the total number of Voting Shares that may be held from time to time by or on behalf of persons in the Constrained Class.

“Net Proceeds” means, (a) with respect to any Asset Disposition, the gross amount received by the Reference Entities from such Asset Disposition, including proceeds of any insurance policies received by the Reference Entities in connection with such Asset Disposition and amounts received by the Reference Entities pursuant to any expropriation proceeding or condemnation proceeding in connection with such Asset Disposition, minus the sum of (i) the amount, if any, of all Taxes paid or payable by the Reference Entities directly resulting from such Asset Disposition (including the amount, if any, estimated by the relevant Reference Entity in good faith at the time of such Asset Disposition for Taxes payable by the Reference Entities on or measured by net income or gain resulting from such Asset Disposition, taking into account any Tax losses or credits available or to be available to the Reference Entities at the time such Taxes are payable that are not used to offset other income or gains), and (ii) the reasonable out-of-pocket costs and expenses incurred by the Reference Entities in connection with such Asset Disposition (including reasonable brokerage commissions and customary fees and expenses of counsel, investment bankers, accountants and other advisors paid to a Person other than an affiliate of the Reference Entities), and (b) with respect to any issuance of equity securities, the gross amount received by the Reference Entities from such issuance of equity securities, minus the reasonable out-of-pocket costs and expenses incurred by the Reference Entities in connection with such issuance of equity securities (including reasonable, legal, accounting, underwriting and brokerage fees and expenses paid to a Person other than an affiliate of the Reference Entities). For greater certainty, Net Proceeds in respect of the issuance of Equity Securities by a Reference Entity to another Reference Entity shall be nil.

“New Instruments” means the First Instruments and the Second Instruments.

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“Non-Canadian Secured Creditors” means holders of First Preferred Non-Voting Shares and Second Preferred Non-Voting Shares entitled pursuant to the terms of the Plan to convert in the aggregate, each on a pro rata basis, either (i) up to 30,000 First Preferred Non-Voting Shares into 30,000 First Preferred Voting Shares, (ii) 30,000 Second Preferred Non-Voting Shares into 30,000 Second Preferred Voting Shares or (iii) a combination of the above not exceeding 30,000 shares in the aggregate.

“Non-Voting Shares” means, collectively, the Class B Non-Voting Shares, First Preferred Non-Voting Shares, First Preferred Non-Voting 2 Shares, Second Preferred Non-Voting Shares and Second Preferred Non-Voting 2 Shares and “Non-Voting Share” means any one of such shares.

“Permitted Additional Exit Facility Debt” means secured indebtedness, in an aggregate principal amount not exceeding an amount equal to Cdn$75,000,000 less the principal amount of the Tranche A Exit Facility on the Effective Date, incurred by Solutions at any time after such date, by way of an increase in the commitments under the Tranche A Exit Facility.

“Plan” means the plan of reorganization and of compromise and arrangement with respect to Microcell Telecommunications Inc. (to be designated 2861399 Canada Inc.) as of the Effective Date and certain of its subsidiaries filed pursuant to the Companies Creditors’ Arrangement Act and the Act.

“Radiocommunications Act” the Radiocommunications Act (Canada) R.S.C., c. R-2 and the regulations thereunder, as amended from time to time.

“Recognized Exchange” means the TSX or any “prescribed Canadian stock exchange” within the meaning of the ITA.

“Reference Entities” means the Corporation and its subsidiaries, other than Unrestricted Subsidiaries.

“Regulations” means the regulations under the Act as now enacted or as the same may from time to time be amended, varied, replaced, restated, re-enacted or supplemented.

“Required Amounts” shall have the meaning ascribed thereto in Section 6.

“Residency Declaration” means a declaration by a person attesting whether such person is Canadian or non-Canadian, in the form approved by the Corporation from time to time;

“SEC” means the United States Securities and Exchange Commission.

“Second Instruments” means Second Preferred Voting Shares, Second Voting Units, Second Preferred Non-Voting Shares and Second Non-Voting Units.

“Second Non-Voting Unit” means a Second Unit which includes a Second Preferred Non-Voting 2 Share.

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“Second Notes” means a new series of subordinated convertible 9% notes of the Corporation in an amount equal to the aggregate SPS Redemption Price, included in the Second Units issuable pursuant to a certain Second Unit Indenture between the Corporation and Computershare Trust Company of Canada as trustee to be dated the Effective Date.

“Second Preferred Non-Voting Shares” has the meaning ascribed thereto in Subsection 4.4.

“Second Preferred Non-Voting 2 Shares” has the meaning ascribed thereto in Subsection 4.5.

“Second Preferred Voting Shares” has the meaning ascribed thereto in Subsection 4.2.

“Second Preferred Voting 2 Shares” has the meaning ascribed thereto in Subsection 4.3.

“Second Unit” means a unit consisting of a Second Note together with one Second Preferred Voting 2 Share or one Second Preferred Non-Voting 2 Share, as the case may be.

“Second Voting Unit” means a Second Unit which includes a Second Preferred Voting 2 Share.

“Solutions” means Microcell Solutions Inc., a corporation resulting from the amalgamation pursuant to the Act of 4130880 Canada Inc., Microcell Connexions Inc., Microcell Solutions Inc., Microcell Capital Inc., Microcell Labs Inc., Microcell i5 Inc. and Masq Inc. on the date of implementation of the Plan.

“SPS Accretion Amount” means, as at any particular date, the amount equal to the product obtained by the multiplication of (X) 0.045 by (Y) the SPS Redemption Price as of the end of the immediately preceding semi-annual period (as calculated from time to time).

“SPS Redemption Price” means $15.00 per Second Preferred Voting Share or per Second Preferred Non-Voting Share (as adjusted from time to time as provided herein), as the case may be.

“SPS2 Redemption Price” means $0.0001 per Second Preferred Voting 2 Share or per Second Preferred Non-Voting 2 Share, as the case may be.

“Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, unemployment insurance payments and workers’ compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties with respect thereto, imposed by any governmental authority (including federal, state,

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provincial, municipal and foreign governmental authorities), and whether disputed or not.

“Telecommunications Act” means the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time.

“Tranche A Exit Facility” means the secured revolving credit facility in the aggregate principal amount of at least $25,000,000 and not more than $75,000,000 established in favour of Solutions pursuant to a certain credit agreement to be dated the Effective Date between inter alia, Solutions and JP Morgan Chase Bank as Agent, as amended, restated or supplemented from time to time, and includes any hedging arrangements entered into by Solutions in accordance with the provisions of such credit agreement.

“Tranche B Debt” means the certain term loan to be made to consisting of a Canadian dollar series and a U.S. dollar series pursuant to a certain credit agreement to be dated the Effective Date between, inter alia, Solutions and JP Morgan Chase Bank as Agent, as amended, restated or supplemented from time to time.

“Tranche C Debt” means the secured non-revolving term loans in the aggregate principal amount of no more than $50,000,000 to be issued by Solutions pursuant to a certain Credit Agreement to be dated the Effective Date between, inter alia, Solutions and JP Morgan Chase Bank as Agent, as amended, restated or supplemented from time to time.

“Transfer Agent” means the transfer agent from time to time for such type or class of securities of the Corporation as the context may require.

“Transaction Shares” means shares of any class or series in the capital of the Corporation being redeemed, exchanged or converted, as the case may be, pursuant to any of the provisions hereof.

“TSX” means the Toronto Stock Exchange, a division of TSX Inc. through which the senior listing operations of TSX Group Inc. are conducted.

“Unrestricted Subsidiaries” means Inukshuk Internet Inc. and Telcom Investments Inc. (but only for so long as the sole activity of Telcom Investments Inc. is serving as general partner of GSM Capital Partners) and any other subsidiary of the Corporation identified as such from time to time in the financial reports of the Corporation.

“Voting Shares” means, collectively, the Class A Restricted Voting Shares, First Preferred Voting Shares, First Preferred Voting 2 Shares, Second Preferred Voting Shares and Second Preferred Voting 2 Shares and “Voting Share” means any one of such shares.

“Warrants” means, collectively, the 2005 warrants and 2008 warrants issued by the Corporation pursuant to certain warrant indentures between the Corporation and Computershare Trust Company of Canada, as trustee, each to be dated as of the Effective Date.

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B)     Notices

On or after the date specified for a redemption, conversion or exchange in any Corporation Transaction Notice, the Corporation shall give effect to the proposed redemption, conversion or exchange, as the case may be, upon presentation and surrender of the certificates for the Transaction Shares so affected at the registered office of the Corporation or at such other place or places as may be specified in such notice, and such certificates shall thereupon be cancelled, and the Transaction Shares represented thereby shall thereupon be redeemed, converted or exchanged, as the case may be. From and after the date specified in such notice, the holders of the Transaction Shares called for redemption, exchange or conversion, as the case may be, shall not be entitled to exercise any of the rights of the holders thereof, except the right to receive the consideration for such redemption, exchange or conversion, as the case may be, unless the Corporation shall not proceed with such transaction, in which case the rights of the holders of such Transaction Shares shall remain unaffected. On or before the date specified in such notice, the Corporation shall have the right to deposit such consideration with any trust company in Canada named in the notice, to be remitted to or to the order of the respective holders of such Transaction Shares upon presentation and surrender of the certificates representing the same and, upon such deposit being made or upon the date specified for redemption, conversion or exchange, as the case may be, whichever is later, the Transaction Shares in respect whereof such deposit shall have been made, shall be deemed to be redeemed, exchanged or converted, as the case may be, and the rights of the respective holders thereof, after such deposit or after such date, as the case may be, shall be limited to receiving the consideration to which they are entitled in respect of their respective Transaction Shares against presentation and surrender of the certificates representing such Transaction Shares.

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	The classes and maximum number of shares that the Corporation is authorized to issue are:
	An unlimited number of Class A Restricted Voting Shares;
	An unlimited number of Class B Non-Voting Shares;
	An unlimited number of First Preferred Shares, issuable in series as First Preferred Voting Shares, First Preferred Non-Voting Shares, First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares; and
	An unlimited number of Second Preferred Shares, issuable in series as Second Preferred Voting Shares, Second Preferred Non-Voting Shares, Second Preferred Voting Series 2 Shares and Second Preferred Non-Voting 2 Shares.
1.	CLASS A RESTRICTED VOTING SHARES
	Subject to the Articles, the Class A Restricted Voting Shares shall have attached thereto the rights, privileges, restrictions and conditions set forth in this Section 1.

1.1.	Voting.
	Subject to the restrictions contained in Section 5 and subject to the Articles, each Class A Restricted Voting Share entitles the holder to receive notice of, to attend and to exercise (in person or by proxy) one vote at any meeting of shareholders of the Corporation (except meetings at which only holders of another specified class or series of shares are entitled to vote pursuant to the provisions hereof or pursuant to the Act).
1.2.	Dividends.
	Subject to Section 6, the Board may declare and cause to be paid dividends to the holders of the Class A Restricted Voting Shares from any assets at the time properly applicable to the payment of dividends, pari passu with the holders of the Class B Non-Voting Shares, on a per share basis. For purposes of the foregoing, the payment of dividends by way of a stock dividend in Class A Restricted Voting Shares on Class A Restricted Voting Shares and in Class B Non-Voting Shares on Class B Non-Voting Shares in the same number per share shall be considered to be a pari passu payment of dividends.
1.3.	Liquidation Event.
	Subject always to the prior rights of the holders of the First Preferred Shares and the Second Preferred Shares, the holders of the Class A Restricted Voting Shares shall be entitled to receive the remaining assets of the Corporation upon any Liquidation Event, pari passu with the holders of the Class B Non-Voting Shares, on a per share basis.

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1.4 Exchange.

1.4.1

Each Class A Restricted Share may be exchanged into one Class B Non-Voting Share, at any time and from time to time, upon delivery by the holder of such Class A Restricted Share of a duly completed and executed Holder Transaction Notice. If applicable, upon receipt by the transfer agent of such notice, the Corporation shall issue or cause to be issued a share certificate representing fully paid Class B Non-Voting Shares.

1.4.2

The Corporation shall not subdivide its Class A Restricted Voting Shares into a greater number of shares or issue in exchange for such Class A Restricted Voting Shares a greater number of Class A Restricted Voting Shares without, concurrently therewith, effecting a subdivision or exchange of the Class B Non-Voting Shares in the same proportion; and the Corporation shall not reduce the number of Class A Restricted Voting Shares by combination or consolidation of shares or issue in exchange for its outstanding Class A Restricted Voting Shares a smaller number of Class A Restricted Voting Shares without effecting concurrently therewith a combination, consolidation or exchange of shares of the Class B Non-Voting Shares in the same proportion.

2.	CLASS B NON-VOTING SHARES
	Subject to the Articles, the Class B Non-Voting Shares shall have attached thereto the rights, privileges, conditions and restrictions set forth in this Section 2.

2.1.	Voting.
	The holders of the Class B Non-Voting Shares shall be entitled to receive notice of and to attend any meeting of shareholders at which the holders of Class A Restricted Voting Shares are entitled to vote. Notwithstanding the foregoing, the Class B Non-Voting Shares shall not entitle the holders thereof to any voting rights either to vote at any meeting of the shareholders of the Corporation or to sign a resolution in writing, except as otherwise expressly provided in these Articles or in the Act and subject to the restrictions contained in Section 5.
2.2.	Dividends.
	Subject to Section 6, the Board may declare and cause to be paid dividends to the holders of the Class B Non-Voting Shares from any assets at the time properly applicable to the payment of dividends, pari passu with the holders of the Class A Restricted Voting Shares, on a per share basis. For purposes of the foregoing, the payment of dividends by way of a stock dividend in Class A Restricted Voting Shares on Class A Restricted Voting Shares and in Class B Non-Voting Shares on Class B Non-Voting Shares in the same number per share shall be considered to be a pari passu payment of dividends.

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2.3.	Liquidation Event.
	Subject always to the prior rights of the holders of the First Preferred Shares and the Second Preferred Shares, the holders of the Class B Non-Voting Shares shall be entitled to receive the remaining assets of the Corporation upon any Liquidation Event, pari passu with the holders of the Class A Restricted Voting Shares, on a per share basis.
2.4.	Exchange.

2.4.1 Each Class B Non-Voting Share may be or will be, as the case may be, exchanged for one Class A Restricted Voting Share, subject to the provisions of Section 7:

(a)	at the option of the holder exercisable at any time and from time to time by giving a Holder Transaction Notice accompanied by a Residency Declaration whereby such holder attests that it is Canadian. Upon receipt by the transfer agent of such notice and, if applicable, Residency Declaration, the Corporation shall issue or cause to be issued a share certificate representing fully paid Class A Restricted Voting Shares;
(b)	automatically, if and to the extent that the Canadian Ownership and Control Provisions are amended or repealed such that persons in the Constrained Class are permitted to hold Class A Restricted Voting Shares without resulting in a contravention of the Canadian Ownership and Control Provisions provided, however, that no exchange shall occur until at least 1% of the then outstanding Class B Non-Voting Shares can be exchanged; or
(c)	in the circumstances described in paragraph 2.5 hereof, but only in the manner set out therein.

2.4.2 The Corporation shall not subdivide the Class B Non-Voting Shares into a greater number of shares or issue in exchange for the Class B Non-Voting Shares a greater number of Class B Non-Voting Shares without, concurrently therewith, effecting a subdivision or exchange of the Class A Restricted Voting Shares in the same proportion; and the Corporation shall not reduce the number of Class B Non-Voting Shares by combination or consolidation of shares or issue in exchange for its outstanding Class B Non-Voting Shares a smaller number of Class B Non-Voting Shares without effecting concurrently therewith a combination, consolidation or exchange of shares of the Class A Restricted Voting Shares in the same proportion.

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2.5. Coattails.

2.5.1 In paragraphs 2.5.2 through 2.5.8 hereof, the following terms shall have the following meanings:

“Conversion Period” means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date;

“Converted Shares” means Class A Restricted Voting Shares resulting from the conversion of Class B Non-Voting Shares into Class A Restricted Voting Shares pursuant to paragraph 2.5.2 hereof;

“Exclusionary Offer” means an offer to purchase Class A Restricted Voting Shares that:

(a)

must, by reason of applicable securities legislation or the requirements of the TSX or the requirements of the Act, be made to all or substantially all holders of Class A Restricted Voting Shares who are in a province of Canada to which the requirements apply; and

(b)

is not made concurrently with an offer to purchase Class B Non-Voting Shares that is identical to the offer to purchase Class A Restricted Voting Shares in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the Offeror, and in all other material respects (except with respect to the conditions that may be attached to the offer for Class A Restricted Voting Shares), and that has no condition attached thereto other than the right not to take up and pay for Class B Non-Voting Shares tendered if no Class A Restricted Voting Shares are purchased pursuant to the offer for Class A Restricted Voting Shares;

for the purposes of this definition, if an offer to purchase Class A Restricted Voting Shares would be an Exclusionary Offer but for the provisions of clause (b), the varying of any term of such offer shall be deemed to constitute the making of a new offer unless an identical variation concurrently is made to the corresponding offer to purchase Class B Non-Voting Shares;

“Expiry Date” means the last date upon which holders of Class A Restricted Voting Shares may accept an Exclusionary Offer;

“Offer Date” means the date on which an Exclusionary Offer is made;

“Offeror” means a person or company that makes an offer to purchase Class A Restricted Voting Shares (the “bidder”), and includes any associate or affiliate of the bidder or any person or company that is acting

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jointly or in concert with the bidder (whether or not disclosed in the offering document relating to such offer); and

2.5.2	Subject to paragraph 2.5.5 hereof, if an Exclusionary Offer is made, each outstanding Class B Non-Voting Share shall be convertible into one fully paid Class A Restricted Voting Share at the option of the holder thereof exercisable by giving a Holder Transaction Notice at any time during the Conversion Period accompanied by: (a) the share certificate or certificates representing the Class B Non-Voting Shares which the holder desires to convert; and (b) the letters of transmittal, directions, transfers, powers of attorney and other documentation duly executed by the holder or by his or her attorney duly authorized in writing as is specified by the Transfer Agent for the Class A Restricted Voting Shares, acting reasonably, as being required to give full effect to the reconversion into Class B Non-Voting Shares of the Converted Shares as contemplated by paragraphs 2.5.3 and 2.5.4. Upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Class A Restricted Voting Shares as prescribed above and in accordance with paragraph 2.5.4. If less than all of the Class B Non-Voting Shares represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate the number of Class B Non-Voting Shares represented by the original share certificate which are not to be converted.
	Notwithstanding the conversion rights provided for under this paragraph 2.5.2, no holder of Class B Non-Voting Shares shall be entitled to exercise such conversion right if the Offeror under any Exclusionary Offer is acting in concert with such holder, is an associate or an affiliate of such holder or if under any applicable securities laws the shares of such holder and the Offeror are deemed to be held by the same person.
2.5.3	An election by a holder of Class B Non-Voting Shares to exercise the conversion right provided for in paragraph 2.5.2 shall be deemed to also constitute irrevocable elections by such holder (i) to deposit the Converted Shares in acceptance of the Exclusionary Offer (subject to such holder’s rights to subsequently withdraw the shares from the offer in accordance with the terms thereof and applicable law); and (ii) to exercise the right to convert into Class B Non-Voting Shares all Converted Shares in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Shares into Class B Non-Voting Shares pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall become effective at the time such right of withdrawal is exercised. If the right of withdrawal is

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not exercised, any conversion into Class B Non-Voting Shares pursuant to such deemed election shall become effective as follows:

(a)	in respect of an Exclusionary Offer which is completed, any shares which are not otherwise ultimately taken up and paid for under the Exclusionary Offer, immediately following the time by which the Offeror is required under applicable securities legislation to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and
(b)	in respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at which the Exclusionary Offer is abandoned or withdrawn.

2.5.4

No share certificates representing Converted Shares shall be delivered to or to the order of the holders of such shares before such shares are deposited pursuant to the Exclusionary Offer; the Transfer Agent, on behalf of the holders of the Converted Shares, shall deposit pursuant to the Exclusionary Offer a certificate or certificates representing the Converted Shares. Upon completion of the Exclusionary Offer, the Transfer Agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the Exclusionary Offer in respect of the Converted Shares. If Converted Shares are converted into Class B Non-Voting Shares in accordance with the deemed election in paragraph 2.5.3, the Transfer Agent shall deliver to the holders entitled thereto a share certificate representing the Class B Non-Voting Shares resulting from the conversion. The Corporation shall make all arrangements with the Transfer Agent necessary or desirable to give effect to this paragraph 2.5.4.

2.5.5

Subject to paragraph 2.5.6 hereof, the conversion right provided for in paragraph 2.5.2 hereof shall not come into effect if:

(a) prior to the time at which the Exclusionary Offer is made there is delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate, as at the time the Exclusionary Offer is made, more than 50% of the then outstanding Class A Restricted Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder, that such shareholder shall not:

(i) tender any shares in acceptance of the Exclusionary Offer without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date;

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(ii)	make any Exclusionary Offer;
(iii)	act jointly or in concert with any person or company that makes any Exclusionary Offer; or
(iv)	transfer any Class A Restricted Voting Shares, directly or indirectly, during the time at which any Exclusionary Offer is outstanding without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Class A Restricted Voting Shares transferred or to be transferred to each transferee;

or

(b) as of the end of the seventh day after the Offer Date, there has been delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Class A Restricted Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder:

(i)	the number of Class A Restricted Voting Shares owned by the shareholder;
(ii)	that such shareholder is not making the Exclusionary Offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer;
(iii)	that such shareholder shall not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and
(iv)	that such shareholder shall not transfer any Class A Restricted Voting Shares, directly or indirectly, prior to the Expiry Date without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Class A

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Restricted Voting Shares transferred or to be transferred to each transferee;

or

(c) as of the end of the seventh day after the Offer Date a combination of certificates that comply with either clause (a) or (b) from shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Class A Restricted Voting Shares, exclusive of shares owned immediately prior to the Offer Date by the Offeror, has been delivered to the Transfer Agent and to the Secretary of the Corporation.

2.5.6 If a notice referred to in sub-clause 2.5.5(a)(i), 2.5.5(a)(iv), 2.5.5(b)(iii) or 2.5.5(b)(iv) hereof is given and the conversion right provided for in paragraph 2.5.2 hereof has not come into effect, the Transfer Agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of Class A Restricted Voting Shares in respect of which there are subsisting certificates that comply with either clause 2.5.5(a) or 2.5.5(b) hereof. For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as subsisting insofar as the Class A Restricted Voting Shares to which the notice relates are concerned; the transfer that is the subject of any notice referred to in sub-clause 2.5.5(a)(iv) or 2.5.5(b)(iv) hereof shall be deemed to have already taken place at the time of the determination; and the transferee in the case of any notice referred to in sub-clause 2.5.5(a)(iv) or 2.5.5(b)(iv) hereof shall be deemed to be a person or company from whom the Transfer Agent does not have a subsisting certificate unless the Transfer Agent is advised of the identity of the transferee, either by such notice or by the transferee in writing, and such transferee is a person or company from whom the Transfer Agent has a subsisting certificate. If the number of Class A Restricted Voting Shares so determined does not exceed 50% of the number of then outstanding Class A Restricted Voting Shares, exclusive of shares owned immediately prior to the offer by the Offeror, paragraph 2.5.5 hereof shall cease to apply and the conversion right provided for in paragraph 2.5.2 hereof shall be in effect for the remainder of the Conversion Period.

As soon as reasonably possible after the seventh day after the Offer Date, the Corporation shall send to each holder of Class B Non-Voting Shares a notice advising the holders as to whether they are entitled to convert their Class B Non-Voting Shares into Class A Restricted Voting Shares and the reasons therefor. If such notice discloses that they are not so entitled but it is subsequently determined that they are so entitled by virtue of paragraph 2.5.6 or otherwise, the Corporation shall forthwith send another notice to them advising them of that fact and the reasons

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therefor. Failure to send such notice will not adversely affect the rights of the holders of Class B Non-Voting Shares hereunder.

If a notice referred to in paragraph 2.5.6 discloses that the conversion right has come into effect, the notice shall:

(a)	include a description of the procedure to be followed to effect the conversion and to have the Converted Shares tendered under the offer;
(b)	include the information set out in paragraph 2.5.3 hereof; and
(c)	be accompanied by a copy of the Exclusionary Offer and all other material sent to holders of Class A Restricted Voting Shares in respect of such offer, and as soon as reasonably possible after any additional material, including any notice of variation, is sent to the holders of Class A Restricted Voting Shares in respect of the offer, the Corporation shall send a copy of such additional material to each holder of Class B Non-Voting Shares.

2.5.7

Forthwith after sending any notice referred to in paragraph 2.5.6, the Corporation shall cause a press release to be issued to a Canadian national news-wire service, describing the contents of the notice.

2.5.8

Notwithstanding the provisions of the Act, in the event that any Converted Shares are reconverted into Class B Non-Voting Shares pursuant to the provisions of paragraph 2.5.3 above, the stated capital account in respect of such Class B Non-Voting Shares shall be increased by the amount by which the stated capital account maintained for such shares was reduced by the conversion of such shares into Converted Shares.

3.	FIRST PREFERRED SHARES
	Subject to the Articles, the First Preferred Shares shall have attached thereto the rights, privileges, restrictions and conditions set forth in this Section 3.
	The First Preferred Shares shall be issued in the following series, each series to consist of an unlimited number of shares: First Preferred Voting Shares, First Preferred Voting 2 Shares, First Preferred Non-Voting Shares and First Preferred Non-Voting 2 Shares. The First Preferred Shares of all series shall rank on parity with each other with respect to the payment of dividends and the distribution of assets upon a Liquidation Event.
	If the First Preferred Shares are determined to be “taxable preferred shares” other than “short term preferred shares” (as such terms are respectively defined in the ITA), the Corporation will make an election under Subsection 191.2(1) of the ITA to increase its tax liability under Part VI.1 of the ITA to 40% or such other rate required so that no holder of

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such shares would be required to pay tax under Part IV.1 of the ITA on dividends on such shares.

3.1. Anti-Layering

Provided there remain outstanding First Instruments of any type or class representing in the aggregate an Initial Issue Price in excess of $75,000,000, the approval: (i) by written resolution signed by holders of First Instruments representing a majority of the First Instruments then outstanding (measured by reference to their redemption price or face amount, as applicable) or (ii) by a majority of votes cast by the holders of First Instruments represented in person or by proxy at a meeting called for such purpose will be required before the Corporation and its subsidiaries either (X) issue any shares ranking prior to or pari passu with the First Preferred Shares other than any series of First Preferred Shares forming part of First Units issued upon redemption of First Preferred Shares, or (Y) incur Funded Debt (other than as permitted under the Credit Facilities, First Units or Second Units), as a result of which the aggregate consolidated Funded Debt of the Corporation (other than Funded Debt of Unrestricted Subsidiaries) would be in excess of 4.0 times consolidated annual EBITDA (other than EBITDA of Unrestricted Subsidiaries), calculated on a pro forma basis based upon the consolidated EBITDA (other than EBITDA of Unrestricted Subsidiaries) for the four (4) consecutive quarters ended as at the fiscal quarter-end immediately prior to the date of the resolution of the Board approving such incurrence.

3.2. First Preferred Voting Shares

3.2.1 Voting.

Subject to the restrictions contained in Section 5: (a) each First Preferred Voting Share entitles the holder to receive notice of, to attend and to exercise one vote (in person or by proxy) at any meeting of holders of First Preferred Shares as a class or at any meeting of holders of First Preferred Voting Shares as a series; and (b) each holder of First Preferred Voting Shares is entitled to vote together with the holders of the Class A Restricted Voting Shares on an “as converted” basis, on any matter on which holders of the Class A Restricted Voting Shares are entitled to vote.

3.2.2 Dividends.

The holders of the First Preferred Voting Shares shall be entitled to fixed, non-cumulative, preferred dividends at the rate of 9% per annum calculated on the FPS Redemption Price, payable, if declared and subject to Section 6, in cash semi-annually, in arrears, on the 1st day of June and December of each year, commencing on June 1, 2003. All dividends declared on the First Preferred Voting Shares and on the First Preferred Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one series over another but in priority to the payment of any dividend on the Class A Restricted Voting Shares, Class B Non-Voting Shares or any series of Second Preferred Shares.

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3.2.3 Liquidation Event.

Upon any Liquidation Event, the holders of the First Preferred Voting Shares shall be entitled to receive pari passu with the holders of the First Preferred Non-Voting Shares, the First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares and in priority to any payment or distribution in respect of shares of any other class, an amount per share equal to the FPS Redemption Price plus any declared but unpaid dividends. In the event of an insufficiency of assets to pay in full the amounts to which the holders of First Preferred Voting Shares are entitled upon a Liquidation Event, the holders of First Preferred Voting Shares, First Preferred Non-Voting Shares, First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares shall, on a per share basis, participate rateably in any distribution to holders of First Preferred Shares, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.

3.2.4 Conversion.

The First Preferred Voting Shares shall have the following conversion rights:

(a)	each First Preferred Voting Share will be convertible into one Class A Restricted Voting Share at the option of the holder at any time and from time to time, subject always to the provisions of Section 7, upon delivery of a duly completed and executed Holder Transaction Notice. If applicable, upon receipt by the Transfer Agent of such notice, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Class A Restricted Voting Shares;
(b)	if at any time prior to the fifth anniversary of the Effective Date, the Corporation shall complete an offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the then current FPS Redemption Price and the proceeds thereof are used as described in Section 6 hereof, then the First Preferred Voting Shares which remain outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time thereafter, into Class A Restricted Voting Shares, on a share-for-share basis, by way of a Corporation Transaction Notice to such effect; the Corporation Transaction Notice may be given at any time after the completion of the offering of the Class A Restricted Voting Shares and/or Class B Non-Voting Shares provided that the Corporation has applied the proceeds thereof as described in Section 6 or has set aside the monies for application as therein provided for;
(c)	at any time on or after the fifth anniversary of the Effective Date, each First Preferred Voting Share will automatically be converted into one Class A Restricted Voting Share if, on the 25th day (or if such day is not a trading day, then on the next following trading day) after the date of the

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	press release of the Corporation announcing its quarterly or annual financial results, as the case may be, the First Preferred Voting Shares are In-the-Money, by way of a Corporation Transaction Notice to such effect; and
(d)	under the circumstances described in subparagraph 3.2.6(b)(ii).

A holder of First Preferred Voting Shares shall not be entitled to any payment on account of the FPS Redemption Price upon exercise of any conversion right by such holder or by the Corporation pursuant to this paragraph 3.2.4.

All conversion rights provided for in this paragraph 3.2.4 are subject to a registration statement having been filed by the Corporation and having been declared effective by the SEC under the 1933 Act or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting form the exercise of such conversion right. If such exemption is not available as of November 1, 2003, the Corporation will file, on a date not earlier than November 1, 2003 and not later than December 1, 2003, such a registration statement with the SEC and will use reasonable commercial efforts to have the SEC declare such registration statement effective.

3.2.5 Exchange.

Each First Preferred Voting Share may be exchanged for one First Preferred Non-Voting Share, at the option of the holder, at any time upon the provision by such holder of a duly completed and executed Holder Transaction Notice. Upon receipt by the Transfer Agent of any such notice, the Corporation shall issue or cause to be issued a share certificate representing fully paid First Preferred Non-Voting Shares.

3.2.6 Redemption.

The First Preferred Voting Shares may be, or will be, as the case may be, redeemed in the following circumstances:

(a)

at any time, in whole or in part, at the option of the Corporation, at a price per share equal to the then current FPS Redemption Price, in cash, provided however that holders thereof may exercise any conversion rights pursuant to Section 3.2.4(a) prior to any such redemption;

(b)

on the tenth anniversary of the Effective Date (i) the Corporation will redeem all of the First Preferred Voting Shares at a price per share equal to the then current FPS Redemption Price, payable in cash or (ii) at the Corporation’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares are then listed and posted for trading on a Recognized Exchange, the First Preferred Voting Shares may be redeemed in consideration of the issuance of such number of Class A Restricted Voting Shares as is equal to the quotient obtained when the

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FPS Redemption Price as at the tenth anniversary of the Effective Date is divided by the Average Common Share Price as of the day before the tenth anniversary of the Effective Date;

(c)

the Corporation will redeem the First Preferred Voting Shares prior to the tenth anniversary of the Effective Date at the then current FPS Redemption Price to the extent that the Corporation has remaining Excess Cash Flow, proceeds from Asset Dispositions and proceeds from equity offerings available for such purpose as provided in Section 6 hereof;

(d)

the First Preferred Voting Shares are redeemable at any time prior to the tenth anniversary of the Effective Date, in whole, at the option of the Corporation, upon satisfaction of the FPS Redemption Price as at the redemption date by issuing First Voting Units listed on a Recognized Exchange comprising First Notes having, in the aggregate, principal amounts equal to the then current FPS Redemption Price, provided that, concurrently with such redemption, First Preferred Non-Voting Shares are redeemed pursuant to 3.4.6(d) and Second Preferred Shares are redeemed pursuant to Section 4.2.6(d) and Section 4.4.6(d).

Any redemption of First Preferred Voting Shares pursuant to this Section 3.2.6 shall be effected by way of a Corporation Transaction Notice to such effect sent by the Corporation to each holder of First Preferred Voting Shares to be redeemed, provided that in the case of a redemption under paragraph (a) above, the Corporation Transaction Notice shall be sent at least fifteen (15) Business Days before the date specified for redemption of First Preferred Voting Shares, during which period the holders thereof may, if they so elect, exercise the conversion rights attached to such First Preferred Voting Shares pursuant to Section 3.2.4(a) by way of a Holder Transaction Notice to such effect.

So long as any First Preferred Voting Shares remain outstanding, on November 1st and May 1st of every year, starting on November 1st, 2003, the FPS Redemption Price shall be increased by an amount equal to the FPS Accretion Amount and reduced by the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.

In the event of any redemption or mandatory conversion of First Preferred Voting Shares other than as at the end of a semi-annual period, the FPS Redemption Price of the First Preferred Voting Shares to be redeemed or converted shall be increased by an amount equal to the FPS Accretion Amount, adjusted on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion and reduced by the amount of any cash dividend that has been declared and paid on such shares in respect of such period.

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3.3. First Preferred Voting 2 Shares

3.3.1 Voting.

Subject to the restrictions contained in Section 5: (a) each First Preferred Voting 2 Share entitles the holder to receive notice of, to attend and to exercise one vote (in person or by proxy) at any meeting of the holders of First Preferred Shares as a class or any meeting of holders of First Preferred Voting 2 Shares as a series; and (b) each holder of First Preferred Voting 2 Shares shall be entitled to vote together with the holders of the Class A Restricted Voting Shares on a “as converted” basis on any matter on which holders of Class A Restricted Voting Shares are entitled to vote.

3.3.2 Liquidation Event.

Upon any Liquidation Event, the holders of First Preferred Voting 2 Shares shall be entitled to receive, pari passu with the holders of First Preferred Non-Voting 2 Shares, First Preferred Voting Shares and First Preferred Non-Voting Shares and in priority to any other class of shares an amount per share equal to the FPS2 Redemption Price. In the event of an insufficiency of assets to pay in full the amounts to which the holders of First Preferred Voting 2 Shares are entitled upon a Liquidation Event, holders of First Preferred Voting 2 Shares, First Preferred Non-Voting 2 Shares, First Preferred Voting Shares and First Preferred Non-Voting Shares shall participate rateably in any distribution to holders of First Preferred Shares, on a per share basis, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.

3.3.3 Redemption.

Each First Preferred Voting 2 Share will be automatically redeemed at the FPS2 Redemption Price upon the repayment, redemption or conversion of the First Unit of which it forms part. The First Preferred Voting 2 Shares shall not be redeemed except as set forth in this paragraph 3.3.3

3.3.4 Dividends.

The holders of First Preferred Voting 2 Shares shall not be entitled to receive any dividends in respect thereof.

3.4. First Preferred Non-Voting Shares

3.4.1 Voting.

The holders of the First Preferred Non-Voting Shares shall be entitled to receive notice of and to attend any meeting of shareholders at which the holders of First Preferred Voting Shares are entitled to vote. Notwithstanding the foregoing, the First Preferred Non-Voting Shares shall not entitle the holders thereof to any voting rights either to vote at any meeting of the shareholders of the Corporation

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or to sign a resolution in writing, except as otherwise expressly provided in these Articles or in the Act and subject to the restrictions contained in Section 5.

3.4.2 Dividends.

The holders of the First Preferred Non-Voting Shares shall be entitled to fixed, non-cumulative, preferred dividends at the rate of 9% per annum calculated on the FPS Redemption Price payable, if declared and subject to Section 6, in cash semi-annually in arrears, on the 1st day of June and December of each year commencing on June 1, 2003. All dividends declared on the First Preferred Voting Shares and on the First Preferred Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share for share, without any preference or priority of one series over another but in priority to the payment of any dividend on the Class A Restricted Voting Shares, Class B Non-Voting Shares or any series of Second Preferred Shares.

3.4.3 Liquidation Event.

Upon any Liquidation Event, the holders of the First Preferred Non-Voting Shares shall be entitled to receive, pari passu with the holders of First Preferred Voting Shares, First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares, and in priority to any payment or distribution in respect of shares of any other class, an amount per share equal to the FPS Redemption Price plus any declared but unpaid dividends. In the event of an insufficiency of assets to pay in full the amounts to which the holders of the First Preferred Non-Voting Shares are entitled upon a Liquidation Event, the holders of First Preferred Voting Shares, First Preferred Non-Voting Shares, First Preferred Voting 2 Shares and First Preferred Non-Voting 2 Shares shall participate rateably in any distribution to holders of First Preferred Shares, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.

3.4.4 Conversion.

The First Preferred Non-Voting Shares shall have the following conversion rights:

(a)

each First Preferred Non-Voting Share will be convertible into one Class B Non-Voting Share at the option of the holder at any time and upon the provision by such holder of a duly completed and executed Holder Transaction Notice. If applicable, upon receipt by the Transfer Agent of such notice, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Class B Non-Voting Shares;

(b)

if at any time prior to the fifth anniversary of the Effective Date, the Corporation shall complete an offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the current FPS Redemption Price and the proceeds thereof are used as

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described in Section 6, the First Preferred Non-Voting Shares which remain outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time thereafter, into Class B Non-Voting Shares, on a share-for-share basis, by way of a Corporation Transaction Notice to such effect; the Corporation Transaction Notice may be given at any time after the completion of the offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares provided that the Corporation has applied the proceeds thereof as described in Section 6 or has set aside the monies for application as therein provided for;

(c)

at any time on or after the fifth anniversary of the Effective Date, each First Preferred Non-Voting Share will automatically be converted into one Class B Non-Voting Share if on the 25th day (or if such day is not a trading day, then on the next following trading day) after the date of the press release of the Corporation announcing its quarterly or annual financial results, as the case may be, the First Preferred Non-Voting Shares are In-the-Money, by way of a Corporation Transaction Notice to such effect; and

(d)

under the circumstances described in subparagraph 3.4.6(b)(ii).

A holder of First Preferred Non-Voting Shares shall not be entitled to any payment on account of the FPS Redemption Price upon exercise of any conversion right by each holder or by the Corporation pursuant to this paragraph 3.4.4.

All conversion rights provided for in this paragraph 3.4.4 are subject to a registration statement having been filed by the Corporation and having become effective under the 1933 Act or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting form the exercise of such conversion right. If such exemption is not available as of November 1, 2003, the Corporation will file, on a date not earlier than November 1, 2003 and not later than December 1, 2003, such a registration statement with the SEC and will use reasonable commercial efforts to have the SEC declare such registration statement effective.

3.4.5 Exchange.

Each First Preferred Non-Voting Share may be or will be, as the case may be, exchangeable for one First Preferred Voting Share, subject to the provisions of Section 7, if:

(a) at the option of the holder exercisable at any time and from time to time by giving a Holder Transaction Notice accompanied by a Residency Declaration whereby such holder attests that it is Canadian. Upon receipt by the Transfer Agent of such notice and, if applicable, Residency

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Declaration, the Corporation shall issue or cause to be issued a share certificate representing fully-paid First Preferred Voting Shares;

(b)

automatically, if and to the extent that the Canadian Ownership and Control Provisions are amended or repealed such that persons in the Constrained Class are permitted to hold First Preferred Voting Shares without resulting in a contravention of the Canadian Ownership and Control Provisions, provided no conversion thereunder shall occur until at least 1% of the then outstanding First Preferred Non-Voting Shares can be exchanged; or

(c)

any of the circumstances described in paragraph 3.4.7 hereof should occur, but only in the manner set out therein.

Notwithstanding Section 3.4.5(a), Non-Canadian Secured Creditors may exchange, by way of a Holder Transaction Notice to such effect, in the aggregate, each on a pro rata basis, either (i) up to 30,000 First Preferred Non-Voting Shares for 30,000 First Preferred Voting Shares, (ii) 30,000 Second Preferred Non-Voting Shares for 30,000 Second Preferred Voting Shares, or (iii) a combination of the above not exceeding 30,000 shares, provided that such exchange would not contravene the Canadian Ownership and Control Provisions.

3.4.6 Redemption.

The First Preferred Non-Voting Shares may be, or will be, as the case may be, redeemed in the following circumstances:

(a)	at any time, in whole or in part, at the option of the Corporation, at a price per share equal to the then current FPS Redemption Price, in cash, provided however that holders thereof may exercise any conversion rights prior to any such redemption;
(b)	on the tenth anniversary of the Effective Date (i) the Corporation will redeem all of the First Preferred Non-Voting Shares at a price per share equal to the then current FPS Redemption Price payable in cash or (ii) at the Corporation’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares are then listed and posted for trading on a Recognized Exchange, the First Preferred Non-Voting Shares may be redeemed in consideration of the issuance of such number of Class B Non-Voting Shares as is equal to the quotient obtained when the FPS Redemption Price as at the tenth anniversary of the Effective Date is divided by the Average Common Share Price as of the day before the tenth anniversary of the Effective Date;
(c)	the Corporation will redeem the First Preferred Non-Voting Shares prior to the tenth anniversary of the Effective Date at the then current FPS Redemption Price to the extent that the Corporation has remaining Excess

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Cash Flow, proceeds from Asset Dispositions and proceeds from equity offerings available for such purposes as provided in Section 6 hereof;

(d) the First Preferred Non-Voting Shares are redeemable at any time prior to the tenth anniversary of the Effective Date, in whole, at the option of the Corporation, upon satisfaction of the FPS Redemption Price as at the redemption date by issuing First Non-Voting Units listed on a Recognized Exchange comprising First Notes having, in the aggregate, principal amounts equal to the then current FPS Redemption Price, provided that, concurrently with such redemption, First Preferred Voting Shares are redeemed pursuant to Section 3.2.6(d) and Second Preferred Shares are redeemed pursuant to Section 4.2.6(d) and Section 4.4.6(d).

Any redemption of First Preferred Non-Voting Shares pursuant to this Section 3.4.6 shall be effected by way of a Corporation Transaction Notice to such effect sent by the Corporation to each holder of First Preferred Non-Voting Shares to be redeemed, provided that in the case of a redemption under paragraph (a) above, the Corporation Transaction Notice shall be sent at least fifteen (15) Business Days before the date specified for redemption of First Preferred Non-Voting Shares, during which period the holders thereof may, if they so elect, exercise the conversion rights attached to such First Preferred Non-Voting Shares pursuant to Section 3.4.4(a) by way of a Holder Transaction Notice to such effect.

So long as any First Preferred Non-Voting Shares remain outstanding, on November 1^st and May 1^st of every year, starting on November 1^st, 2003, the FPS Redemption Price shall be increased by an amount equal to the FPS Accretion Amount and reduced by the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.

In the event of any redemption or mandatory conversion of First Preferred Non-Voting Shares other than as at the end of a semi-annual period, the FPS Redemption Price of the First Preferred Non-Voting Shares to be redeemed or converted shall be increased by an amount equal to the FPS Accretion Amount, adjusted on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion and reduced by the amount of any cash dividend that has been declared and paid on such shares in respect of such period.

3.4.7 Coattails.

(a) In this Section 3.4.7, the following terms shall have the following meanings:

“Conversion Period” means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date ;

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“Converted Shares” means First Preferred Voting Shares resulting from the conversion of First Preferred Non-Voting Shares into First Preferred Voting Shares pursuant to paragraph (b) hereof;

“Exclusionary Offer” means an offer to purchase First Preferred Voting Shares that:

(i)

must, by reason of applicable securities legislation or the requirements of the TSX or the requirements of the Act, be made to all or substantially all holders of First Preferred Voting Shares who are in a province of Canada to which the requirements apply; and

(ii)

is not made concurrently with an offer to purchase First Preferred Non-Voting Shares that is identical to the offer to purchase First Preferred Voting Shares in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the Offeror, and in all other material respects (except with respect to the conditions that may be attached to the offer for First Preferred Voting Shares), and that has no condition attached thereto other than the right not to take up and pay for First Preferred Non-Voting Shares tendered if no First Preferred Voting Shares are purchased pursuant to the offer for First Preferred Voting Shares;

for the purposes of this definition, if an offer to purchase First Preferred Voting Shares would be an Exclusionary Offer but for the provisions of clause (ii), the varying of any term of such offer shall be deemed to constitute the making of a new offer unless an identical variation concurrently is made to the corresponding offer to purchase First Preferred Non-Voting Shares;

“Expiry Date” means the last date upon which holders of First Preferred Voting Shares may accept an Exclusionary Offer;

“Offer Date” means the date on which an Exclusionary Offer is made;

“Offeror” means a person that makes an offer to purchase First Preferred Voting Shares (the “bidder”), and includes any associate or affiliate of the bidder or any person that is acting jointly or in concert with the bidder (whether or not disclosed in the offering document relating to such offer);

(b) Subject to paragraph (f) hereof, if an Exclusionary Offer is made, each outstanding First Preferred Non-Voting Share shall be convertible into one fully paid First Preferred Voting Share at the option of the holder thereof exercisable by giving a Holder Transaction Notice any time during the Conversion Period accompanied by: (a) the share certificate or certificates representing the First Preferred Non-Voting Shares which the holder desires to convert; and (b) the letters of transmittal, directions,

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transfers, powers of attorney and other documentation duly executed by the holder or by his or her attorney duly authorized in writing as is specified by the Transfer Agent for the First Preferred Voting Shares, acting reasonably, as being required to give full effect to the reconversion into First Preferred Non-Voting Shares of the Converted Shares as contemplated by paragraphs (d) and (e). Upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid First Preferred Voting Shares as prescribed above and in accordance with paragraph (e). If less than all of the First Preferred Non-Voting Shares represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate the number of First Preferred Non-Voting Shares represented by the original share certificate which are not to be converted.

(c)

Notwithstanding the conversion rights provided for under paragraph (b) above, no holder of First Preferred Non-Voting Shares shall be entitled to exercise such conversion right if the Offeror under any Exclusionary Offer is acting in concert with such holder, is an associate or an affiliate of such holder or if under any applicable securities laws the shares of such holder and the Offeror are deemed to be held by the same person.

(d)

An election by a holder of First Preferred Non-Voting Shares to exercise the conversion right provided for in paragraph (b) shall be deemed to also constitute irrevocable elections by such holder (i) to deposit the Converted Shares in acceptance of the Exclusionary Offer (subject to such holder’s rights to subsequently withdraw such Converted Shares from the Exclusionary Offer in accordance with the terms thereof and applicable law); and (ii) to exercise the right to convert into First Preferred Non-Voting Shares all Converted Shares in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Shares into First Preferred Non-Voting Shares pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall become effective at the time such right of withdrawal is exercised. If the right of withdrawal is not exercised, any conversion into First Preferred Non-Voting Shares pursuant to such deemed election shall become effective as follows:

(i) in respect of an Exclusionary Offer which is completed, any shares which are not otherwise ultimately taken up and paid for under the Exclusionary Offer, immediately following the time by which the Offeror is required under applicable securities legislation to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and

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(ii) in respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at which the Exclusionary Offer is abandoned or withdrawn.

(e)

No share certificates representing Converted Shares shall be delivered to or to the order of the holders of such shares before such shares are deposited pursuant to the Exclusionary Offer; the Transfer Agent, on behalf of the holders of the Converted Shares, shall deposit pursuant to the Exclusionary Offer a certificate or certificates representing the Converted Shares. Upon completion of the Exclusionary Offer, the Transfer Agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the Exclusionary Offer in respect of the Converted Shares. If Converted Shares are converted into First Preferred Non-Voting Shares in accordance with the deemed election in paragraph (d), the Transfer Agent shall deliver to the holders entitled thereto a share certificate representing the First Preferred Non-Voting Shares resulting from the conversion. The Corporation shall make all arrangements with the Transfer Agent necessary or desirable to give effect to this paragraph (e).

(f)

Subject to paragraph (g) hereof, the conversion right provided for in paragraph (b) hereof shall not come into effect if:

(i) prior to the time at which the Exclusionary Offer is made there is delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate, as at the time the Exclusionary Offer is made, more than 50% of the then outstanding First Preferred Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder, that such shareholder shall not:

(A)	tender any shares in acceptance of the Exclusionary Offer without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date;
(B)	make any Exclusionary Offer;
(C)	act jointly or in concert with any person that makes any Exclusionary Offer; or
(D)	transfer any First Preferred Voting Share, directly or indirectly, during the time at which any Exclusionary Offer is outstanding without giving the Transfer Agent and the Secretary of the Corporation written notice of such

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transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of First Preferred Voting Shares transferred or to be transferred to each transferee;

or

(ii) as of the end of the seventh day after the Offer Date there has been delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding First Preferred Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder:

(A)	the number of First Preferred Voting Shares owned by the shareholder;
(B)	that such shareholder is not making the Exclusionary Offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer;
(C)	that such shareholder shall not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and
(D)	that such shareholder shall not transfer any First Preferred Voting Shares, directly or indirectly, prior to the Expiry Date without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of First Preferred Voting Shares transferred or to be transferred to each transferee;

or

(iii) as of the end of the seventh day after the Offer Date a combination of certificates that comply with either clause (i) or (ii) from shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding First Preferred Voting Shares, exclusive of shares owned immediately prior, to the Exclusionary

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Offer Date by the Offeror, has been delivered to the Transfer Agent and to the Secretary of the Corporation.

(g)	If a notice referred to in sub-clause 3.4.7(f)(i)(A) or (D) or 3.4.7(f)(ii)(C) or (D) hereof is given and the conversion right provided for in paragraph (b) hereof has not come into effect, the Transfer Agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of First Preferred Voting Shares in respect of which there are subsisting certificates that comply with either subparagraph (f)(i) or (f)(ii) hereof. For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as subsisting insofar as the First Preferred Voting Shares to which the notice relates are concerned; the transfer that is the subject of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to have already taken place at the time of the determination; and the transferee in the case of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to be a person from whom the Transfer Agent does not have a subsisting certificate unless the Transfer Agent is advised of the identity of the transferee, either by such notice or by the transferee in writing, and such transferee is a person from whom the Transfer Agent has a subsisting certificate. If the number of First Preferred Voting Shares so determined does not exceed 80% of the number of then outstanding First Preferred Voting Shares, exclusive of shares owned immediately prior to the offer by the Offeror, paragraph (f) hereof shall cease to apply and the conversion right provided for in paragraph (b) hereof shall be in effect for the remainder of the Conversion Period.
(h)	As soon as reasonably possible after the seventh day after the Offer Date, the Corporation shall send to each holder of First Preferred Non-Voting Shares a notice advising the holders as to whether they are entitled to convert their First Preferred Non-Voting Shares into First Preferred Voting Shares and the reasons therefor. If such notice discloses that they are not so entitled but it is subsequently determined that they are so entitled by virtue of paragraph (g) hereof or otherwise, the Corporation shall forthwith send another notice to them advising them of that fact and the reasons therefor. Failure to send such notice will not adversely affect the rights of the holders of First Preferred Non-Voting Shares hereunder.
(i)	If a notice referred to in paragraph (h) hereof discloses that the conversion right has come into effect, the notice shall:

(i)	include a description of the procedure to be followed to effect the conversion and to have the Converted Shares tendered under the offer;
(ii)	include the information set out in paragraph (d) hereof; and

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	(iii)	be accompanied by a copy of the Exclusionary Offer and all other material sent to holders of First Preferred Voting Shares in respect of such offer, and as soon as reasonably possible after any additional material, including any notice of variation, is sent to the holders of First Preferred Voting Shares in respect of the offer, the Corporation shall send a copy of such additional material to each holder of First Preferred Non-Voting Shares.
(j)	Forthwith after sending any notice referred to in paragraph (h) hereof, the Corporation shall cause a press release to be issued to a Canadian national news-wire service, describing the contents of the notice.
(k)	Notwithstanding the provisions of the Act, in the event that any Converted Shares are reconverted into First Preferred Non-Voting Shares pursuant to the provisions of paragraph (d) above, the stated capital account in respect of such First Preferred Non-Voting Shares shall be increased by the amount by which the stated capital account maintained for such shares was reduced by the conversion of such shares into Converted Shares.

3.5. First Preferred Non-Voting 2 Shares

3.5.1	Voting.
The holders of the First Preferred Non-Voting 2 Shares shall be entitled to receive notice of and to attend any meeting of shareholders at which the holders of First Preferred Voting Shares are entitled to vote. Notwithstanding the foregoing, the First Preferred Non-Voting 2 Shares shall not entitle the holders thereof to any voting rights either to vote at any meeting of the shareholders of the Corporation or to sign a resolution in writing, except as otherwise expressly provided in these Articles and in the Act and subject to the restrictions contained in Section 5.
3.5.2	Liquidation, etc.
Upon any Liquidation Event, the holders of the First Preferred Non-Voting 2 Shares shall be entitled to receive, pari passu with the holders of First Preferred Voting 2 Shares, First Preferred Voting Shares and First Preferred Non-Voting Shares and in priority to any other class of shares an amount per share equal to the FPS2 Redemption Price. In the event of an insufficiency of assets to pay in full the amounts to which the holders of the First Preferred Non-Voting 2 Shares are entitled upon a Liquidation Event, holders of First Preferred Voting 2 Shares, First Preferred Non-Voting 2 Shares, First Preferred Voting Shares and First Preferred Non-Voting Shares shall, on a per share basis, participate rateably in any distribution to the holders of First Preferred Shares, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.

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3.5.3	Exchange.
Each First Preferred Non-Voting 2 Share may be or will be, as the case may be, exchanged for one First Preferred Voting 2 Share, subject always to the provisions of Section 7:
(a)	at the option of the holder exercisable at any time and from time to time by giving a Holder Transaction Notice accompanied by a Residency Declaration whereby such holder attests that it is Canadian. Upon receipt by the Transfer Agent of such notice and, if applicable, Residency Declaration representing the First Non-Voting Units of which the First Preferred Non-Voting 2 Share form part, the Corporation shall issue or cause to be issued certificate or certificates representing First Voting Units;
(b)	automatically, if and to the extent that the Canadian Ownership and Control Provisions are amended or repealed such that persons in the Constrained Class are permitted to hold First Preferred Voting 2 Shares without resulting in a contravention of the Canadian Ownership and Control Provisions provided no exchange hereunder may occur until at least 1% of the then outstanding First Preferred Non-Voting 2 Shares can be exchanged; or
(c)	any of the circumstances described in paragraph 3.5.4 hereof should occur, but only in the manner set out therein.
3.5.4	Coattails.
(a)	In this paragraph 3.5.4 hereof, the following terms shall have the following meanings:
“Conversion Period” means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date ;
“Converted Units” means First Voting Units resulting from the conversion of First Non-Voting Units into First Voting Units pursuant to paragraph (b) hereof;
“Exclusionary Offer” means an offer to purchase First Voting Units that:

(i)	must, by reason of applicable securities legislation or the requirements of the TSX or the requirements of the Act, be made to all or substantially all holders of First Voting Units who are in a province of Canada to which the requirements apply; and
(ii)	is not made concurrently with an offer to purchase First Non-Voting Units that is identical to the offer to purchase First Voting Units in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately

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prior to the offer by the Offeror , and in all other material respects (except with respect to the conditions that may be attached to the offer for First Voting Units), and that has no condition attached thereto other than the right not to take up and pay for First Non-Voting Units tendered if no First Voting Units are purchased pursuant to the offer for First Voting Units;

for the purposes of this definition, if an offer to purchase First Voting Units would be an Exclusionary Offer but for the provisions of clause (ii), the varying of any term of such offer shall be deemed to constitute the making of a new offer unless an identical variation concurrently is made to the corresponding offer to purchase First Non-Voting Units;
“Expiry Date” means the last date upon which holders of First Voting Units may accept an Exclusionary Offer;
“Offer Date” means the date on which an Exclusionary Offer is made;
“Offeror” means a person that makes an offer to purchase First Voting Units (the “bidder”), and includes any associate or affiliate of the bidder or any person that is acting jointly or in concert with the bidder (whether or not disclosed in the offering document relating to such offer); and
(b)	Subject to paragraph (f) hereof, if an Exclusionary Offer is made, each outstanding First Preferred Non-Voting 2 Share shall be convertible into one fully paid First Preferred Voting 2 Share at the option of the holder thereof exercisable by giving a Holder Transaction Notice at any time during the Conversion Period accompanied by: (a) the share certificate or certificates representing the First Non-Voting Units which the holder desires to convert; and (b) the letters of transmittal, directions, transfers, powers of attorney and other documentation duly executed by the holder or by his or her attorney duly authorized in writing as is specified by the Transfer Agent for the First Voting Units, acting reasonably, as being required to give full effect to the reconversion into First Non-Voting Units of the Converted Units as contemplated by paragraphs (d) and (e). The holder shall pay any governmental or other tax imposed on or in respect of such conversion. Upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid First Voting Units as prescribed above and in accordance with paragraph (e). If less than all of the First Non-Voting Units represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate the number of First Non-Voting Units represented by the original share certificate which are not to be converted.
(c)	Notwithstanding the conversion rights provided for under paragraph (b) above, no holder of First Non-Voting Units shall be entitled to exercise

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such conversion right if the Offeror under any Exclusionary Offer is acting in concert with such holder, is an associate or an affiliate of such holder or if under any applicable securities laws the shares of such holder and the Offeror are deemed to be held by the same person.

(d)

An election by a holder of First Non-Voting Units to exercise the conversion right provided for in paragraph (b) shall be deemed to also constitute irrevocable elections by such holder (i) to deposit the Converted Units in acceptance of the Exclusionary Offer (subject to such holder’s rights to subsequently withdraw such Converted Units from the Exclusionary Offer in accordance with the terms thereof and applicable law); and (ii) to exercise the right to convert into First Non-Voting Units all Converted Units in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Units into First Non-Voting Units pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall become effective at the time such right of withdrawal is exercised. If the right of withdrawal is not exercised, any conversion into First Non-Voting Units pursuant to such deemed election shall become effective as follows:

(i)	in respect of an Exclusionary Offer which is completed, any shares which are not otherwise ultimately taken up and paid for under the Exclusionary Offer, immediately following the time by which the Offeror is required under applicable securities legislation to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and
(ii)	in respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at which the Exclusionary Offer is abandoned or withdrawn.

(e) No share certificates representing Converted Units shall be delivered to or to the order of the holders of such shares before such shares are deposited pursuant to the Exclusionary Offer; the Transfer Agent, on behalf of the holders of the Converted Units, shall deposit pursuant to the Exclusionary Offer a certificate or certificates representing the Converted Units. Upon completion of the Exclusionary Offer, the Transfer Agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the Exclusionary Offer in respect of the Converted Units. If Converted Units are converted into First Non-Voting Units in accordance with the deemed election in paragraph (d), the Transfer Agent shall deliver to the holders entitled thereto a share certificate representing the First Non-Voting Units resulting from the conversion. The Corporation shall make all

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arrangements with the Transfer Agent necessary or desirable to give effect to this paragraph (e).

(f) Subject to paragraph (g) hereof, the conversion right provided for in paragraph (b) hereof shall not come into effect if:

(i) prior to the time at which the Exclusionary Offer is made there is delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate, as at the time the Exclusionary Offer is made, more than 50% of the then outstanding First Voting Units, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder, that such shareholder shall not:

(A)	tender any shares in acceptance of the Exclusionary Offer without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date;
(B)	make any Exclusionary Offer;
(C)	act jointly or in concert with any person that makes any Exclusionary Offer; or
(D)	transfer any First Preferred Voting 2 Share, directly or indirectly, during the time at which any Exclusionary Offer is outstanding without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of First Voting Units transferred or to be transferred to each transferee;

or

(ii)

as of the end of the seventh day after the Offer Date there has been delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding First Voting Units, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder:

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(A)	the number of First Voting Units owned by the shareholder;
(B)	that such shareholder is not making the Exclusionary Offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer;
(C)	that such shareholder shall not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and
(D)	that such shareholder shall not transfer any First Voting Units, directly or indirectly, prior to the Expiry Date without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of First Voting Units transferred or to be transferred to each transferee;

or

(iii) as of the end of the seventh day after the Offer Date a combination of certificates that comply with either clause (i) or (ii) from shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding First Voting Units, exclusive of shares owned immediately prior, to the Exclusionary Offer Date by the Offeror, has been delivered to the Transfer Agent and to the Secretary of the Corporation.

(g) If a notice referred to in sub-clause 3.5.4(f)(i)(A) or (D) or 3.5.4(f)(ii)(C) or (D) hereof is given and the conversion right provided for in paragraph (b) hereof has not come into effect, the Transfer Agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of First Voting Units in respect of which there are subsisting certificates that comply with either clause (f)(i) or (f)(ii) hereof. For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as subsisting insofar as the First Voting Units to which the notice relates are concerned; the transfer that is the subject of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to have already taken place at the time of the determination; and the transferee in the case of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to be a person from whom the Transfer Agent does not have a subsisting certificate unless the Transfer Agent is

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	advised of the identity of the transferee, either by such notice or by the transferee in writing, and such transferee is a person from whom the Transfer Agent has a subsisting certificate. If the number of First Voting Units so determined does not exceed 80% of the number of then outstanding First Voting Units, exclusive of shares owned immediately prior to the offer by the Offeror, paragraph (f) hereof shall cease to apply and the conversion right provided for in paragraph (b) hereof shall be in effect for the remainder of the Conversion Period.
(h)	As soon as reasonably possible after the seventh day after the Offer Date, the Corporation shall send to each holder of First Non-Voting Units a notice advising the holders as to whether they are entitled to convert their First Non-Voting Units into First Voting Units and the reasons therefor. If such notice discloses that they are not so entitled but it is subsequently determined that they are so entitled by virtue of subparagraph (g) or otherwise, the Corporation shall forthwith send another notice to them advising them of that fact and the reasons therefor. Failure to send such notice will not adversely affect the rights of the holders of First Non-Voting Units hereunder.
(i)	If a notice referred to in subparagraph (h) discloses that the conversion right has come into effect, the notice shall:

(i)	include a description of the procedure to be followed to effect the conversion and to have the Converted Units tendered under the offer;
(ii)	include the information set out in paragraph (d) hereof; and
(iii)	be accompanied by a copy of the Exclusionary Offer and all other material sent to holders of First Voting Units in respect of such offer, and as soon as reasonably possible after any additional material, including any notice of variation, is sent to the holders of First Voting Units in respect of the offer, the Corporation shall send a copy of such additional material to each holder of First Non-Voting Units.

(j)	Forthwith after sending any notice referred to in paragraph (h), the Corporation shall cause a press release to be issued to a Canadian national news-wire service, describing the contents of the notice.
3.5.5	Dividends.
The holders of First Preferred Non-Voting 2 Shares shall not be entitled to any dividends in respect thereof.

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3.5.6	Redemption.
Each First Preferred Non-Voting 2 Share will be automatically redeemed at the FPS2 Redemption Price upon the repayment or conversion of the First Unit of which it forms part. The First Preferred Non-Voting 2 Shares shall not be redeemable except as set forth in paragraph 3.5.6.

3.6.	Certain Adjustments.
If the Corporation shall subdivide the Class A Restricted Voting Shares or Class B Non-Voting Shares into a greater number of shares or shall issue in exchange for the Class A Restricted Voting Shares or Class B Non-Voting Shares a greater number of Class A Restricted Voting Shares or Class B Non-Voting Shares then in such case from and after the effective date of such subdivision or exchange of shares the conversion or redemption rate for the First Preferred Shares shall be increased in proportion to the increase in the number of outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such subdivision or exchange; and if the Corporation shall reduce the number of Class A Restricted Voting Shares or Class B Non-Voting Shares by combination or consolidation of shares or shall issue in exchange for the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares a smaller number of Class A Restricted Voting Shares or Class B Non-Voting Shares then in each case from and after the effective date of such combination, consolidation or exchange of shares the conversion or redemption rate for the First Preferred Shares shall be decreased in proportion to the decrease in the number of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such combination, consolidation or exchange of shares. In the event of any Fundamental Transaction and from and after the effective date of each such Fundamental Transaction, the conversion or redemption rate for the First Preferred Shares shall be adjusted in proportion to the adjustment in the number of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such Fundamental Transaction or, if applicable, the conversion or redemption rate of the First Preferred Shares shall be adjusted so as to provide for a conversion or redemption into the shares or securities entitled to be received by holders of Class A Restricted Voting Shares or Class B Non-Voting Shares pursuant to the Fundamental Transaction.
The Corporation shall not subdivide any series of First Preferred Shares into a greater number of shares or issue in exchange for any series of First Preferred Shares a greater number of First Preferred Shares without, concurrently therewith, effecting a subdivision or exchange of all First Preferred Shares and all Second Preferred Shares in the same proportion; and the Corporation shall not reduce the number of any series of First Preferred Shares by combination or consolidation of shares or issue in exchange for any series of First Preferred Shares a smaller number of First Preferred Shares without effecting concurrently therewith a combination, consolidation or exchange of shares of all First Preferred Shares and all Second Preferred Shares in the same proportion.
The Corporation shall not issue fractional shares in satisfaction of the conversion or redemption rights herein provided for. Where the exercise of conversion or redemption rights would otherwise result in fractional shares being issued, the number of shares to

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be issued by the Corporation shall be rounded down to the nearest whole number of shares.

4.	SECOND PREFERRED SHARES
	Subject to the Articles, the Second Preferred Shares have attached thereto the rights, privileges, conditions and restrictions set forth in this Section 4.
	The Second Preferred Shares shall be issued in the following series, each series consisting in a unlimited number of shares: Second Preferred Voting Shares, Second Preferred Voting 2 Shares, Second Preferred Non-Voting Shares and Second Preferred Non-Voting 2 Shares. Subject always to the prior rights of the holders of any class or series of First Preferred Shares, the Second Preferred Shares of all series shall rank on parity with each other.
	If the Second Preferred Shares are determined to be “taxable preferred shares” other than “short term preferred shares” (as such terms are respectively defined in the ITA), the Corporation will make an election under Subsection 191.2(1) of the ITA to increase its tax liability under Part VI.1 of the ITA to 40% or such other rate required so that no holder of such shares would be required to pay tax under Part IV.1 of the ITA on dividends on such shares.

4.1

Anti-Layering

Provided there remain outstanding Second Instruments of any type or class representing in the aggregate an Initial Issue Price in excess of $50,000,000, the approval: (i) by written resolution signed by holders of Second Instruments representing a majority of Second Instruments then outstanding (measured by reference to their redemption price or face amount, as the case may be) or (ii) by a majority of votes cast by the holders of Second Instruments represented in person or by proxy at a meeting called for such purpose will be required before the Corporation and its subsidiaries either (X) issue any shares ranking prior to or pari passu with the Second Preferred Shares (other than First Preferred Shares issued on the Effective Date and other than any series of First Preferred Shares or Second Preferred Shares forming part of First Units or Second Units, as the case may be, issued upon redemption of First Preferred Shares or Second Preferred Shares, respectively), or (Y) incur Funded Debt (other than as permitted under the Credit Facilities, First Units or Second Units), as a result of which the aggregate consolidated Funded Debt of the Corporation (other than Funded Debt of Unrestricted Subsidiaries) would be in excess of 4.0 times consolidated annual EBITDA (other than EBITDA of Unrestricted Subsidiaries), calculated on a pro forma basis based upon the consolidated EBITDA (other than EBITDA of Unrestricted Subsidiaries) for the four (4) consecutive quarters ended as at the fiscal quarter-end immediately prior to the date of the resolution of the Board approving such incurrence.

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4.2. Second Preferred Voting Shares

4.2.1	Voting.
Subject to the restrictions contained in Section 5: (a) each Second Preferred Voting Share entitles the holder to receive notice of, to attend and to exercise one vote (in person or by proxy) at any meeting of holders of Second Preferred Shares as a class or at any meeting of holders of Second Preferred Voting Shares as a series; and (b) each holder of Second Preferred Voting Shares shall be entitled to vote together with the holders of the Class A Restricted Voting Shares on a “as converted” basis, on any matter on which holders of the Class A Restricted Voting Shares are entitled to vote.
4.2.2	Dividends.
The holders of the Second Preferred Voting Shares shall be entitled to fixed, non-cumulative, preferred dividends at the rate of 9% per annum calculated on the SPS Redemption Price, payable, if declared and subject to Section 6, in cash semi-annually, in arrears, on the 1st day of June and December of each year, commencing on June 1, 2003. All dividends declared on the Second Preferred Voting Shares and on the Second Preferred Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share-for-share, without any preference or priority of one series over another. All such dividends shall be payable always in preference and priority to any payment of dividends on the Class A Restricted Voting Shares, Class B Non-Voting Shares, or any other shares ranking junior to the Second Preferred Shares, but after payment of dividends to the holders of First Preferred Voting Shares and First Preferred Non-Voting Shares.
4.2.3	Liquidation Event.
Upon any Liquidation Event, the holders of the Second Preferred Voting Shares shall be entitled to receive pari passu with the holders of the Second Preferred Non-Voting Shares, the Second Preferred Voting 2 Shares and Second Preferred Non-Voting 2 Shares and in priority to any payment or distribution in respect of shares of any other class (other than First Preferred Shares), an amount per share equal to the SPS Redemption Price plus any declared but unpaid dividends. In the event of an insufficiency of assets to pay in full the amounts to which the holders of the Second Preferred Voting Share are entitled upon a Liquidation Event, the holders of Second Preferred Voting Shares, Second Preferred Non-Voting Shares, Second Preferred Voting 2 Shares and Second Preferred Non-Voting 2 Shares shall, on a per share basis, participate rateably in any distribution to holders of Second Preferred Shares, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.
4.2.4	Conversion.
The Second Preferred Voting Shares shall have the following conversion rights:

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(a)	each Second Preferred Voting Share will be convertible into one Class A Restricted Voting Share at the option of the holder at any time and from time to time, subject always to the provisions of Section 7, upon the provision of any completed and executed Holder Transaction Notice. If applicable, upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Class A Restricted Voting Shares;
(b)	if at any time prior to the fifth anniversary of the Effective Date, the Corporation shall complete an offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the then current SPS Redemption Price and the proceeds thereof are used as described in Section 6 hereof, then the Second Preferred Voting Shares which remain outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time thereafter, into Class A Restricted Voting Shares, on a share-for-share basis, by way of a Corporation Transaction Notice to such effect; the Corporation Transaction Notice may be given at any time after the completion of the offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares provided that the Corporation has applied the proceeds thereof as described in Section 6 or has set aside the monies for application as therein provided for;
(c)	each Second Preferred Voting Share will automatically be converted into one Class A Restricted Voting Share, subject to the Conversion Adjustment, if on the 25th day (or if such is not a trading day, then on the next following trading day) after the date of the press release of the Corporation announcing its quarterly or annual financial results, as the case may be, at any time on or after the fifth anniversary of the Effective Date, the Second Preferred Voting Shares are In-the-Money, by way of a Corporation Transaction Notice to such effect; and
(d)	under the circumstances described in subparagraph 4.2.6(b)(ii).

A holder of Second Preferred Voting Shares shall not be entitled to any payment on account of the SPS Redemption Price upon exercise of any conversion right by such holder or by the Corporation pursuant to this paragraph 4.2.4.

All conversion rights provided for in this paragraph 4.2.4 are subject to a registration statement having been filed by the Corporation and having been declared effective by the SEC under the 1933 Act or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting form the exercise of such conversion right. If such exemption is not available as of November 1, 2003, the Corporation will file, on a date not earlier than November 1, 2003 and not later than December 1, 2003, such a registration

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statement with the SEC and will use reasonable commercial efforts to be the SEC declare such registration statement effective.
4.2.5	Exchange.
Each Second Preferred Voting Share may be exchanged for one Second Preferred Non-Voting Share, at the option of the holder, at any time upon the provision of an executed and completed Holder Transaction Notice. Upon receipt by the Transfer Agent of any such notice, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Second Preferred Non-Voting Shares.
4.2.6	Redemption.
The Second Preferred Voting Shares may be, or will be, as the case may be, redeemed in the following circumstances:
(a)	at any time, in whole or in part, at the option of the Corporation, at a price per share equal to the then current SPS Redemption Price, in cash, provided however that holders may exercise any conversion rights pursuant to Section 4.2.4(b) prior to any such redemption;
(b)	on the tenth anniversary of the Effective Date, (i) the Corporation will redeem all of the Second Preferred Voting Shares at a price per share equal to the then current SPS Redemption Price, payable in cash or (ii) at the Corporation’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares are then be listed and posted for trading on a Recognized Exchange, the Second Preferred Voting Shares may be redeemed in consideration of the issuance of such number of Class A Restricted Voting Shares as is equal to the quotient obtained when the SPS Redemption Price as at the tenth anniversary of the Effective Date is divided by the Average Common Share Price as of the day before the tenth anniversary of the Effective Date;
(c)	the Corporation will redeem the Second Preferred Voting Shares prior to the tenth anniversary of the Effective Date at the then current SPS Redemption Price to the extent that the Corporation has remaining Excess Cash Flow, proceeds from Asset Dispositions and proceeds from equity offerings available for such purpose as provided in Section 6 hereof;
(d)	the Second Preferred Voting Shares are redeemable at any time prior to the tenth anniversary of the Effective Date, in whole, at the option of the Corporation, upon satisfaction of the SPS Redemption Price as at redemption date by issuing Second Voting Units listed on a Recognized Exchange comprising Second Notes having, in the aggregate, principal amounts equal to the then current SPS Redemption Price, provided that, concurrently with such redemption, Second Preferred Non-Voting Shares

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are redeemed pursuant to Section 4.4.6(d) and First Preferred Shares are redeemed pursuant to Section 3.2.6(d) and Section 3.4.6(d).

Any redemption of Second Preferred Voting Shares pursuant to this Section 4.2.6 shall be effected by way of a Corporation Transaction Notice to such effect sent by the Corporation to each holder of Second Preferred Voting Shares to be redeemed, provided that in the case of a redemption under paragraph (a) above, the Corporation Transaction Notice shall be sent at least fifteen (15) Business Days before the date specified for redemption of Second Preferred Voting Shares, during which period the holders thereof may, if they so elect, exercise the conversion rights attached to such Second Preferred Voting Shares pursuant to Section 4.2.4(b) by way of a Holder Transaction Notice to such effect.

So long as any Second Preferred Voting Shares remain outstanding, on November 1st and May 1st of every year, starting on November 1st, 2003, the SPS Redemption Price shall be increased by an amount equal to the SPS Accretion Amount and reduced by the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.

In the event of any redemption or mandatory conversion of Second Preferred Voting Shares other than as at the end of a semi-annual period, the SPS Redemption Price of the Second Preferred Voting Shares to be redeemed or converted shall be increased by an amount equal to the SPS Accretion Amount, adjusted on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion and reduced by the amount of any cash dividend that has been declared and paid on such shares in respect of such period.

4.3.	Second Preferred Voting 2 Shares
4.3.1	Voting.
Subject to the restrictions contained in Section 5: (a) each Second Preferred Voting 2 Share entitles the holder to receive notice of, to attend and to exercise one vote (in person or by proxy) at any meeting of the holders of Second Preferred Shares as a class and on any meeting of holders of Second Preferred Voting 2 Shares as a series; and (b) each holder of Second Preferred Voting 2 Shares shall be entitled to vote together with the holders of the Class A Restricted Shares, on an “as converted” basis on any matter on which holders of Class A Restricted Voting Shares are entitled to vote.
4.3.2	Liquidation Event.
Upon any Liquidation Event, the holders of Second Preferred Voting 2 Shares shall be entitled to receive, pari passu with the holders of Second Preferred Non-Voting 2 Shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares and in priority to any other class of shares an amount per share equal to the SPS2 Redemption Price. In the event of an insufficiency of assets to

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	pay in full the amounts to which the holders of the Second Preferred Voting 2 Shares are entitled upon a Liquidation Event, holders of Second Preferred Voting 2 Shares, Second Preferred Non-Voting 2 Shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares shall participate rateably in any distribution to the holders of Second Preferred Shares, on a per share basis, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.
	4.3.3	Redemption.
	Each Second Preferred Voting 2 Shares will be automatically redeemed at the SPS2 Redemption Price upon the repayment, redemption or conversion of the Second Unit of which it forms part. The Second Preferred Voting 2 Share shall not be redeemable except as set forth in this paragraph 4.3.3.
	4.3.4	Dividends.
	The holders of Second Preferred Voting 2 Shares shall not be entitled to receive any dividends in respect thereof.
4.4.	Second Preferred Non-Voting Shares
	4.4.1	Voting.
	The holders of the Second Preferred Non-Voting Shares shall be entitled to receive notice of and to attend any meeting of shareholders at which the holders of Second Preferred Voting Shares are entitled to vote. Notwithstanding the foregoing, the Second Preferred Non-Voting Shares as such shall not entitle the holders thereof to any voting rights either to vote at any meeting of the shareholders of the Corporation or to sign a resolution in writing except as otherwise expressly provided in these Articles and in the Act, and subject to the restrictions contained in Section 5.
	4.4.2	Dividends.
	The holders of the Second Preferred Non-Voting Shares shall be entitled to fixed, non-cumulative, preferred dividends at the rate of 9% per annum calculated on the SPS Redemption Price payable, if declared and subject to Section 6, in cash semi-annually, in arrears, on the 1st day of June and December of each year commencing on June 1, 2003. All dividends declared on the Second Preferred Voting Shares and on the Second Preferred Non-Voting Shares shall be declared and paid at the same time, and in equal amounts, share-for-share, without any preference or priority of one series over another. All such dividends shall be payable always in preference and priority to any payment of dividends on the Class A Restricted Voting Shares, Class B Non-Voting Shares, or any other shares ranking junior to the Second Preferred Shares, but after payment of dividends to the holders of First Preferred Voting Shares and First Preferred Non-Voting Shares.

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4.4.3	Liquidation Event.
Upon any Liquidation Event, the holders of the Second Preferred Non-Voting Shares shall be entitled to receive, pari passu with the holders of Second Preferred Voting Shares, Second Preferred Voting 2 Shares and Second Preferred Non-Voting 2 Shares, and in priority to any payment or distribution in respect of shares of any other series or class (other than the First Preferred Shares), an amount per share equal to the SPS Redemption Price plus any declared but unpaid dividends. In the event of an insufficiency of assets to pay in full the amounts to which the holders of the Second Preferred Non-Voting Shares are entitled upon a Liquidation Event, holders of Second Preferred Voting Shares, Second Preferred Non-Voting Shares, Second Preferred Voting 2 Shares and Second Preferred Non-Voting 2 Shares shall participate rateably in any distribution to the holders of Second Preferred Shares, on a per share basis, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.
4.4.4	Conversion.
The Second Preferred Non-Voting Shares shall have the following conversion rights:
(a)	each Second Preferred Non-Voting Share will be convertible into one Class B Non-Voting Share at the option of the holder at any time and upon the provision of a duly executed and completed Holder Transaction Notice. If applicable, upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Class B Non-Voting Shares;
(b)	subject to the Conversion Adjustment, if the Corporation shall complete an offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the current SPS Redemption Price and the proceeds thereof are used as described in Section 6 hereof, then the Second Preferred Non-Voting Shares which remain outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time prior to the fifth anniversary of the Effective Date, into Class B Non-Voting Shares, on a share-for-share basis, by way of a Corporation Transaction Notice to such effect; the Corporation Transaction Notice may be given at any time after the completion of the offering of Class A Restricted Voting Shares and/or Class B Non-Voting Shares provided that the Corporation has applied the proceeds thereof as described in Section 6 or has set aside the monies for application as therein provided for;
(c)	each Second Preferred Non-Voting Share will automatically be converted into one Class B Non-Voting Share if on the 25th day (or if such day is not

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	a trading day, then on the next following trading day) after the date of the press release of the Corporation announcing its quarterly or annual financial results, as the case may be, at any time on or after the fifth anniversary of the Effective Date, the Second Preferred Non-Voting Shares are In-the-Money by way of a Corporation Transaction Notice to such effect; and
(d)	under the circumstances described in subparagraph 4.4.6(b)(ii).
A holder of Second Preferred Non-Voting Shares shall not be entitled to any payment on account of the FPS Redemption Price upon exercise of any conversion right by such holder or by the Corporation pursuant to this paragraph 4.4.4.
All conversion rights provided for in this paragraph 4.4.5 are subject to a registration statement having been filed by the Corporation and having been declared effective by the SEC under the 1933 Act or to an exemption being available under the 1933 Act in connection with the issuance of shares resulting form the exercise of such conversion right. If such exemption is not available as of November 1, 2003, the Corporation will file, on a date not earlier than November 1, 2003 and not later than December 1, 2003, such a registration statement with the SEC and will use reasonable commercial efforts to be the SEC declare such registration statement effective.
4.4.5	Exchange
Each Second Preferred Non-Voting Share may be or will be, as the case may be, exchangeable for one Second Preferred Voting Share, subject to the provisions of Section 7, if:
(a)	at the option of the holder exercisable at any time and from time to time by giving a Holder Transaction Notice accompanied by a Residency Declaration whereby such holder attests that it is Canadian. Upon receipt by the Transfer Agent of such notice and, if applicable, Residency Declaration, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Second Preferred Voting Shares;
(b)	automatically, if and to the extent that the Canadian Ownership and Control Provisions are amended or repealed such that persons in the Constrained Class are permitted to hold Second Preferred Voting Shares without resulting in a contravention of the Canadian Ownership and Control Provisions provided no exchange hereunder shall occur until at least 1% of the then outstanding Second Preferred Non-Voting Shares can be exchanged; or
(c)	any of the circumstances described in paragraph 4.4.7 hereof should occur, but only in the manner set out therein.

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Notwithstanding Section 4.4.5(a), Non-Canadian Secured Creditors may exchange, by way of a Holder Transaction Notice to such effect, in the aggregate, each on a pro rata basis, either (i) up to 30,000 First Preferred Non-Voting Shares to 30,000 First Preferred Voting Shares, (ii) 30,000 Second Preferred Non-Voting Shares to 30,000 Second Preferred Voting Shares or (iii) a combination of the above not exceeding 30,000 shares, provided that such conversion would not contravene the Canadian Ownership and Control Provisions.
4.4.6	Redemption
The Second Preferred Non-Voting Shares may be, or will be, as the case may be, redeemed in the following circumstances:
(a)	at any time, in whole or in part, at the option of the Corporation, at a price per share equal to the then current SPS Redemption Price, in cash, provided however that holders may exercise any conversion rights prior to any such redemption;
(b)	on the tenth anniversary of the Effective Date (i) the Corporation will redeem all of the Second Preferred Non-Voting Shares at a price per share equal to the then current SPS Redemption Price payable in cash or (ii) at the Corporation’s option, if the Class A Restricted Voting Shares and the Class B Non-Voting Shares are then listed and posted for trading on a Recognized Exchange, the Second Preferred Non-Voting Shares may be redeemed in consideration of the issuance of such number of Class B Non-Voting Shares as is equal to the quotient obtained when the SPS Redemption Price as at the tenth anniversary of the Effective Date is divided by the Average Common Share Price as of the day before the tenth anniversary of the Effective Date;
(c)	the Corporation will redeem the Second Preferred Non-Voting Shares prior to the tenth anniversary of the Effective Date at the then current SPS Redemption Price to the extent that the Corporation has remaining Excess Cash Flow, proceeds from Asset Dispositions and proceeds from equity offerings available for such purpose as provided in Section 6 hereof;
(d)	the Second Preferred Non-Voting Shares are redeemable at any time prior to the tenth anniversary of the Effective Date, in whole, at the option of the Corporation, upon satisfaction of the SPS Redemption Price as at the redemption date by issuing Second Non-Voting Units listed on a Recognized Exchange comprising Second Notes having, in the aggregate, principal amounts equal to the then current SPS Redemption Price, provided that, concurrently with such redemption, Second Preferred Voting Shares are redeemed pursuant to Section 4.2.6(d) and First Preferred Shares are redeemed pursuant to Section 3.2.6(d) and Section 3.4.6(d).

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Any redemption of Second Preferred Non-Voting Shares pursuant to this Section 4.4.6 shall be effected by way of a Corporation Transaction Notice to such effect sent by the Corporation to each holder of Second Preferred Non-Voting Shares to be redeemed, provided that in the case of a redemption under paragraph (a) above, the Corporation Transaction Notice shall be sent at least fifteen (15) Business Days before the date specified for redemption of Second Preferred Non-Voting Shares, during which period the holders thereof may, if they so elect, exercise the conversion rights attached to such Second Preferred Non-Voting Shares pursuant to Section 4.4.4(a) by way of a Holder Transaction Notice to such effect.
So long as Second Preferred Non-voting Shares remain outstanding, on November 1st and May 1st of every year, starting on November 1st, 2003, the SPS Redemption Price shall be increased by an amount equal to the SPS Accretion Amount and reduced by the amount of any cash dividend that has been declared and paid in respect of such semi-annual period.
In the event of any redemption or mandatory conversion of Second Preferred Non-Voting Shares other than as at the end of a semi-annual period, the SPS Redemption Price of the Second Preferred Non-Voting Shares to be redeemed or converted shall be increased by an amount equal to the FPS Accretion Amount, adjusted on a pro rata basis with reference to the number of days from the beginning of the then current semi-annual period to the date of such redemption or conversion and reduced by the amount of any cash dividend that has been declared and paid on such shares in respect of such period.
4.4.7	Coattails
(a)	In this Section 4.4.7, the following terms shall have the following meanings:
“Conversion Period” means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date ;
“Converted Shares” means Second Preferred Voting Shares resulting from the conversion of Second Preferred Non-Voting Shares into Second Preferred Voting Shares pursuant to paragraph (b) hereof;
“Exclusionary Offer” means an offer to purchase Second Preferred Voting Shares that:

(i) must, by reason of applicable securities legislation or the requirements of the TSX or the requirements of the Act, be made to all or substantially all holders of Second Preferred Voting Shares who are in a province of Canada to which the requirements apply; and

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(ii) is not made concurrently with an offer to purchase Second Preferred Non-Voting Shares that is identical to the offer to purchase Second Preferred Voting Shares in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the Offeror , and in all other material respects (except with respect to the conditions that may be attached to the offer for Second Preferred Voting Shares), and that has no condition attached thereto other than the right not to take up and pay for Second Preferred Non-Voting Shares tendered if no Second Preferred Voting Shares are purchased pursuant to the offer for Second Preferred Voting Shares;

for the purposes of this definition, if an offer to purchase Second Preferred Voting Shares would be an Exclusionary Offer but for the provisions of clause (ii), the varying of any term of such offer shall be deemed to constitute the making of a new offer unless an identical variation concurrently is made to the corresponding offer to purchase Second Preferred Non-Voting Shares;
“Expiry Date” means the last date upon which holders of Second Preferred Voting Shares may accept an Exclusionary Offer;
“Offer Date” means the date on which an Exclusionary Offer is made;
“Offeror” means a person that makes an offer to purchase Second Preferred Voting Shares (the “bidder”), and includes any associate or affiliate of the bidder or any person that is acting jointly or in concert with the bidder (whether or not disclosed in the offering document relating to such offer); and
(b)	Subject to paragraph (f) hereof, if an Exclusionary Offer is made, each outstanding Second Preferred Non-Voting Share shall be convertible into one fully paid Second Preferred Voting Share at the option of the holder thereof exercisable by giving a Holder Transaction Notice at any time during the Conversion Period accompanied by: (a) the share certificate or certificates representing the Second Preferred Non-Voting Shares which the holder desires to convert; and (b) the letters of transmittal, directions, transfers, powers of attorney and other documentation duly executed by his or her attorney duly authorized in writing as is specified by the Transfer Agent for the Second Preferred Voting Shares, acting reasonably, as being required to give full effect to the reconversion into Second Preferred Non-Voting Shares of the Converted Shares as contemplated by paragraphs (d) and (e). Upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Second Preferred Voting Shares as prescribed above and in accordance with paragraph (e). If less than all of the Second Preferred Non-Voting Shares represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate

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	the number of Second Preferred Non-Voting Shares represented by the original share certificate which are not to be converted.
(c)	Notwithstanding the conversion rights provided for under paragraph (b) above, no holder of Second Preferred Non-Voting Shares shall be entitled to exercise such conversion right if the Offeror under any Exclusionary Offer is acting in concert with such holder, is an associate or an affiliate of such holder or if under any applicable securities laws the shares of such holder and the Offeror are deemed to be held by the same person.
(d)	An election by a holder of Second Preferred Non-Voting Shares to exercise the conversion right provided for in paragraph (b) shall be deemed to also constitute irrevocable elections by such holder (i) to deposit the Converted Shares in acceptance of the Exclusionary Offer (subject to such holder’s rights to subsequently withdraw such Converted Shares from the Exclusionary Offer in accordance with the terms thereof and applicable law); and (ii) to exercise the right to convert into Second Preferred Non-Voting Shares all Converted Shares in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Shares into Second Preferred Non-Voting Shares pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall become effective at the time such right of withdrawal is exercised. If the right of withdrawal is not exercised, any conversion into Second Preferred Non-Voting Shares pursuant to such deemed election shall become effective as follows:

(i)	in respect of an Exclusionary Offer which is completed, any shares which are not otherwise ultimately taken up and paid for under the Exclusionary Offer, immediately following the time by which the Offeror is required under applicable securities legislation to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and
(ii)	in respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at which the Exclusionary Offer is abandoned or withdrawn.

(e) No share certificates representing Converted Shares shall be delivered to or to the order of the holders of such shares before such shares are deposited pursuant to the Exclusionary Offer; the Transfer Agent, on behalf of the holders of the Converted Shares, shall deposit pursuant to the Exclusionary Offer a certificate or certificates representing the Converted Shares. Upon completion of the Exclusionary Offer, the Transfer Agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the Exclusionary Offer in respect of the Converted Shares. If Converted

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Shares are converted into Second Preferred Non-Voting Shares in accordance with the deemed election in paragraph (d), the Transfer Agent shall deliver to the holders entitled thereto a share certificate representing the Second Preferred Non-Voting Shares resulting from the conversion. The Corporation shall make all arrangements with the Transfer Agent necessary or desirable to give effect to this paragraph (e).

(f)

Subject to paragraph (g) hereof, the conversion right provided for in paragraph (b) hereof shall not come into effect if:

(i) prior to the time at which the Exclusionary Offer is made there is delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate, as at the time the Exclusionary Offer is made, more than 50% of the then outstanding Second Preferred Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder, that such shareholder shall not:

(A)	tender any shares in acceptance of the Exclusionary Offer without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date;
(B)	make any Exclusionary Offer;
(C)	act jointly or in concert with any person or company that makes any Exclusionary Offer; or
(D)	transfer any Second Preferred Voting Share, directly or indirectly, during the time at which any Exclusionary Offer is outstanding without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Second Preferred Voting Shares transferred or to be transferred to each transferee;

or
(ii)	as of the end of the seventh day after the Offer Date there has been delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Second

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Preferred Voting Shares, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder:
(A)	the number of Second Preferred Voting Shares owned by the shareholder;
(B)	that such shareholder is not making the Exclusionary Offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer;
(C)	that such shareholder shall not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and
(D)	that such shareholder shall not transfer any Second Preferred Voting Shares, directly or indirectly, prior to the Expiry Date without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Second Preferred Voting Shares transferred or to be transferred to each transferee;

	or
	(iii)	as of the end of the seventh day after the Offer Date a combination of certificates that comply with either clause (i) or (ii) from shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Second Preferred Voting Shares, exclusive of shares owned immediately prior, to the Exclusionary Offer Date by the Offeror, has been delivered to the Transfer Agent and to the Secretary of the Corporation.
(g)	If a notice referred to in sub-clause 4.4.7(f)(i)(A) or (D) or 4.4.7(f)(ii)(C) or (D) hereof is given and the conversion right provided for in paragraph (b) hereof has not come into effect, the Transfer Agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of Second Preferred Voting Shares in respect of which there are subsisting certificates that comply with either clause (f)(i) or (f)(ii) hereof. For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as subsisting insofar as the Second Preferred Voting Shares to which the notice relates are concerned; the transfer that is the

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	subject of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to have already taken place at the time of the determination; and the transferee in the case of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to be a person or company from whom the Transfer Agent does not have a subsisting certificate unless the Transfer Agent is advised of the identity of the transferee, either by such notice or by the transferee in writing, and such transferee is a person or company from who the Transfer Agent has a subsisting certificate. If the number of Second Preferred Voting Shares so determined does not exceed 80% of the number of then outstanding Second Preferred Voting Shares, exclusive of shares owned immediately prior to the offer by the Offeror, paragraph (f) hereof shall cease to apply and the conversion right provided for in paragraph (b) hereof shall be in effect for the remainder of the Conversion Period.
(h)	As soon as reasonably possible after the seventh day after the Offer Date, the Corporation shall send to each holder of Second Preferred Non-Voting Shares a notice advising the holders as to whether they are entitled to convert their Second Preferred Non-Voting Shares into Second Preferred Voting Shares and the reasons therefor. If such notice discloses that they are not so entitled but it is subsequently determined that they are so entitled by virtue of paragraph (g) above or otherwise, the Corporation shall forthwith send another notice to them advising them of that fact and the reasons therefor. Failure to send such notice will not adversely affect the rights of the holders of Second Preferred Non-Voting Shares hereunder.
(i)	If a notice referred to in paragraph (h) above discloses that the conversion right has come into effect, the notice shall:

(A)	include a description of the procedure to be followed to effect the conversion and to have the Converted Shares tendered under the offer;
(B)	include the information set out in paragraph (d) hereof; and
(C)	be accompanied by a copy of the Exclusionary Offer and all other material sent to holders of Second Preferred Voting Shares in respect of such offer, and as soon as reasonably possible after any additional material, including any notice of variation, is sent to the holders of Second Preferred Voting Shares in respect of the offer, the Corporation shall send a copy of such additional material to each holder of Second Preferred Non-Voting Shares.

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	(j)	Forthwith after sending any notice referred to in paragraph (h) above, the Corporation shall cause a press release to be issued to a Canadian national news-wire service, describing the contents of the notice.
	(k)	Notwithstanding the provisions of the Act, in the event that any Converted Shares are reconverted into Second Preferred Non-Voting Shares pursuant to the provisions of paragraph (d) above, the stated capital account in respect of such Second Preferred Non-Voting Shares shall be increased by the amount by which the stated capital account maintained for such shares was reduced by the conversion of such shares into Converted Shares.
4.5.	Second Preferred Non-Voting 2 Shares
	4.5.1	Voting.
	The holders of the Second Preferred Non-Voting 2 Shares shall be entitled to receive notice of and to attend any meeting of shareholders at which the holders of Second Preferred Voting Shares are entitled to vote. Notwithstanding the foregoing, the Second Preferred Non-Voting 2 Shares shall not entitle the holders thereof to any voting rights either to vote at any meeting of the shareholders of the Corporation or to sign a resolution in writing, except as otherwise expressly provided in these Articles and in the Act and subject to the restrictions contained in Section 5.
	4.5.2	Liquidation Event.
	Upon any Liquidation Event, the holders of the Second Preferred Non-Voting 2 Shares shall be entitled to receive, pari passu with the holders of Second Preferred Voting 2 Shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares, in priority to any payment or distribution in respect of any other class or series of shares (other than First Preferred Shares), an amount per share equal to the SPS2 Redemption Price. In the event of an insufficiency of assets to pay in full the amounts to which the holders of the Second Non-Voting 2 Shares are entitled upon a Liquidation Event, holders of Second Preferred Voting 2 Shares, Second Preferred Non-Voting 2 Shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares shall participate rateably in such distribution to the holders of Second Preferred Shares, on a per share basis, in accordance with the amounts to which they are respectively entitled upon such Liquidation Event.
	4.5.3	Exchange.
	(a)	Each Second Preferred Non-Voting 2 Share may be or will be, as the case may be, exchanged for one Second Preferred Voting 2 Share, subject always to the provisions of Section 7, if:

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(i)	at the option of the holder exercisable at any time and from time to time by giving a Holder Transaction Notice accompanied by a Residency Declaration whereby such holder attests that it is Canadian. Upon receipt by the Transfer Agent of such notice and, if applicable, Residency Declaration, the Corporation shall issue or cause to be issued a certificate or certificates representing Second Voting Units;
(ii)	automatically, if and to the extent that the Canadian Ownership and Control Provisions are amended or repealed such that persons in the Constrained Class are permitted to hold Second Preferred Voting 2 Shares without resulting in a contravention of the Canadian Ownership and Control Provisions provided no exchange hereunder shall occur until at least 1% of the then outstanding Second Preferred Non-Voting 2 Shares can be exchanged; or
(iii)	any of the circumstances described in paragraph 4.5.4 hereof should occur, but only in the manner set out therein.

4.5.4	Coattails.
(a)	In this paragraph 4.5.4, the following terms shall have the following meanings:
	“Conversion Period” means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date ;
	“Converted Units” means Second Voting Units resulting from the conversion of Second Non-Voting Units into Second Voting Units pursuant to paragraph (b) hereof;
	“Exclusionary Offer” means an offer to purchase Second Voting Units that:

(i)

must, by reason of applicable securities legislation or the requirements of the TSX or the requirements of the Act, be made to all or substantially all holders of Second Voting Units who are in a province of Canada to which the requirements apply; and

(ii)

is not made concurrently with an offer to purchase Second Non-Voting Units that is identical to the offer to purchase Second Voting Units in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the Offeror , and in all other material respects (except with respect to the conditions that may be attached to the offer for Second Voting Units), and that has no condition attached thereto other than the right not to take up and

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pay for Second Non-Voting Units tendered if no Second Voting Units are purchased pursuant to the offer for Second Voting Units;

	for the purposes of this definition, if an offer to purchase Second Voting Units would be an Exclusionary Offer but for the provisions of clause (ii), the varying of any term of such offer shall be deemed to constitute the making of a new offer unless an identical variation concurrently is made to the corresponding offer to purchase Second Non-Voting Units;
	“Expiry Date” means the last date upon which holders of Second Voting Units may accept an Exclusionary Offer;
	“Offer Date” means the date on which an Exclusionary Offer is made;
	“Offeror” means a person that makes an offer to purchase Second Voting Units (the “bidder”), and includes any associate or affiliate of the bidder or any person that is acting jointly or in concert with the bidder (whether or not disclosed in the offering document relating to such offer); and
(b)	Subject to paragraph (f) hereof, if an Exclusionary Offer is made, each outstanding Second Preferred Non-Voting 2 Share shall be convertible into one fully paid Second Preferred Voting 2 Share at the option of the holder thereof exercisable by giving a Holder Transaction Notice at any time during the Conversion Period accompanied by: (a) the share certificate or certificates representing the Second Non-Voting Units which the holder desires to convert; and (b) the letters of transmittal, directions, transfers, powers of attorney and other documentation duly executed by his or her attorney duly authorized in writing as is specified by the Transfer Agent for the Second Voting Units, acting reasonably, as being required to give full effect to the reconversion into Second Non-Voting Units of the Converted Units as contemplated by paragraphs (d) and (e). Upon receipt by the Transfer Agent of such notice and share certificate or certificates, the Corporation shall issue or cause to be issued a share certificate representing fully-paid Second Voting Units as prescribed above and in accordance with paragraph (e). If less than all of the Second Preferred Non-Voting Shares represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate the number of Second Non-Voting Units represented by the original share certificate which are not to be converted.
(c)	Notwithstanding the conversion rights provided for under paragraph (b) above, no holder of Second Preferred Non-Voting Shares shall be entitled to exercise such conversion right if the Offeror under any Exclusionary Offer is acting in concert with such holder, is an associate or an affiliate of such holder or if under any applicable securities laws the shares of such holder and the Offeror are deemed to be held by the same person.

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(d) An election by a holder of Second Non-Voting Units to exercise the conversion right provided for in paragraph (b) shall be deemed to also constitute irrevocable elections by such holder (i) to deposit the Converted Units pursuant to the Exclusionary Offer (subject to such holder’s rights to subsequently withdraw such Converted Units from the Exclusionary Offer in accordance with the terms thereof and applicable law); and (ii) to exercise the right to convert into Second Non-Voting Units all Converted Units in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Units into Second Non-Voting Units pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall become effective at the time such right of withdrawal is exercised. If the right of withdrawal is not exercised, any conversion into Second Non-Voting Units pursuant to such deemed election shall become effective as follows:

(i)	in respect of an Exclusionary Offer which is completed, any shares which are not otherwise ultimately taken up and paid for under the Exclusionary Offer, immediately following the time by which the Offeror is required under applicable securities legislation to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and
(ii)	in respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at which the Exclusionary Offer is abandoned or withdrawn.

(e)

No share certificates representing Converted Units shall be delivered to or to the order of the holders of such shares before such shares are deposited in acceptance of the Exclusionary Offer; the Transfer Agent, on behalf of the holders of the Converted Units, shall deposit pursuant to the Exclusionary Offer a certificate or certificates representing the Converted Units. Upon completion of the Exclusionary Offer, the Transfer Agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the Exclusionary Offer in respect of the Converted Units. If Converted Units are converted into Second Non-Voting Units in accordance with the deemed election in paragraph (d), the Transfer Agent shall deliver to the holders entitled thereto a share certificate representing the Second Non-Voting Units resulting from the conversion. The Corporation shall make all arrangements with the Transfer Agent necessary or desirable to give effect to this paragraph (e).

(f)

Subject to paragraph (g) hereof, the conversion right provided for in paragraph (b) hereof shall not come into effect if:

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(i) prior to the time at which the Exclusionary Offer is made there is delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate, as at the time the Exclusionary Offer is made, more than 50% of the then outstanding Second Voting Units, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder, that such shareholder shall not:

(A)	tender any shares in acceptance of the Exclusionary Offer without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date;
(B)	make any Exclusionary Offer;
(C)	act jointly or in concert with any person or company that makes any Exclusionary Offer; or
(D)	transfer any Second Preferred Voting 2 Share, directly or indirectly, during the time at which any Exclusionary Offer is outstanding without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Second Voting Units transferred or to be transferred to each transferee;

or

(ii) as of the end of the seventh day after the Offer Date there has been delivered to the Transfer Agent and to the Secretary of the Corporation a certificate or certificates signed by or on behalf of one or more shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Second Voting Units, exclusive of shares owned immediately prior to the Exclusionary Offer by the Offeror, which certificate or certificates shall confirm, in the case of each such shareholder:

(A)	the number of Second Voting Units owned by the shareholder;
(B)	that such shareholder is not making the Exclusionary Offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer;

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(C)

that such shareholder shall not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the Transfer Agent and the Secretary of the Corporation written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and

(D)

that such shareholder shall not transfer any Second Voting Units, directly or indirectly, prior to the Expiry Date without giving the Transfer Agent and the Secretary of the Corporation written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Second Voting Units transferred or to be transferred to each transferee;

or

(iii)

as of the end of the seventh day after the Offer Date a combination of certificates that comply with either clause (i) or (ii) from shareholders of the Corporation owning in the aggregate more than 50% of the then outstanding Second Voting Units, exclusive of shares owned immediately prior, to the Exclusionary Offer Date by the Offeror, has been delivered to the Transfer Agent and to the Secretary of the Corporation.

(g) If a notice referred to in sub-clause 4.5.4(f)(i)(A) or (D) or 4.5.4(f)(ii)(C) or (D) hereof is given and the conversion right provided for in paragraph (d) hereof has not come into effect, the Transfer Agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of Second Voting Units in respect of which there are subsisting certificates that comply with either clause (f)(i) or (f)(ii) hereof. For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as subsisting insofar as the Second Voting Units to which the notice relates are concerned; the transfer that is the subject of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to have already taken place at the time of the determination; and the transferee in the case of any notice referred to in sub-clause (f)(i)(D) or (f)(ii)(D) hereof shall be deemed to be a person or company from whom the Transfer Agent does not have a subsisting certificate unless the Transfer Agent is advised of the identity of the transferee, either by such notice or by the transferee in writing, and such transferee is a person or company from who the Transfer Agent has a subsisting certificate. If the number of Second Voting Units so determined does not exceed 50% of the number of then outstanding Second Voting Units, exclusive of shares owned immediately prior to the offer by the Offeror, paragraph (f) hereof

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	shall cease to apply and the conversion right provided for in paragraph (b) hereof shall be in effect for the remainder of the Conversion Period.
(h)	As soon as reasonably possible after the seventh day after the Offer Date, the Corporation shall send to each holder of Second Non-Voting Units a notice advising the holders as to whether they are entitled to convert their Second Non-Voting Units into Second Voting Units and the reasons therefor. If such notice discloses that they are not so entitled but it is subsequently determined that they are so entitled by virtue of paragraph (g) or otherwise, the Corporation shall forthwith send another notice to them advising them of that fact and the reasons therefor. Failure to send such notice will not adversely affect the rights of the holders of Second Non-Voting Units hereunder.
(i)	If a notice referred to in subparagraph (h) discloses that the conversion right has come into effect, the notice shall:

(i)	include a description of the procedure to be followed to effect the conversion and to have the Converted Units tendered under the offer;
(ii)	include the information set out in paragraph (d) hereof; and
(iii)	be accompanied by a copy of the Exclusionary Offer and all other material sent to holders of Second Voting Units in respect of such offer, and as soon as reasonably possible after any additional material, including any notice of variation, is sent to the holders of Second Voting Units in respect of the offer, the Corporation shall send a copy of such additional material to each holder of Second Non-Voting Units.

(j)	Forthwith after sending any notice referred to in paragraph (h), the Corporation shall cause a press release to be issued to a Canadian national news-wire service, describing the contents of the notice.
4.5.5	Redemption.
Each Second Preferred Non-Voting 2 Shares will be automatically redeemed at the SPS2 Redemption Price upon the repayment or conversion of the Second Note to which it is attached to form a Second Unit. The Second Preferred Non-Voting 2 Shares shall not be redeemable except as set forth in this Section 4.5.5.
4.5.6	Dividends.
The holders of Second Preferred Non-Voting 2 Shares shall not be established to receive any dividends thereon.

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4.6.	Certain Adjustments.
If the Corporation shall subdivide the Class A Restricted Voting Shares or Class B Non-Voting Shares into a greater number of shares or shall issue in exchange for the Class A Restricted Voting Shares or Class B Non-Voting Shares a greater number of Class A Restricted Voting Shares or Class B Non-Voting Shares then in such case from and after the effective date of such subdivision or exchange of shares the conversion or redemption rate for the Second Preferred Shares shall be increased in proportion to the increase in the number of outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such subdivision or exchange; and if the Corporation shall reduce the number of Class A Restricted Voting Shares or Class B Non-Voting Shares by combination or consolidation of shares or shall issue in exchange for the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares a smaller number of Class A Restricted Voting Shares or Class B Non-Voting Shares then in each case from and after the effective date of such combination, consolidation or exchange of shares the conversion or redemption rate for the Second Preferred Shares shall be decreased in proportion to the decrease in the number of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such combination, consolidation or exchange of shares. In the event of any Fundamental Transaction and from and after the effective date of each such Fundamental Transaction, the conversion or redemption rate for the Second Preferred Shares shall be adjusted in proportion to the adjustment in the number of the outstanding Class A Restricted Voting Shares or Class B Non-Voting Shares resulting from such Fundamental Transaction or, if applicable, the conversion or redemption rate of the Second Preferred Shares shall be adjusted so as to provide for a conversion or redemption into the shares or securities entitled to be received by holders of Class A Restricted Voting Shares or Class B Non-Voting Shares pursuant to the Fundamental Transaction.
The Corporation shall not subdivide any series of Second Preferred Shares into a greater number of shares or issue in exchange for any series of Second Preferred Shares a greater number of Second Preferred Shares without, concurrently therewith, effecting a subdivision or exchange of all Second Preferred Shares and all First Preferred Shares in the same proportion; and the Corporation shall not reduce the number of any series of Second Preferred Shares by combination or consolidation of shares or issue in exchange for any series of Second Preferred Shares a smaller number of Second Preferred Shares without effecting concurrently therewith a combination, consolidation or exchange of shares of all Second Preferred Shares and all First Preferred Shares in the same proportion.
The Corporation shall not issue fractional shares in satisfaction of the conversion or redemption rights herein provided for. Where the exercise of conversion or redemption rights would otherwise result in fractional shares being issued, the number of shares to be issued by the Corporation shall be rounded down to the nearest whole number of shares.

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5.	CORPORATE STABILITY PROVISIONS
	Until the second anniversary of the Effective Date (except if varied or waived by a special resolution of holders of all Voting Shares and Non-Voting Shares (and all First Units and Second Units, if any are outstanding), in each case voting on an “as converted basis” (if applicable), and as a single class, in person or by proxy at a meeting called for such purpose and, for greater certainty, at which the voting limitations provided for herein shall be applicable), no person or company, acting alone or acting jointly or in concert with any other person or company with respect to the acquisition, disposition or voting of securities of the Corporation, shall be permitted to exercise on any resolution submitted to a vote of holders of securities, voting rights representing in excess of 20% of the aggregate voting rights exercisable with respect to the particular resolution, provided that the 20% limitation contained in this Section 5 shall not apply to any holder of securities of the Corporation acting alone who, (i) if the Effective Date had occurred on December 9, 2002, would have held, on such date, securities of the Corporation which would have entitled it to exercise in excess of 20% of such aggregate voting rights and (ii) would not, at any time between December 9, 2002 and the Effective Date, have been entitled to exercise less than 20% of such aggregate voting rights assuming that the Effective Date occurred at any time during such period (such holder being referred to as a “Grandfathered Holder”).
	A Grandfathered Holder shall be entitled to exercise on any resolution submitted to a vote of holders of securities on which the Grandfathered Holder is entitled to vote, such voting rights as would have been attached to securities of the Corporation that would have been held by such Grandfathered Holder if the Effective Date had occurred on December 9, 2002, provided that the Grandfathered Holder holds, on the record date for the particular meeting, securities that entitle it to exercise more than 20% of the aggregate voting rights at such meeting but for this Section 5 and subject in all cases to the Canadian Ownership and Control Provisions. In the event of any dispute arising as to whether a particular holder of securities is a Grandfathered Holder entitled to the benefit of this paragraph, the decision of the chairman of the meeting acting in good faith shall be final and binding upon such holder. The burden of proof to establish that any particular holder of securities is a Grandfathered Holder and continues to be entitled to the benefit of this paragraph shall rest upon such holder.
	The 20% limitation contained in this Section 5 shall not apply to any person or company that makes an offer to acquire all the First Instruments, Second Instruments, Class A Restricted Voting Shares and Class B Non-Voting Shares and acquires such number of First Instruments, Second Instruments, Class A Restricted Voting Shares and Class B Non-Voting Shares so as to hold thereafter at least 66-2/3% of the equity securities of the Corporation on a fully-diluted basis.
6.	MANDATORY PAYMENTS.
	Subject to applicable law and to the maintenance of a minimum consolidated cash balance (which shall include all cash, cash equivalent and short-term investments) of at least $45,000,000, prior to the Corporation’s 25% share of any Excess Cash Flow, the

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Corporation shall cause the Mandatory Payments to be made from the following amounts:

(A)	if, at the end of any fiscal year, the Corporation has a consolidated cash balance (which, for greater certainty, includes all cash, cash equivalents and short-term investments) of at least $45,000,000 (prior to the Corporation’s 25% share of any Excess Cash Flow) and if the Reference Entities have generated Excess Cash Flow during such fiscal year, then an amount equal to 75% of the Excess Cash Flow generated in such fiscal year;
(B)	an amount equal to any Net Proceeds in excess of $2,000,000 in the aggregate in any fiscal year received from an Asset Disposition and any other Asset Disposition which generated Net Proceeds during such fiscal year; and
(C)	an amount equal to 75% of any Net Proceeds from the issuance of Equity Securities other than an issuance of Equity Securities by one Reference Entity to another Reference Entity, including any proceeds from the exercise of any of the Warrants;

provided that:

(D)	any payment on account of paragraph (A) above from Excess Cash Flow generated during a fiscal year shall be made on or before March 31st of the immediately following fiscal year;
(E)	any payment on account of paragraph (B) above from any Net Proceeds of any Asset Disposition shall be made within five (5) Business Days following the receipt of the Net Proceeds of such Asset Disposition;
(F)	any payment on account of paragraph (C) above from any Net Proceeds of any sale or issuance of Equity Securities by a Reference Entity shall be made within five (5) Business Days following the receipt of the proceeds of such sale or issuance of Equity Securities.

     For the purposes hereof:

(a) “Mandatory Payments” shall mean the following payments, applied sequentially and in the following priority:

(i) first, subject to paragraph (b) below, to the permanent rateable prepayment of the principal amounts outstanding under the

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Tranche B Debt , up to a maximum aggregate amount equal to 25% of the original principal amounts under the Tranche B Debt;

(ii)	second, to the payment of unpaid accrued interest on the Tranche C Debt;
(iii)	third, to the declaration and payment of dividends on the First Preferred Shares;
(iv)	fourth, subject to paragraph (c) below, until the fifth anniversary of the Effective Date, on a pro rata basis, to the permanent rateable prepayment of the Tranche C Debt, up to a maximum aggregate amount equal to 25% of the original principal amount of the Tranche C Debt, and the redemption of up to 75% of the First Preferred Shares issued on the Effective Date;
(v)	fifth, to the declaration and payment of dividends on the Second Preferred Shares;
(vi)	sixth, until the fifth anniversary of the Effective Date, to the redemption of up to 75% of the number of Second Preferred Shares issued on the Effective Date;
(vii)	seventh, after the fifth anniversary of the Effective Date, on a pro rata basis, to repayment of the remaining principal amount of Tranche C Debt and redemption of the remaining First Preferred Shares issued on the Effective Date; and
(viii)	eighth, after the fifth anniversary of the Effective Date, to redemption of the remaining Second Preferred Shares issued on the Effective Date.

(b)

If a Mandatory Payment required by paragraph (i) above would result in the repayment of an amount exceeding 25% of the aggregate principal original amount of the Tranche B Debt (the“Tranche B Tax Threshold Amount”) to be repaid on or before the fifth anniversary of the Effective Date, taking into account all amortization payments on the Tranche B Debt and all Mandatory Payments made pursuant to paragraphs (A) and (C) above (but, for greater certainty, not taking into account any Mandatory Payments made pursuant to paragraph (B) above, or any voluntary prepayments) then, notwithstanding paragraph (i) above, that Mandatory Payment shall not be paid, to the extent that such amount would cause the Tranche B Tax Threshold Amount to be exceeded, and shall instead be applied pursuant to paragraphs (ii) through (viii) above, subject to the limitations provided therein.

(c)

If a Mandatory Payment required by paragraph (iv) above would result in the repayment of an amount exceeding 25% of the aggregate original

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principal amount of the Tranche C Loans (the “Tranche C Tax Threshold Amount”) to be repaid on or before the fifth anniversary of the Effective Date, taking into account all Mandatory Payments made pursuant to paragraphs (A) and (C) (but, for greater certainty, not taking into account any Mandatory Payments made pursuant to paragraph (B) above, or any voluntary prepayments), then, notwithstanding paragraphs (iv) above, that Mandatory Payment shall not be paid, to the extent that such amount would cause the Tranche C Tax Threshold Amount to be exceeded, and shall instead be applied pursuant to paragraphs (v) through (viii), subject to the limitations provided therein.

	Any amount remaining after the application of Mandatory Payments above shall be kept by the Corporation.
7.	CONSTRAINED CLASS RESTRICTIONS.

7.1.          Definitions.

All terms used in this Section 7 which are defined in the Act or the Regulations shall have the meanings ascribed thereto in the Act or the Regulations, except a otherwise expressly provided for herein.

For the purposes of this Section 7, where a Voting Share is held, beneficially owned or controlled jointly, and one or more of the joint holders, beneficial owners or persons controlling the Voting Share is a member of the Constrained Class, the Voting Share is deemed to be held, beneficially owned or controlled, as the case may be, by such member of the Constrained Class.

7.2.

Issue and Transfer Restrictions, Etc.

7.2.1

The Board shall not issue (provided that a conversion pursuant to paragraphs 2.5, 3.4.7, 3.5.4, 4.4.7 and 4.5.4 hereof shall not represent an issue of Voting Shares, as the case may be for this purpose, although, for certainty, all other conversions represent such an issue) a Voting Share and shall refuse to register a transfer of a Voting Share to a person who is a member of the Constrained Class, if:

(a)	the total number of shares held by or on behalf of persons in the Constrained Class does not exceed the Maximum Aggregate Holdings and the issuance or transfer, as the case may be, of such Voting Shares would cause the number of shares held by persons in the Constrained Class to exceed the Maximum Aggregate Holdings; or
(b)	the total number of shares held by or on behalf of persons in the Constrained Class exceeds the Maximum Aggregate Holdings and the issuance or transfer, as the case may be, of such Voting Shares is to a person in the Constrained Class.

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	In the event that, for whatever reason, the Maximum Aggregate Holdings of Voting Shares by members of the Constrained Class is exceeded, the Corporation shall enjoy the rights and privileges set out in Section 46 of the Act, subject to the provisions of the Act and the Regulations namely, that it may sell, as if it were the owner thereof, any Voting Shares that are owned by members of the Constrained Class for the purpose of ensuring that the Maximum Aggregate Holdings of shares by members of the Constrained Class is not exceeded.
	The Board may refuse to issue or register a transfer of a Voting Share if the issue or transfer, as the case may be, is to a person who may be a member of a Constrained Class and who, in respect of the issue or registration of the transfer of such Voting Share, as the case may be, has been requested by the Corporation to furnish it with any information which may be requested by the directors as contemplated by subsection 86(1) of the Regulations, and has not furnished such information.
	Subject to the Act and the Regulations, the Board may establish, amend or repeal any procedures required to administer the constrained share provisions set out in this Section 7 and to require any affidavit, declaration or other statement required under the Canadian Ownership and Control Provisions.
7.2.2	No shareholder of the Corporation nor any other interested person shall have any claim or action against the Corporation or against any director or officer of the Corporation nor shall the Corporation have any claim or action against any director or officer of the Corporation arising out of any act (including any omission to act) performed pursuant to or in intended pursuance of the provisions of this Section 7 or any breach or alleged breach by the Corporation of any of the provisions of this Section 7, and, for greater certainty, no such person shall be liable for any damages or losses related to or as a consequence of any such act or any such breach or alleged breach of such provisions.
	In the administration of the provisions of this Section 7, the Board shall have, in addition to the powers explicitly set forth herein, all of the powers necessary or desirable, to carry out the intent and purpose hereof, including but not limited to all powers contemplated by the provisions relating to constrained share corporations in the Act and the Regulations and all power contemplated by the Canadian Ownership and Control Provisions with respect to the ownership of shares of a telecommunications common carrier, or a carrier holding corporation by non-Canadians.
7.2.3	In the event of any conflict between the provisions of this Section 7 and of the provisions in the Act and the Regulations relating to constrained share corporations or the Canadian Ownership and Control Provisions with respect to the ownership of shares of a telecommunications common carrier, or a carrier holding corporation, the provisions in the Act and Regulations or the Canadian Ownership and Control Provisions, as the case may be, shall prevail, and the provisions of this Section 7 shall be deemed to be amended accordingly and shall be retroactive in effect, as so amended.

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7.2.4 The Board shall ensure that share certificates in respect of Voting Shares shall have conspicuously noted thereon a reference to the constraints contained herein, in accordance with Section 49(10) of the Act.

7.2.5 The invalidity or unenforceability of any provision, in whole or in part, of this Section 7 for any reason shall not affect the validity or enforceability of any other provision thereof.

SCHEDULE “B”

TO THE PLAN OF ARRANGEMENT OF MICROCELL TELECOMMUNICATIONS INC.

DIRECTORS; TERMS OF DIRECTORS

Name	Group
André Bureau	A
Jim Continenza	B
Christian Dubé	B
Gary Goertz	B
Bob Latham	B
Berl Nadler	B
Paul McFarlane	B
Steven D. Scheiwe	A
Charles Sirois	A
André Tremblay	A
Lorie Waisberg	A

SCHEDULE “C”
TO THE PLAN OF ARRANGEMENT UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT

FORM OF SCHEDULE 2 TO THE ARTICLES OF THE APPLICANT

Section 1.1     Interpretation

In this Schedule 2, the following terms and expressions shall have the following meaning unless otherwise indicated:

“Class A Restricted Voting Shares” means Class A Restricted Voting Shares in the capital of the Corporation.

“Effective Date” means the date of implementation of the Plan.

“First Instruments” means the First Preferred Voting Shares, First Voting Units, First Preferred Non-Voting Shares and First Non-Voting Units, collectively.

“First Non-Voting Unit” means a First Unit which includes a First Preferred Non-Voting 2 Share.

“First Notes” means a series of subordinated convertible 9% notes of the Corporation included in the First Units issuable pursuant to a certain First Unit Indenture between the Corporation and Computershare Trust Company of Canada as trustee dated May 1, 2003.

“First Preferred Non-Voting Shares” means First Preferred Non-Voting Shares in the capital of the Corporation.

“First Preferred Non-Voting 2 Shares” means First Preferred Non-Voting 2 Shares in the capital of the Corporation.

“First Preferred Voting Shares” means First Preferred Voting Shares in the capital of the Corporation.

“First Preferred Voting 2 Shares” means First Preferred Voting 2 Shares in the capital of the Corporation.

“First Unit” means a unit consisting of a First Note together with one First Preferred Voting 2 Share or one First Preferred Non-Voting 2 Share, as the case may be.

“First Voting Instruments” means First Preferred Voting Shares and First Voting Units, collectively.

“First Voting Unit” means a First Unit which includes a First Preferred Voting 2 Share.

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“Plan” means that certain plan of reorganization and of compromise and arrangement dated February 17, 2003 under the Companies Creditors’ Arrangement Act (Canada) and the Canada Business Corporations Act in respect of 2861399 Canada Inc. (formerly known as Microcell Telecommunications Inc.) and certain of its subsidiaries, as amended.

“Second Notes” means a series of subordinated convertible 9% notes of the Corporation included in the Second Units issuable pursuant to a certain Second Note Indenture between the Corporation and Computershare Trust Company of Canada as trustee to be dated May 1, 2003.

“Second Preferred Non-Voting 2 Shares” means First Preferred Non-Voting 2 Shares in the capital of the Corporation.

“Second Preferred Voting Shares” means Second Preferred Voting Shares in the capital of the Corporation.

“Second Preferred Voting 2 Shares” means First Preferred Voting 2 Shares in the capital of the Corporation.

“Second Unit” means a unit consisting of a Second Note together with one Second Preferred Voting 2 Share or one Second Preferred Non-Voting 2 Share, as the case may be.

“Second Voting Unit” means a Second Unit which includes a Second Preferred Voting 2 Share.

Section 1.2 Staggered Terms

At the first meeting of shareholders of the Corporation at which an election of directors is required and at each annual meeting of shareholders of the Corporation thereafter, directors shall be elected to the board of directors of the Corporation to hold office for a stated term expiring at the close of the second annual meeting of shareholders following their election.

As redemptions of First Preferred Voting Shares (or First Voting Units, as the case may be) or conversions of First Preferred Voting Shares (or First Voting Units, as the case may be) into Class A Restricted Voting Shares occur from time to time, the number of directors nominated and elected to the board of directors of the Corporation by holders of First Preferred Voting Shares (or First Voting Units, as the case may be) shall be reduced, effective at the next annual meeting of the shareholders at which directors nominated and elected by holders of First Preferred Voting Shares (or First Voting Units, as the case may be) retire from office, according to the number of First Instruments outstanding on the date as of which information is provided to shareholders in the management proxy circular prepared for the meeting of shareholders in question relative to the aggregate number of First Instruments issued on the Effective Date, in accordance with the following table:

Percentage of First Instruments outstanding	Number of Directors nominated and elected
as a percentage of First Instruments issued	to the board of directors by the First Voting
on the Effective Date	Instruments
70% or more		7
50% to 69.99%		6

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Percentage of First Instruments outstanding	Number of Directors nominated and elected
as a percentage of First Instruments issued	to the board of directors by the First Voting
on the Effective Date	Instruments
30% to 49.99%		3
10% to 29.99%		2
Less than 10%		0

If holders of the First Preferred Voting Shares (or First Voting Units, as the case may be) lose the entitlement to elect one or more director(s) in accordance with the foregoing, holders of Class A Restricted Voting Shares, Second Preferred Voting Shares (or Second Voting Units, as the case may be) shall correspondingly be entitled to elect additional director(s) such that the number of directors of the board of directors of the Corporation shall equal 11

For greater certainty, holders of Class A Restricted Voting Shares and of Second Preferred Voting Shares (or Second Voting Units, as the case may be), shall not be entitled to exercise any vote in respect of the election of the directors to be elected by holders of First Preferred Voting Shares (or First Voting Units, as the case may be) and holders of First Preferred Voting Shares (or First Voting Units, as the case may be) shall not be entitled to exercise any vote in respect of the election of the directors to be elected by holders of Class A Restricted Voting Shares and of Second Preferred Voting Shares (or Second Voting Units, as the case may be).

EX-1.2 4 m10142orexv1w2.htm EX-1.2

Exhibit 1.2

MICROCELL TELECOMMUNICATIONS INC.

GENERAL BY-LAW

enacted pursuant to the
Canada Business Corporations Act

Adopted on May 1, 2003

BY LAW NO. 2003-1

GENERAL BY-LAW

OF THE CORPORATION

enacted pursuant to the
Canada Business Corporations Act

INDEX

Article 1 INTERPRETATION		1
	Section 1.1    Definitions	1
Article 2 LOCATION OF OFFICE AND CORPORATE SEAL		2
	Section 2.1  Offices	2
	Section 2.2    Seal	2
Article 3 BORROWING AND SECURITY		2
	Section 3.1    Borrowing Power	2
	Section 3.2    Delegation	3
Article 4 SHAREHOLDERS		3
	Section 4.1    Annual Meetings	3
	Section 4.2    Special Meetings	3
	Section 4.3    Place of Meetings	3
	Section 4.4    Meetings by Telephonic, Electronic or other Communication Facility	3
	Section 4.5    Notice of Meetings	3
	Section 4.6    Chair	4
	Section 4.7    Quorum	4
	Section 4.8    Representation at Meetings	5
	Section 4.9    Voting	6
	Section 4.10   Electronic Voting by Shareholders	6
	Section 4.11  Voting while Participating Electronically	6
	Section 4.12   Procedure at Meeting	6
	Section 4.13   Scrutineers	7
	Section 4.14   Subsequent Transferees	7
	Section 4.15   Signed Resolution	7
Article 5 DIVIDENDS AND RIGHTS		7
	Section 5.1    Dividends	7
	Section 5.2    Entitlement to Dividends upon Transfer	7
	Section 5.3    Dividend Cheques	7
	Section 5.4    Non-Receipt or Loss of Cheque	8
	Section 5.5    Record Date for Dividends and Rights	8

Article 6 DIRECTORS		8
	Section 6.1    Board of Directors	8
	Section 6.2    Election and Term of Office	9
	Section 6.3    Meetings and Notices	9
	Section 6.4    Meetings by Communications Facilities	10
	Section 6.5    Quorum	10
	Section 6.6    Voting	10
	Section 6.7    Remuneration	10
	Section 6.8    Signed Resolutions	11
	Section 6.9    Powers of Directors	11
	Section 6.10   Power to Allot Stock and Grant Options	11
	Section 6.11   Chairman of the Board	11
Article 7 OFFICERS		12
	Section 7.1    Officers	12
	Section 7.2    President	12
	Section 7.3    Chief Executive Officer	12
	Section 7.4    Chief Financial Officer	13
	Section 7.5    Vice-President	13
	Section 7.6    Secretary	13
	Section 7.7    Treasurer	13
	Section 7.8    Powers of Officers	13
	Section 7.9    Removal and Discharge	14
	Section 7.10   Remuneration	14
Article 8 COMMITTEES		14
	Section 8.1    Election	14
	Section 8.2    Chairman, Quorum and Procedure	14
	Section 8.3    Secretary	14
	Section 8.4    Powers	14
	Section 8.5    Proceedings Open to the Board	14
	Section 8.6    Meetings	14
	Section 8.7    Signed Resolutions	15
	Section 8.8    Remuneration	15
	Section 8.9    Removal and Replacement	15
Article 9 INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS		15
	Section 9.1    Liability	15
	Section 9.2    Indemnity	15
	Section 9.3    Insurance	16
Article 10 SHARE CAPITAL		16
	Section 10.1    Security Certificates and Stock Transfers	16
	Section 10.2    Securities Register	17
	Section 10.3    Transfer Agents and Registrars	17
	Section 10.4    Record Date and Closing of Books	17

ii

	Section 10.5    Lost and Destroyed Certificates	17
Article 11 FISCAL YEAR AND AUDIT		18
	Section 11.1    Fiscal Year	18
	Section 11.2    Audit	18
Article 12 CORPORATION REPRESENTATION FOR CERTAIN PURPOSES		18
	Section 12.1    Declaration	18
	Section 12.2    Representation at Meetings	18
Article 13 NOTICES		19
	Section 13.1    Method of Giving Notices	19
	Section 13.2    Notice by Electronic Document	20
	Section 13.3    Signatures by Electronic Document	20
	Section 13.4    Notice to Joint Shareholders	21
	Section 13.5    Computation of Time	21
	Section 13.6    Undelivered Notices	21
	Section 13.7    Omissions and Errors	21
Article 14 MISCELLANEOUS		21
	Section 14.1    Conflict Rule	21
	Section 14.2    Execution of Instruments	21
	Section 14.3    Banking Arrangements	22

iii

BY-LAW NO. 2003-1
GENERAL BY-LAW
OF THE CORPORATION

enacted pursuant to the
Canada Business Corporations Act

Be it enacted as a by-law of MICROCELL TELECOMMUNICATIONS INC. (the “Corporation”) as follows:

ARTICLE 1
INTERPRETATION

Section 1.1     Definitions.

Subject to an express disposition to the contrary, or where the context requires otherwise, in this By-law:

“Affiliate” has the meaning given to that term in the Act;

“Act” means the Canada Business Corporations Act, (R.S.C., 1985, C-44), as from time to time amended; in the event of any amendment to the Act, any reference contained in these By-laws shall be interpreted as a reference to the amended provisions of the Act;

“Articles” means the articles of the Corporation and any subsequent amendments;

“Board” means the Board of directors of the Corporation;

“By-laws” means the by-laws of the Corporation that are in force at any given time;

“Electronic Document” means any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means;

“Information System” means a system used to generate, send receive, store, or otherwise process an Electronic Document;

“Recorded Address” means in the case of a shareholder the address as recorded in the securities register; and in the case of joint shareholders the address appearing in the securities register in respect of such joint holding or the first address so appearing if there are more than one; and in the case of a director, officer, auditor or member of a committee of the Board, the latest address as recorded in the records of the Corporation.

Defined terms which are used but not defined in this By-law shall have the meaning ascribed to them in the Articles.

     Terms used in the singular include the plural and vice versa, those used in the masculine include the feminine and vice versa, and the dispositions which apply to physical persons apply also to bodies corporate including corporations and other groups not constituted in corporations.

     Titles are used in this By-law as reference only and must not be considered in the interpretation of this By-law.

ARTICLE 2
LOCATION OF OFFICE AND CORPORATE SEAL

Section 2.1     Offices.

          The Corporation may, in addition to its registered office, establish elsewhere within or without Canada such offices and agencies as the Board may from time to time determine.

Section 2.2     Seal.

          The Corporation may have a seal which shall bear the name of the Corporation. The seal of the Corporation shall be adopted or changed by resolution of the Board. A document emanating from the Corporation shall not be invalid merely because the seal of the Corporation is not affixed thereto.

ARTICLE 3
BORROWING AND SECURITY

Section 3.1     Borrowing Power

          Without limiting the borrowing powers of the Corporation as set forth in the Act or the Articles, the Board may from time to time on behalf of the Corporation, without authorization of the shareholders:

(a)	borrow money upon the credit of the Corporation;
(b)	issue, reissue, sell or pledge debt obligations of the Corporation, whether secured or unsecured;
(c)	to the extent permitted by the Act, give a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and
(d)	mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of the Corporation to secure any present or future obligation of the Corporation.

2

Section 3.2     Delegation.

          Subject to the Act and the Articles, the Board may from time to time delegate to a committee, a director or an officer, all or any of the powers conferred to the Board by Article 3 or by the Act, to such extent and in such manner, as the Board may determine at the time of such delegation.

ARTICLE 4
SHAREHOLDERS

Section 4.1     Annual Meetings.

          Subject to the provisions of the Act, the annual meeting of the shareholders of the Corporation shall be held on such date in each year, at such time and, subject to Section 4.3, at such place as the Board may determine, to receive and consider the financial statements with the report of the auditor or auditors, to elect directors, to appoint an auditor or auditors and to fix or to authorize the Board to fix the auditors’ remuneration and to consider, deal with and dispose of such other business as may properly come before a meeting of shareholders.

Section 4.2     Special Meetings.

          Special meetings of the shareholders may be called at any time by resolution of the Board or by the president or the chairman of the Board and shall be called when required by the shareholders in conformity with the Act.

Section 4.3     Place of Meetings.

          Meetings of the shareholders shall be held at the registered office of the Corporation or elsewhere in the municipality in which the registered office is located or at such other place in Canada as may be fixed by the Board.

Section 4.4     Meetings by Telephonic, Electronic or other Communication Facility.

          Any person entitled to attend a meeting of shareholders may participate in the meeting, to the extent and in the manner permitted by law, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the Corporation makes available such a communication facility. A person participating in a meeting by such means is deemed for the purposes of the Act to be present at the meeting. The directors or the shareholders of the Corporation who call a meeting of shareholders pursuant to the Act may determine that the meeting shall be held, to the extent and in the manner permitted by law, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

Section 4.5     Notice of Meetings.

          Notice of each annual meeting and of each special meeting of the shareholders shall be given in the manner provided in Article 13 to the shareholders entitled to vote thereat, to the

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shareholders entitled to receive such notice, to the directors and to the auditor or auditors at their respective addresses as they appear in the records of the Corporation, not less than 21 days and not more than 60 days prior to the date fixed for such meeting, subject to the provisions of any applicable securities legislation. If the address of any shareholder, director or auditor does not appear in the record of the Corporation, the notice may be sent as aforesaid to such address as the person sending the notice may consider to be most likely to reach promptly such shareholder, director or auditor.

          A shareholder and any other person entitled to attend a meeting of shareholders may waive such notice in writing, by Electronic Document, before or after the holding of such meeting or by attending thereat in person, or, in the case of shareholders, by proxyholder or in the case of a body corporate or association by a representative duly authorized in accordance with the provisions of Section 4.8; nevertheless, a person who attends such a meeting is not deemed to have waived the right to notice of the meeting when he so attends for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

          The notice of the annual meeting, as well as the notice of special meeting, shall state:

(a)	the time, date and place of the meeting as well as the nature of business to be considered in sufficient detail to permit the shareholder to form a reasoned judgment thereon; and
(b)	the text of any special resolution to be submitted to the meeting.

          It is not necessary to give notice of the reconvening of an adjourned meeting other than by announcement at the earliest meeting that is adjourned; a new notice of meeting is, however, required if the shareholders’ meeting is adjourned one or more times for an aggregate of 30 days or more.

Section 4.6     Chair.

          The chairman of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed, who is present at the meeting and who has not declined to act as chairman: the chairman of the Board, the president or a vice-president of the Corporation. If no such officer is present within 30 minutes from the time fixed for holding the meeting, the persons present and entitled to vote shall choose one of their number to be chairman. The chairman shall not have a second or casting vote. The secretary of the Corporation, or in his absence the assistant-secretary, shall also act as secretary of all shareholders’ meetings, provided that, if no such officer is present, the chairman of the meeting shall appoint some person, who need not be a shareholder, to act as secretary of the meeting.

Section 4.7     Quorum.

          The quorum of shareholders at an annual or special meeting of shareholders is fixed at five shareholders entitled to vote at such meeting, present in person or represented either by proxy or by an individual acting on behalf of a body corporate or association and duly authorized by a resolution of the Board or governing body of the body corporate or association

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to represent it at meetings of shareholders of the Corporation, irrespective of the number of shares held by such shareholders.

          If a quorum is present at the opening of the meeting, the shareholders present or represented may proceed with the business of the meeting, notwithstanding the fact that a quorum is not present throughout the meeting.

          If a quorum is not present at the opening of the meeting, the shareholders present or represented may adjourn the meeting to a fixed time (which should be at least two business days after the date of the opening of the meeting) and place but may not transact any other business.

          The quorum at the reconvening of the meeting so adjourned is fixed at five shareholders entitled to vote at such meeting present or represented in accordance with this By-law, irrespective of the number of shares held by such shareholders. The meeting may then proceed to examine and dispose of the business for which it was called. If at the time of the reconvening of the meeting so adjourned a quorum is not present the meeting must again be adjourned or, if 30 days or more have elapsed from the date of the originally scheduled meeting, a new meeting must be called.

          Section 4.8      Representation at Meetings.

          Shareholders shall be entitled to vote in person or, if a body corporate or association, by a representative duly authorized by resolution of the Board or other governing body of such body corporate or association. Shareholders shall also be entitled to vote by proxyholder or by one or more alternative proxyholders, whether or not such proxyholder is himself a shareholder; the proxyholder shall attend the meeting, vote thereat and otherwise act in the manner and to the extent authorized and with the authority conferred by the proxy.

          A proxy shall be signed by the shareholder or by his agent authorized in writing and this signature need not be witnessed.

          A proxy is valid only at the meeting in respect of which it is given or any adjournment thereof.

          The instrument appointing a proxyholder may, except in cases where the law otherwise provides, be in the form provided by law or in any other appropriate form.

          The Board shall specify in the notice calling a meeting of shareholders, a time not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or any adjournment thereof, before which time proxies to be used at the meeting must be deposited with the Corporation or its agent.

          The Board may also permit particulars of proxies for use at or in connection with any such meeting which have been deposited with the Corporation or its agent at a place other than the place of such meeting to be sent to the secretary of the Corporation prior to such meeting. In such event, such proxies if otherwise in order shall be valid and any votes cast in accordance therewith shall be counted.

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Section 4.9     Voting.

          Every question submitted to any meeting of shareholders shall be decided by a show of hands unless a ballot is ordered or required in the manner hereinafter set out.

          The chairman of such meeting may, in his discretion, order a ballot. Moreover, any shareholder or its representative, where the shareholder is a body corporate or an association, or his proxyholder, either before or after any vote by show of hands, may require a ballot on any question at any time before the termination of the meeting. A demand for a ballot may be withdrawn.

          If at any meeting a ballot is to be taken, it shall be taken in such manner and either at once or after adjournment as the chairman directs. The result of a ballot shall be deemed to be a resolution of the meeting at which the ballot was taken whether or not a vote on a show of hands had previously been taken on the same question.

          At all meetings of shareholders, every shareholder entitled to vote thereat, whether present in person or by proxyholder, or, in the case of a body corporate or association by a duly authorized representative, shall be entitled to exercise the number of votes per share as is prescribed in the Articles; however, if by virtue of the Act another scale of voting rights is fixed with respect to a particular matter or to another class of shares, such scale of voting shall be adopted.

          The act of shareholders, their representatives or their proxyholders casting a majority of the votes in respect of shares so represented shall be the act of the shareholders, except where the affirmative vote of the shareholders casting a greater majority than a simple majority is required by the Act, or the Articles, or the By-laws of the Corporation.

Section 4.10      Electronic Voting by Shareholders.

          Any vote at a meeting of the shareholders may be held, to the extent and in the manner permitted by law, entirely by means of a telephonic, electronic or other communication facility, if the Corporation makes available such a communication facility.

Section 4.11      Voting while Participating Electronically.

          Any person participating in a meeting of shareholders by electronic means as provided in Section 4.4 and entitled to vote at that meeting may vote, to the extent and in the manner permitted by law, by means of the telephonic, electronic or other communication facility that the Corporation has made available for that purpose.

Section 4.12      Procedure at Meeting.

          The chairman of any meeting of shareholders shall conduct the procedure thereat in all respects and shall be entitled to take decisions on all matters, including, but without in any way limiting the generality of the foregoing, any question regarding the validity or invalidity of any proxy.

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           A declaration by the chairman at any meeting that a resolution has been carried or carried unanimously or carried by any particular majority or lost or not carried by a particular majority shall be prima facie evidence of the fact.

Section 4.13      Scrutineers.

          The chairman of any meeting of shareholders may appoint up to two persons, who may but need not be directors, officers, employees or shareholders of the Corporation, to act as scrutineers at such meeting.

Section 4.14      Subsequent Transferees.

          Every person who, by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which, prior to his name and address being entered on the register, shall be given to the person whose name appears on the register at the time such notice is given.

Section 4.15      Signed Resolution.

          Except in cases prohibited by law, a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders.

          A copy of every resolution referred to in the preceding paragraph shall be kept with the minutes of the meeting of shareholders.

ARTICLE 5
DIVIDENDS AND RIGHTS

Section 5.1      Dividends.

          Subject to the Act and the Articles, the Board may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid in money or in property or by issuing fully paid shares of the Corporation. Any dividend unclaimed after a period of 6 years from the date on which it was declared to be payable shall be forfeited and shall revert to the Corporation.

Section 5.2      Entitlement to Dividends upon Transfer.

          Transfers of shares shall not transfer the right to dividends declared thereon before the registration of the transfer thereof. In the event that more than one person is registered as the joint holder of any share, any one of such persons may effectively waive or transfer the right to receive dividends in respect of such share.

Section 5.3      Dividend Cheques.

          A dividend payable in money may be paid in Canadian dollars or in any equivalent amount in any other currency, at the discretion of the Board, and shall be paid by cheque to the

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order of each registered holder of shares of the class or series in respect of which the dividend has been declared. The cheque shall be mailed by prepaid ordinary mail to the registered holder at such holder’s Recorded Address, unless the holder otherwise directs.

          In the case of joint holders, the cheque shall be made payable to the order of all the joint holders unless the joint holders otherwise direct and, if more than one address is recorded in the Corporation’s securities register in respect of such joint holding, the cheque shall be mailed to the first address so appearing.

          Unless the cheque is not paid on due presentation, the mailing of a dividend cheque shall satisfy and discharge the Corporation’s liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold.

Section 5.4      Non-Receipt or Loss of Cheque.

          In the event of non-receipt of any dividend cheque by the person to whom the cheque is sent, the Corporation shall issue a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt and of title as the Board may from time to time prescribe, whether generally or in any particular case.

Section 5.5      Record Date for Dividends and Rights.

          Subject to the provisions of any applicable securities legislation, the Board may fix in advance a date, preceding by not more than 60 days the date for the payment of any dividend or the date for the issue of any right to subscribe for securities of the Corporation, as a record date for the determination of the persons entitled to receive payment of the dividend or to exercise the right to subscribe for those securities.

          Notice of any such record date shall be given not fewer than 7 days before the record date in the manner provided by the Act. If no such record date is fixed, such record date shall be at the close of business on the day on which the resolution relating to the dividend or right to subscribe is passed by the Board.

ARTICLE 6
DIRECTORS

Section 6.1     Board of Directors.

          Where the Articles provide that the Board shall consist of a fixed number of directors, the Board shall consist of the number fixed within the said Articles. Where the Articles of the Corporation provide for a minimum and maximum number of directors, the Board for the time being shall consist of that number of directors elected by the shareholders at the preceding meeting in accordance with the provisions of the law. The number of members of the Board may be changed, within the limits permitted by the Act and the Articles, by a resolution of the Board or a resolution of the shareholders.

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Section 6.2     Election and Term of Office.

          Directors shall be elected by the shareholders by ordinary resolution. A vote by ballot shall not be necessary for the election of the directors of the Corporation unless it is required by someone present and entitled to vote at the meeting at which such election takes place. Subject to the provisions of the Articles and except where a director has been elected for an expressly stated term, a director’s term of office shall be from the date of the meeting at which he is elected or appointed until the close of the next annual meeting of shareholders at which an election of directors takes place or until his successor is elected or appointed.

          The office of a director shall be automatically vacated:

(a)	if he dies;
(b)	if he is removed or disqualified as provided for by law; or
(c)	if he resigns his office.

          Except as otherwise required by law, a vacancy among directors may be filled by a person appointed by the director(s), who were elected by the same shareholders as the director to be replaced, if any, and in the absence of any such directors, by the shareholders who appointed the director to be replaced. The successor director shall be appointed for the balance of the term of the director so replaced.

          No person shall be qualified for election as a director if he is less than 18 years of age; if he is of unsound mind and has been so found by a court in Canada or elsewhere; if he is not an individual; or if he has the status of a bankrupt. A director need not be a shareholder. A majority of the directors shall be resident Canadians, unless otherwise permitted by law. A retiring director, if otherwise qualified, shall be eligible for re-election.

Section 6.3     Meetings and Notices.

          Immediately after the annual meeting of shareholders in each year, a meeting of the directors who are then present shall be held without further notice, provided a quorum is present, for the appointment of the officers of the Corporation; such meeting may transact such other business as may come before it.

          Meetings of the Board may be called by or by the order of the chairman of the Board, the president, a vice-president if he is also a director, or any two directors and may be held at any place within or outside of Canada. Notice specifying the place, date and time of each such meeting shall be given to each director in the manner prescribed in Article 13 at least 48 hours prior to the date and time fixed for such meeting, or in case of emergency at least 12 hours prior to the time fixed for the meeting. If the address of any director does not appear in the records of the Corporation, then such notice may be sent as aforesaid to such address as the person sending the notice may consider to be most likely to reach such director promptly.

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           The Board may from time to time provide for the holding of regular meetings of the Board at such place, within or without Canada, with or without notice, as may be determined by resolution.

          A notice of a meeting of directors shall specify any matter referred to in subsection 115(3) of the Act that is to be dealt with at the meeting but otherwise need not specify the purposes for which it is called or the nature of the business to be transacted at such meeting.

          No notice of the date, time and place of any meeting of the Board need be given to any director who waives notice thereof, either in writing by Electronic Document before or after the holding thereof or who is present thereat; nevertheless, a director’s presence at such meeting shall not constitute a waiver of notice if the director so attends for the express purpose of objecting to the transaction of any business on the grounds that not lawfully called.

          It is not necessary to give notice of the reconvening of an adjourned meeting if the date, time and place of the reconvening of this meeting is announced at the original meeting.

Section 6.4     Meetings by Communications Facilities.

          A director may, to the extent and in the manner permitted by law, participate in a meeting of directors or of a committee of directors by means of telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, but only if all the directors of the Corporation have consented to that form of participation. A director participating in such a meeting by such means is deemed for the purposes of the Act to be present at that meeting. Any such consent shall be effective whether given before or after the meeting to which it relates and may be given with respect to all meetings of the Board and of committees of the Board held while a director holds office.

Section 6.5     Quorum.

          A majority of the number of directors of which the Board consists shall constitute a quorum for a meeting of the Board. Notwithstanding any vacancy among the directors, a quorum may exercise all the powers of the directors provided, however, that no business shall be transacted at a meeting of directors unless a majority of directors present are resident Canadians. If a quorum is present at the opening of a Board meeting, the Board may proceed with the business of the meeting, notwithstanding the fact that a quorum is not present throughout the meeting.

Section 6.6     Voting.

          Questions arising at any meeting of the directors shall be decided by a majority of the votes of those present.

Section 6.7     Remuneration.

          The remuneration to be paid to the directors shall be fixed by the Board from time to time. The directors may also be paid such traveling and other expenses properly incurred by

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           them in connection with the business and affairs of the Corporation as may be determined by resolution of the Board.

Section 6.8     Signed Resolutions.

          A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of the Board is as valid as if it had been passed at a meeting of the Board.

          A copy of every resolution referred to in the preceding paragraph shall be kept with the minutes of the meetings of the Board.

Section 6.9     Powers of Directors.

          The Board shall supervise the management of the business and affairs of the Corporation and shall exercise all such powers and authority as the Corporation is authorized to exercise by the Act, the Articles or the By-laws and which are not by the Act, the Articles or the By-laws required to be exercised exclusively by the shareholders or with their consent.

          Notwithstanding that it be afterwards discovered that there was some defect or irregularity in the election of the Board or in the election of any person acting as director or in his qualification, all acts of the Board or of any person acting as director shall be as valid and binding upon the Corporation as if every such Board or person had been duly elected and had been qualified.

Section 6.10     Power to Allot Stock and Grant Options.

          Subject to the Articles or any other by-law restricting the allotment and issue of the shares of the capital stock of the Corporation, the Board may, from time to time, accept subscriptions, allot, issue, grant options or otherwise dispose of the whole or any part of the unissued shares of the Corporation to such persons, on such terms and conditions and for such consideration and in such manner not contrary to law, the Articles or By-laws as the Board thinks fit.

Section 6.11     Chairman of the Board.

          The Board may from time to time appoint a chairman of the Board who may or may not be an officer of the Corporation.

          The chairman of the Board shall preside at all meetings of the Board and shall exercise such other powers and authority and perform such other duties which the Board may from time to time prescribe.

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ARTICLE 7
OFFICERS

Section 7.1     Officers.

          The Board may from time to time appoint a president, a chief executive officer, a chief financial officer, one or more vice-presidents (to which title may be added words indicating seniority or function), a secretary, a treasurer, one or more assistant-secretaries or assistant-treasurers and such other officers as the Board may from time to time deem necessary to appoint. Subject to those powers which, by law, may only be exercised by the Board, the president and if appointed, the other officers of the Corporation, shall respectively exercise such powers and authority and shall perform such duties, in addition to those specified in this By-law, as may from time to time be prescribed by the Board. The Board may vary, add to or limit the powers and duties of any officer. The same person may hold two or more of the offices in the Corporation. None of the officers of the Corporation need be directors of the Corporation. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the Board otherwise directs.

          The Board may also from time to time appoint other agents, attorneys, officers or employees of the Corporation within or outside Canada, who may be given such titles and who shall exercise such powers and authority (including the power of sub-delegation) and perform such duties of management or otherwise, as the Board or the president may from time to time determine.

          In case of the absence of any officer or employee of the Corporation, or for any other reason that the Board may deem sufficient, the Board may delegate for the time being the powers and authority of such officer or employee to any other officer or employee or to any director of the Corporation.

Section 7.2     President.

          The president, subject to the control of the Board, shall supervise, administer and manage the business and affairs of the Corporation generally. The president shall also preside at all meetings of the Board in the event of the absence, inability or failure of the chairman of the Board to so act. The president shall exercise such other powers and authority and perform such other duties as may from time to time be prescribed by the Board.

Section 7.3     Chief Executive Officer.

          The chief executive officer shall manage the operations of the Corporation generally, and shall exercise such other powers and authority and perform such other duties as may from time to time be prescribed by the Board.

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Section 7.4     Chief Financial Officer.

          The chief financial officer shall manage the finances of the Corporation generally, and shall exercise such other powers and authority and perform such other duties as may from time to time be prescribed by the Board.

Section 7.5     Vice-President.

          The vice-president, or if more than one, the vice-presidents, shall exercise such powers and authority and perform such duties as may from time to time be prescribed by the Board or by the president.

Section 7.6     Secretary.

          The secretary (or any other officer designated by the chairman of the Board) shall attend to the giving of all notices of the Corporation. The secretary (or any other officer designated by the chairman of the Board) shall keep the minutes of all meetings of the Board, all the committees of the Board and the shareholders in a book or books to be kept for that purpose. The secretary shall keep in safe custody the corporate seal of the Corporation. The secretary shall have charge of the records of the Corporation including records containing the names and addresses of the members of the Board, together with copies of all reports made by the Corporation and such other records and papers as the Board may direct. The secretary shall be responsible for the keeping and filing of all records, reports, certificates and all other documents required by law to be kept and filed by the Corporation. The secretary shall be subject to the control of the president and shall exercise such other powers and authority and perform such other duties as may from time to time be prescribed by the Board or by the president.

Section 7.7     Treasurer.

          The treasurer shall have general charge of the finances of the Corporation. The treasurer shall deposit all moneys and other valuable effects of the Corporation in the name and to the credit of the Corporation in such banks or other depositories as the Board may from time to time designate; the treasurer shall render to the president and to the Board, whenever so directed, an account of the financial situation of the Corporation and of all transactions effected as treasurer; as soon as possible after the close of each fiscal year the treasurer shall prepare and submit to the president and to the Board a like report for such fiscal year. The treasurer shall have charge and custody of and be responsible for the keeping of the books of account. The treasurer shall be subject to the control of the president and shall exercise such other powers and authority and perform such other duties as may from time to time be prescribed by the Board or by the president.

Section 7.8     Powers of Officers.

           Notwithstanding that it be afterwards discovered that there was some defect or irregularity in the election of the Board or in the appointment of any person acting as officer or in his qualification, all acts of the Board or of any person acting as officer shall be as valid and

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binding upon the Corporation as if every such Board or person had been duly appointed and had been qualified.

Section 7.9     Removal and Discharge.

          The Board may remove any officer with or without cause at any time. Any agent or employee who is not an officer of the Corporation may be discharged by the president with or without cause at any time.

Section 7.10     Remuneration.

          The remuneration, if any, to be paid to officers appointed by the Board shall be fixed from time to time by a resolution of the Board.

ARTICLE 8
COMMITTEES

Section 8.1     Election.

          The Board may, from time to time, appoint from among the directors on the Board, members of committees of the Board, however designated, containing such proportion of Canadian residents as may be required by law.

Section 8.2     Chairman, Quorum and Procedure.

          Any committee of the Board shall have power to appoint a chairman and a vice-chairman, to fix its quorum, which quorum shall consist of not less than a majority of its members, and to determine its procedure.

Section 8.3     Secretary.

          The secretary of the Corporation shall act as secretary of each committee of the Board unless some other secretary be appointed by the committee.

Section 8.4     Powers.

          The Board may delegate to any committee of the Board any of the powers of the Board except those which by the Act a committee of the Board has no authority to exercise.

Section 8.5     Proceedings Open to the Board.

          Subject to any restriction issued by a government or regulatory authority, all proceedings of committees of the Board shall be open to the examination of the Board and shall be reported to the Board if and when the Board so directs.

Section 8.6     Meetings.

          Meetings of committees of the Board may be held at the registered office of the Corporation or at such other place within or outside Canada as a committee may from time to

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time determine. Meetings of a committee may be called by or by the order of the president, the chairman of the committee, the chairman of the Board or any two members thereof.

Section 8.7     Signed Resolutions.

          A resolution in writing signed by all the members of a committee of the Board entitled to vote on that resolution at a meeting of the committee of the Board is as valid as if it had been passed at a meeting of the committee of the Board.

          A copy of every resolution referred to in the preceding paragraph shall be kept with the minutes of the meetings of the committee of the Board.

Section 8.8      Remuneration.

          The members of a committee of the Board shall be entitled to receive such remuneration for their services as members of the committee as the Board may from time to time determine.

Section 8.9     Removal and Replacement.

          The Board may from time to time remove any member of a committee of the Board from office.

          The Board may also from time to time fill any vacancy which may occur in the membership of a committee.

ARTICLE 9
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS

Section 9.1     Liability.

          No director or officer shall be liable for the acts, receipts, neglects or defaults of any other director, officer or employee of the Corporation, or for joining any receipt of other act for conformity, or for any loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired for or on behalf of the Corporation, or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Corporation shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous acts of any person with whom any of the moneys, securities or effects of the Corporation shall be deposited, or for any loss occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune which shall happen in the execution of the duties of his office or in relation thereto, provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof.

Section 9.2     Indemnity.

          Subject to the limitations provided by law, the Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation or another individual who acts or acted at the Corporation’s request as a director or officer or an individual acting in a

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similar capacity, of another entity (as such term is defined in the Act) against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment and including attorney’s fees, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party because of that association with the Corporation or other entity, if:

(1)	he acted honestly and in good faith with a view to the best interests of the Corporation, or, as the case may be, to the best interest of the other entity for which the individual acted as a director or officer or in a similar capacity at the Corporation’s request; and
(2)	in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

          The Corporation shall advance the necessary moneys to a director, officer or other individual for the costs, charges and expenses (including attorney’s fees) for an action or a proceeding referred to previously. The individual shall repay the moneys if the individual does not fulfill the previously named conditions.

          The Corporation shall also indemnify such person in such other circumstances as the Act permits or requires. Nothing in this By-law shall limit the right of any person entitled to indemnify to claim indemnity apart from the provisions of this By-law.

Section 9.3     Insurance.

          The Corporation may purchase and maintain insurance for the benefit of any person referred to in Section 9.1, above, against such liability as the Board may from time to time determine, and as permitted by law.

ARTICLE 10
SHARE CAPITAL

Section 10.1     Security Certificates and Stock Transfers.

          Certificates representing securities in the capital of the Corporation shall bear the signature of the chairman, the president or a vice-president and the secretary or assistant-secretary. The signature of the chairman, the president or vice-president may be engraved, lithographed or otherwise mechanically reproduced thereon and, should the Corporation have appointed a transfer agent, the signature of the secretary or assistant-secretary may also be engraved, lithographed or otherwise mechanically reproduced. Any certificates bearing the facsimile reproduction of the signatures of such authorized officers shall be deemed to have been manually signed by them and shall be as valid to all intents and purposes as if it had been so manually signed notwithstanding that the persons whose signatures are so reproduced shall have ceased to be officers of the Corporation on the date of such certificate or at the time that it is issued. Unless required by the rules of any stock exchange on which the securities of the Corporation are listed it shall not be necessary to affix the corporate seal of the Corporation to a share certificate. Each certificate must carry all notations required by law and be countersigned by one of the transfer agents and registrar of the Corporation.

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Section 10.2     Securities Register.

          A central securities register shall be maintained by the Corporation or its agent at the registered office or at any other place in Canada designated by the Board. The Board may, from time to time, provide that one or more branch securities registers shall be maintained at such places within Canada or elsewhere, as may be designated by a resolution and may appoint officers or agents to maintain the same and to effect and record therein transfers of securities in the capital of the Corporation.

Section 10.3     Transfer Agents and Registrars.

          Agents of the Corporation charged with the maintenance of the central or branch securities registers may be designated as transfer agents and/or registrars of transfers, according to their functions. The Board may at any time terminate the appointment of such transfer agents and/or registrars.

Section 10.4     Record Date and Closing of Books.

          Subject to compliance with the Act, with any other applicable law and with the rules of any stock exchange on which the securities of the Corporation are listed, the Board may fix in advance, by resolution, a date not exceeding 60 days preceding the date for payment of a dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares of the share capital of the Corporation shall go into effect, as the record date for the determination of the shareholders entitled to receive payment of such dividend, the allotment of such rights or the exercise of such rights in respect of such change, conversion or exchange of the share capital of the Corporation with the effect that only the shareholders of record on the date so fixed by the Board shall be entitled to receive payment of such dividend, or allotment of rights, or to exercise such rights, as the case may be, notwithstanding a transfer of any shares on the books of the Corporation after such record date.

Section 10.5     Lost and Destroyed Certificates.

          The Board may, upon such terms and conditions as to indemnity and otherwise as they may deem advisable, direct that a new certificate or certificates of securities be issued to replace any certificate or certificates of securities previously issued by the Corporation that have been worn out, lost, stolen or destroyed. The Board, when authorizing the issue of such new certificate or certificates, may, in its discretion, and as a condition precedent thereto, require the owner of such worn-out, lost, stolen or destroyed certificate or his legal representatives to give to the Corporation or to the transfer agent or transfer agents and to such registrar or registrars, as may be authorized or required to countersign such new certificate or certificates, a bond in such sum as they may direct, as indemnity against any claim that may be made against them or either of them for or in respect of the securities represented by such certificates alleged to have been worn out, lost, stolen or destroyed.

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ARTICLE 11
FISCAL YEAR AND AUDIT

Section 11.1     Fiscal Year.

          The period for the fiscal year of the Corporation shall be determined from time to time by the Board.

Section 11.2     Audit.

          The shareholders, at each annual meeting, shall appoint an auditor or auditors to hold office until the next annual meeting and until the appointment of his or their successor or successors, unless he or they resign or his or their office becomes vacant by his or their death, if applicable. At least once in every fiscal year, such auditor or auditors shall examine the accounts of the Corporation and the financial statements to be presented at the annual meeting, and shall report thereon to the shareholders.

ARTICLE 12
CORPORATION REPRESENTATION FOR CERTAIN PURPOSES

Section 12.1     Declaration.

          The president, any vice-president, the chief executive officer, the chief financial officer, the secretary, the assistant-secretary and the treasurer or any one of them or any other officer or person thereunto authorized by the Board is authorized and empowered to make answer for the Corporation to all writs, orders and interrogatories upon articulated facts issued out of any Court, to answer and/or oppose for and on behalf of the Corporation all seizures and to declare for and on behalf of the Corporation to writs of attachment by way of garnishment in which the Corporation is garnishee, to make all affidavits and sworn declarations in connection therewith or in connection with any judicial proceedings to which the Corporation is a party, to make petitions for winding-up, sequestration or bankruptcy against any debtor of the Corporation, to attend and vote at all meetings of creditors of the Corporation’s debtors and to grant proxies in connection therewith.

Section 12.2     Representation at Meetings.

          Subject to the provisions of any other by-law of the Corporation, the president, any vice-president, the chief executive officer, the chief financial officer, the secretary, the assistant-secretary and the treasurer, or any one of them or any other officer or person thereunto authorized by the Board shall represent the Corporation, attend and vote at any meeting of shareholders or members of any firm, company, corporation or syndicate in which the Corporation holds shares or is otherwise interested, and any action taken and/or vote cast by them or one of them at any such meeting shall be deemed to be the act and/or vote of the Corporation.

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           Any two of the president, any vice-president, the chief executive officer, the chief financial officer, the secretary, the assistant-secretary and the treasurer shall moreover be empowered to authorize any person (whether an officer of the Corporation or not) to attend, vote and otherwise act at all meetings of shareholders or members of any firm, company, corporation or syndicate in which the Corporation holds shares or is otherwise interested, and for this purpose, such officers shall be authorized to execute and to deliver from time to time for and on behalf and in the name of the Corporation a proxy in such form and terms as such officers see fit, including therein, but without in any way limiting or restricting the generality of the foregoing, provision for the appointment of a substitute proxyholder and the revocation of all proxies given by the Corporation prior thereto with respect to any such meeting.

ARTICLE 13
NOTICES

Section 13.1     Method of Giving Notices.

          Any notice (which term includes any communication or document) to be given (which term includes sent, delivered or served) pursuant to the Act, the Articles, the By-laws or otherwise to a shareholder, director, officer or auditor of the Corporation shall be sufficiently given if, (i) delivered personally to such person, (ii) mailed by prepaid mail to such person at such person’s Recorded Address, (iii) sent to such person at such person’s Recorded Address by any means of prepaid transmitted or recorded communication, or (iv) provided as an Electronic Document to the Information System of that person.

          A notice which is delivered personally is deemed to be given when received. A notice which is mailed is deemed to have been given on the third day after the notice is deposited in a post office or public letter box. A notice sent by any means transmitted or recorded communication or provided as an Electronic Document shall be deemed to have been sent when dispatched by the Corporation if it uses its own facilities or Information System and otherwise, when delivered to the appropriate communication company or its representatives for dispatch.

          The secretary may change, or cause to be changed, the Recorded Address, including the Information System of any shareholder, director, officer or auditor in accordance with any information believed by the secretary to be reliable.

          A certificate of any officer, in office at the time of making the certificate, or agent of the Corporation, as to the facts in relation to the giving of any notice or the publication of any notice shall be conclusive evidence thereof and shall be binding on every person entitled to receive notice thereof.

          The signature of any director or officer to any notice may be written, printed or otherwise mechanically reproduced.

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Section 13.2     Notice by Electronic Document.

          A requirement under the Act or this By-law to provide a person with a notice, document or other information is not satisfied by the provision of an Electronic Document unless:

(a)	the addressee has consented, in the manner prescribed under the Act, and has designated an Information System for the receipt of the Electronic Document;
(b)	the Electronic Document is provided to the designated Information System, unless otherwise prescribed in the Act;
(c)	the Act has been complied with;
(d)	the information in the Electronic Document is accessible by the sender so as to be usable for subsequent reference; and
(e)	the information in the Electronic Document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference.

          An addressee may revoke consent to receive Electronic Documents in the manner prescribed in the Act.

          A requirement under the Act for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the Electronic Document. A requirement under the Act to provide a document by registered mail is not satisfied by the sending of an Electronic Document unless prescribed under the Act.

Section 13.3     Signatures by Electronic Document.

          A requirement under the Act for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an Electronic Document, the requirements prescribed under the Act are met and if the signature results from the application by a person of technology or a process that permits the following to be proven:

(a)	the signature resulting from the use by a person of the technology or process is unique to the person;
(b)	the technology or process is used by a person to incorporate, attach or associate the person’s signature to the Electronic Document; and
(c)	the technology or process can be used to identify the person using the technology or process.

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Section 13.4     Notice to Joint Shareholders.

          If two or more persons are registered as joint holders of any share, any notice may be addressed to all such joint holders, but notice addressed to one of those persons shall be sufficient notice to all such persons.

Section 13.5     Computation of Time.

          In computing the period of days when notice must be given under any section of this By-law requiring a specified number of days’ notice of any meeting or other event, the period shall commence on the day following the sending of such notice and shall terminate at midnight of the last day of the period, except that if the last day of the period falls on a non-business day, the period shall terminate at midnight on the day next following that is not a non-business day.

Section 13.6     Undelivered Notices.

          If any notice given to a shareholder pursuant to Section 4.5 is returned on three consecutive occasions because the shareholder cannot be found, the Corporation shall not be required to give any further notices to that shareholder until the Corporation is informed in writing of the shareholder’s new address.

Section 13.7     Omissions and Errors.

          The accidental omission to give any notice to any shareholder, director or officer, auditor or the non-receipt of any notice by any such person or any error in any notice not affecting the substance of the notice shall not invalidate any action taken at any meeting held pursuant to the notice, or otherwise founded thereon.

ARTICLE 14
MISCELLANEOUS

Section 14.1     Conflict Rule.

          This By-law is made pursuant to and should be read in conjunction with the Act. If there is any conflict between this By-law or the Articles and the Act, the Act shall govern. If there is any conflict between this By-law and the Articles, the Articles shall govern.

Section 14.2     Execution of Instruments.

          Contracts, deeds, transfers, assignments, obligations, certificates, discharges and other instruments may be signed on behalf of the Corporation by the president, the chief financial officer, the secretary or the assistant secretary. In addition, the Board may, from time to time, direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same.

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Section 14.3     Banking Arrangements

          The banking business of the Corporation including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations as may from time to time be designated by the Board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the Board may prescribe.

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CERTIFICATE

CERTIFIED TRUE COPY of By-Law No. 2003-1 of MICROCELL TELECOMMUNICATIONS INC., which by-law is still in force, without modification at the date of the present certificate.

SIGNED, in Montreal, May 1, 2003.

Jocelyn Côté, Vice-President Legal Affairs

23 EX-2.1 5 m10142orexv2w1.htm EX-2.1

Exhibit 2.1

MICROCELL TELECOMMUNICATIONS INC.

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Trustee

UNIT INDENTURE

PROVIDING FOR THE ISSUE OF FIRST UNITS
DUE MAY 1, 2013

Dated May 30, 2003

STIKEMAN ELLIOTT LLP

FIRST NOTE INDENTURE

        THIS INDENTURE made this 30^th day of May 2003 among MICROCELL TELECOMMUNICATIONS INC., a corporation incorporated under the Canada Business Corporations Act (the “Corporation”) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (the “Trustee”).

        WHEREAS Microcell Telecommunications Inc. (now known as 2861399 Canada Inc.), a predecessor corporation to the Corporation, received the sanction of the Superior Court of the Province of Quebec on March 18, 2003 in respect of a plan of reorganization and of compromise and arrangement filed under the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act in respect of such predecessor corporation and certain of its subsidiaries ( the “Plan”);

        WHEREAS the articles of the Corporation provide, in accordance with the provisions of the Plan, for the Corporation’s right to redeem First Preferred Shares in the capital of the Corporation for Units (as herein defined);

        WHEREAS for such purpose, the Corporation deems it necessary to create and issue Units in the manner provided herein;

        WHEREAS each Unit shall be comprised of a Note (as herein defined) and a First Preferred Voting 2 Share (in the case of a Voting Unit) or First Preferred Non-Voting 2 Share (in the case of a Non-Voting Unit), as the case may be, of the Corporation;

        WHEREAS each Unit shall constitute in all respects one instrument and shall be evidenced by one certificate evidencing the Note and the First Preferred Voting 2 Share or First Preferred Non-Voting 2 Share, as the case may be, comprised therein, which shall not be detachable and shall not be traded separately;

        WHEREAS the Corporation is duly authorized to create and issue the Units to be issued as provided herein;

        WHEREAS the foregoing recitals are made as representations and statements of fact by the Corporation and not by the Trustee; and

        WHEREAS the Trustee has agreed to enter into the Indenture and to hold all rights, interest and benefits contained herein for and on behalf of those persons who from time to time become holders of Units issued pursuant to the Indenture.

        NOW THEREFORE THIS INDENTURE WITNESSETH and it is hereby covenanted, agreed and declared as follows:

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ARTICLE 1
INTERPRETATION

Section     1.1  Definitions.

          In this Indenture, unless there is something in the subject matter or context inconsistent therewith:

“Accretion Amount” means, as at any particular date, the amount of interest accrued on a Note equal to the product obtained by the multiplication of (X) 0.045 by (Y) the Redemption Price as at the end of the immediately preceding semi-annual period (as calculated from time to time);

“Adjustment Period” has the meaning ascribed thereto in Section 7.1(3);

“Articles” means the articles of incorporation of the Corporation, as amended from time to time;

“Average Common Share Price” means, as at any particular date, the weighted average trading price per share on the TSX (or if not listed on the TSX, on any other Recognized Exchange on which such shares are traded) of the Class A Shares and Class B Shares during the twenty (20) consecutive trading days ending five (5) trading days prior to such date;

“Business Day” means a day, other than Saturday, Sunday or a statutory holiday, on which banks are generally open for business in Montreal, Quebec, Toronto, Ontario and New York, New York;

“Canadian” means a Canadian within the meaning ascribed to such term in the Canadian Telecommunications Common Carrier Ownership and Control Regulations SOR/94-667 enacted pursuant to the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time;

“Canadian Ownership and Control Provisions” means Canadian ownership and control provisions established in the Telecommunications Act (Canada) and the Radiocommunication Act (Canada) and regulations thereunder;

“Certificate of the Corporation” means a certificate signed in the name of the Corporation by either one of the President and Chief Executive Officer of the Corporation or the Chief Financial Officer of the Corporation, and may consist of one or more instruments so executed;

“Civil Code” means the Civil Code of Quebec which came into force on January 1, 1994 as amended or supplemented from time to time, together with any regulations thereunder;

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“Class A Shares” means the Class A Restricted Voting Shares in the capital of the Corporation.

“Class B Shares” means the Class B Non-Voting Shares in the capital of the Corporation.

“Corporation” means Microcell Telecommunications Inc. and includes any successor corporation to or of it which shall have complied with the provisions of Article 12;

“Counsel” means legal counsel(s) retained by the Trustee or retained by the Corporation and acceptable to the Trustee;

“Credit Facilities” means, collectively, the credit agreements governing the Tranche A Exit Facility, Tranche B Debt and Tranche C Loan, as amended, restated or supplemented from time to time;

“Current Market Price” means the closing trading prices per share of Class A Shares and Class B Shares, respectively, on any particular date (and if such date is not a Business Day, the last Business Day before such date);

“Date of Conversion” has the meaning ascribed thereto in Section 4.2(2);

“Director” means a director of the Corporation and reference to action by the Directors means action by the directors as a board or, whenever duly empowered, action by a committee of the board as a committee;

“Event of Default” has the meaning ascribed thereto in Section 10.1;

“Extraordinary Resolution” has the respective meanings ascribed thereto in Section 13.12 and Section 13.15;

“First Preferred Shares” means, collectively, the First Preferred Non-Voting Shares and the First Preferred Voting Shares;

“First Preferred Non-Voting Shares” means the First Preferred Non-Voting Shares in the capital of the Corporation;

“First Preferred Voting Shares” means the First Preferred Voting Shares in the capital of the Corporation;

“Fundamental Transaction” has the meaning ascribed thereto in Section 7.1(3);

“GAAP” means generally accepted accounting principles in Canada as in effect from time to time;

“Indenture Legislation” has the meaning ascribed thereto in Section 15.1;

“Inter-Creditor Agreement” means that certain Inter-Creditor and Collateral Agency Agreement dated as of May 1, 2003 entered into between the Corporation, Solutions, JP

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Morgan Chase Bank Toronto Branch, the lenders party to each of the Tranche A Exit Facility, Tranche B Debt and Tranche C Loan and the Trustee;

“In-the-Money” means that, as of any particular trading day, the Class A Shares and Class B Shares continue to be listed and posted for trading on a Recognized Exchange and the Average Common Share Price as of such trading day is equal to or in excess of the then current Redemption Consideration.

“Maturity Date” means May 1, 2013;

“Non-Voting Shares” means First Preferred Non-Voting 2 Shares in the capital of the Corporation;

“Non-Voting Unit” means a Unit which includes a Non-Voting Share;

“Notes” means the 9% convertible unsecured junior subordinated first notes due May 1, 2013, issued hereunder as part of the Units;

“Ordinary Course Dividend” means any dividend (payable in cash or securities, property or assets of equivalent value) declared payable on the Shares in any fiscal year of the Corporation and not exceeding, on an aggregate basis, the greater of (i) 10% of the equity of the holders of the Shares at the end of the fiscal year preceding the dividend declaration date and (ii) 150% of the average amount of dividends paid on the Shares in the preceding three (3) fiscal years;

“Person” means an individual, legal person, corporation, company, cooperative, partnership, trust, unincorporated association or governmental body, and pronouns have a similarly extended meaning;

“Principal Amount” means the principal amount of the Note included in a Unit determined in accordance with Section 2.1(4);

“Recognized Exchange” means the TSX or any other “prescribed Canadian stock exchange” within the meaning of the Income Tax Act (Canada);

“Redemption Consideration” has the meaning set forth in Section 3.1(1);

“Redemption Price” means, in respect of any Unit, the Principal Amount of the Note included in such Unit, as adjusted in accordance with Subsection 3.1(3);

“Residency Declaration” means a declaration by which a Unitholder certifies that it is or is not a Canadian, in the form attached in Schedule 1.1;

“SEC” means the U.S. Securities and Exchange Commission;

“Senior Liabilities” means:

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(i)	secured indebtedness of the Corporation (other than indebtedness evidenced by the Units) whether outstanding on the date of this Indenture or thereafter created, incurred, assumed or guaranteed, for money borrowed or raised by the Corporation by whatever means (including, without limitation, by means of acceptances, debt instruments and finance leases and any liability evidenced by bonds, notes or similar instruments including outstanding subordinated perpetual debt);
(ii)	secured indebtedness of the Corporation whether outstanding on the date of this Indenture or thereafter created, incurred, assumed or guaranteed by the Corporation in connection with the acquisition by the Corporation or by others of any assets or services;
(iii)	all debts, liabilities and obligations at any time owing under any of the Tranche A Exit Facility, the Tranche B Debt and the Tranche C Loan; and
(iv)	renewals, extensions or refundings of any indebtedness referred to in (i) to (iii) of this definition;

unless in any case it is provided by the terms of the instrument creating or evidencing such indebtedness or an instrument pursuant to which such indebtedness is outstanding that such indebtedness does not rank prior in right of payment to the Notes but ranks pari passu with, or subordinate in right of payment to, the Notes;

“Share” means a Class A Share or Class B Share, as the case may be;

“Solutions” means Microcell Solutions Inc., a corporation amalgamated under the laws of Canada;

“Successor Corporation” has the meaning ascribed thereto in Section 12.1;

“TIA” means the Trust Indenture Act of 1939 (15 U.S Code 77aaa-77bbbb), as amended from time to time;

“this Indenture”, “this Trust Indenture”, “hereto”, “hereby”, “hereunder”, “hereof”, “herein” and similar expressions refer to this indenture and not to any particular Article, Section, Subsection, Paragraph, subdivision or other portion hereof, and include any and every supplemental indenture; and “supplemental indenture” and “Indenture supplemental hereto” include any and every instrument supplemental or ancillary hereto or in implementation hereof;

“Tranche A Exit Facility” means the secured revolving credit facility in the aggregate principal amount of at least $25,000,000 and not more than $75,000,000 established in favour of Solutions pursuant to a certain credit agreement dated May 1, 2003 between inter alia, Solutions and JP Morgan Chase Bank as agent, as amended, restated or

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supplemented from time to time and includes any hedging arrangements entered into by Solutions in accordance with the provisions of such credit agreement;

“Tranche B Debt” means the certain term loan to Solutions consisting of a Canadian dollar series in the principal amount of Cdn$100,000,000 and a U.S. dollar series in the principal amount of the U.S. dollar equivalent of Cdn$200,000,000 pursuant to a certain credit agreement dated May 1, 2003 between, inter alia, Solutions and JP Morgan Chase Bank as agent, as amended, restated or supplemented from time to time;

“Tranche C Loan” means the secured non-revolving term loan to Solutions in the aggregate principal amount of $50,000,000 pursuant to a certain credit agreement dated May 1, 2003 between, inter alia, Solutions and JP Morgan Chase Bank, as agent, as amended, restated or supplemented from time to time;

“Trustee” means Computershare Trust Company of Canada or any successor thereto;

“TSX” means the Toronto Stock Exchange, a division of TSX Inc. through which the senior listing operations of TSX Group Inc. are conducted;

“Unit” means a unit consisting of a Note together with one Voting Share (a Voting Unit) or one Non-Voting Share (a Non-Voting Unit), as the case may be;

“Unit Certificate” means a certificate evidencing one or more Voting Units, substantially in the form attached hereto as Schedule 2.3(A) or one or more Non-Voting Units, substantially in the form attached hereto as Schedule 2.3(B);

“Unitholders” or “Holders” means the Persons for the time being entered in the registers mentioned hereinafter as holders of Units;

“Unitholders’ Request” means an instrument signed in one or more counterparts by the Holders of not less than 25% in Principal Amount of the outstanding Notes included in the Units requesting the Trustee to take the action or proceeding specified therein;

“U.S ” means the United States of America, its territories or possessions, any state thereof or the District of Columbia collectively;

“U.S. Securities Act” means the U.S. Securities Act of 1933, as amended;

“Voting Shares” means First Preferred Voting 2 Shares in the capital of the Corporation;

“Voting Unit” means a Unit which includes a Voting Share; and

“Written Order of the Corporation”, “Written Request of the Corporation” and “Written Direction of the Corporation” mean, respectively, a written order, request or direction signed in the name of the Corporation by either of the President and Chief

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Executive Officer of the Corporation or the Chief Financial Officer of the Corporation, and may consist of one or more instruments so executed.

        Words importing the singular include the plural and vice versa and words importing the masculine gender include the feminine gender and vice versa.

Section 1.2     Meaning of “outstanding” for Certain Purposes.

        Every Unit certified and delivered by the Trustee hereunder shall be deemed to be outstanding until it shall be cancelled or delivered to the Trustee for cancellation, or a new Unit shall be issued in substitution therefore under Section 6.2, or moneys or shares for the payment thereof shall be set aside under Section 3.4 or Section 11.2, provided that:

(a)	where a new Unit has been issued in substitution for a Unit which has been mutilated, lost, stolen or destroyed, only one such Unit shall be counted for the purpose of determining the aggregate principal amount of Notes outstanding;
(b)	Units which have been partially redeemed, purchased or converted shall be deemed to be outstanding only to the extent of the unredeemed, unpurchased or unconverted part of the principal amount thereof;
(c)	for the purpose of any provision of this Indenture entitling Holders of outstanding Units to vote, sign consents, requests or other instruments, take other action or to constitute a quorum at any meeting of Holders under this Indenture, Units owned legally by the Corporation shall be disregarded, except that:

(i)	for the purpose of determining whether the Trustee shall be protected in relying on any such vote, consent, request or other instrument, other action or to constitute a quorum at any meeting of Holders, only the Units of which the Trustee has notice that they are so owned shall be so disregarded; and
(ii)	Units so owned which have been pledged in good faith other than to the Corporation shall not be so disregarded if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Units in his discretion free from the control of the Corporation.

Section 1.3  Interpretation not Affected by Headings, etc.

        The division of this Indenture into Articles, Sections, Subsections and Paragraphs, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture.

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Section 1.4     Statute References.

        Any reference in this Indenture to a statute shall be deemed to be a reference to such statute as amended, re-enacted or replaced from time to time.

Section 1.5     Monetary References.

        Except as otherwise stated, any reference in this Indenture to “Dollars”, “dollars” or the sign “$” shall be deemed to be a reference to lawful money of Canada.

Section 1.6     Day not a Business Day.

        In the event that any day on or before which any action is required to be taken or any computation is required to be made hereunder is not a Business Day, then such action or computation shall be required to be taken or made on or before the requisite time on the first Business Day thereafter.

Section 1.7     Invalidity of Provisions.

        Each of the provisions contained in this Indenture or the Units is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a Court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof.

Section 1.8     Governing Law.

        This Indenture and the Units shall be governed by and construed in accordance with the laws of the Province of Québec and the laws of Canada applicable therein and shall be treated in all respects as Québec contracts.

Section 1.9     Conflict.

        In the event there is any conflict between this Indenture and any Unit Certificate or any of the Schedules to this Indenture, the provisions of this Indenture shall govern and prevail.

Section 1.10     Incorporation by Reference of Trust Indenture Act.

        Whenever this Indenture refers to a provision of the TIA, the provisions shall be deemed incorporated by reference in and made a part of this Indenture.

        All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute and not otherwise defined herein have the meanings so assigned to them therein.

Section 1.11     Trust Provisions.

        Notwithstanding the references herein or in any Units to this Indenture as a “Trust Indenture” or to Computershare Trust Company of Canada (or its successor hereunder, if any)

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as a “Trustee” and except for any trust which may be created or constituted in Quebec for the purposes of Section 3.5, Section 8.2(c) or Section 11.2 (and only to the extent contemplated by such Section), no trust within the meaning of Chapter II of Title Six of Book Four of the Civil Code is intended to be or is created or constituted hereby. In addition, for greater certainty and subject as hereinafter in this Section provided in the case of any trust created or constituted in Quebec for the purposes of Section 3.5, Section 8.2(c) or Section 11.2, the provisions of Title Seven of Book Four of the Civil Code shall not apply to any administration by the Trustee hereunder.

        Except as otherwise expressly provided or unless the context otherwise requires, references in this Indenture to “trust” or “in trust”, and other similar wording shall only refer to any trust that shall be created or constituted for the purposes of Section 3.5, Section 8.2(c) or Section 11.2, as the case may be, which trust shall, automatically upon the delivery by the Corporation of the amount referred to in the said Section 3.5, Section 8.2(c) or Section 11.2, as the case may be, be created or constituted either under Quebec law or under the law of any other appropriate jurisdiction and, if so created or constituted in Quebec, shall be subject to the provisions of the Civil Code applicable to trusts and, if so created or constituted in another appropriate jurisdiction, shall be subject to the trust laws of such jurisdiction. The administration of any such trust shall be governed by and in accordance with the provisions hereof which, to the extent permitted by applicable law, shall supersede any provisions relating to the administration of property of others or other similar provisions of any applicable law.

ARTICLE 2
THE UNITS AND NOTES

Section 2.1     Creation and Issue of Units and Notes.

(1)	Creation of Units. A maximum number of 11,766,667 Units is hereby created and authorized for issue, issuable as Voting Units or Non-Voting Units, as the case may be.
(2)	Issuance of Units. The Corporation may issue Units to Unitholders upon any redemption of First Preferred Voting Shares or First Preferred Non-Voting Shares, as the case may be, in accordance with the provisions of the Articles. Upon any such redemption, a holder of First Preferred Voting Shares shall be issued Voting Units and a holder of First Preferred Non-Voting Shares shall be issued Non-Voting Units.
(3)	Ranking. Holders of Voting Units and Non-Voting Units shall rank pari passu in all respects.
(4)	Principal Amount of Notes. Each Voting Unit shall include one Voting Share and one Note in a principal amount (“Principal Amount”) equal to the redemption price of the First Preferred Voting Share (as determined in accordance with the Articles) in respect of which a Voting Unit is to be issued, as at the date of redemption therefor. Each Non-Voting Unit shall include one Non-Voting Share and one Note in a Principal Amount equal to the redemption price of the First Preferred Non-Voting Share (as determined in accordance with the Articles) in respect of which a Non-Voting Unit is to be issued, as at the date of redemption therefor.

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By way of example only and for greater clarity, a holder of 100 First Preferred Shares shall, upon redemption thereof, be entitled to receive 100 Units (Voting or Non-Voting, as the case may be) which Units shall include 100 Notes having in the aggregate a Principal Amount equal to the aggregate redemption price of the First Preferred Shares being redeemed together with 100 Voting Shares or Non-Voting Shares, as the case may be.

Section 2.2     Term of Units.

        Units shall be dated the date of the redemption of the First Preferred Voting Shares or First Preferred Non-Voting Shares, as the case may be, in consideration of the redemption of which Units are issued hereunder and shall mature, regardless of their date of issuance, on the Maturity Date.

Section 2.3     Form of Unit Certificates.

(1)

Form. The Unit Certificates evidencing the Voting Units and Non-Voting Units shall be substantially in the forms set out in Schedule 2.3(A) (Voting Units) and Schedule 2.3(B) (Non-Voting Units) to this Indenture with such appropriate additions, deletions, substitutions and variations as the Trustee may approve and shall bear such distinguishing letters and numbers as the Trustee may approve, such approval of the Trustee to be conclusively evidenced by its certification of the Unit Certificates.

(2)

Production. The Unit Certificates may be engraved, lithographed or printed (the expression “printed” including for purposes hereof both original typewritten material as well as mimeographed, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Corporation may determine.

Section 2.4     Signature of Unit Certificates.

(1)	Signing Officers. The Unit Certificates will be signed by one of the President, Chief Financial Officer, a Vice-President or Secretary of the Corporation or by any other individual to whom such signing authority is delegated by the Directors of the Corporation from time to time.
(2)	Signatures. The signatures of any of the officers or individuals referred to in Section 2.4(1) hereof may be manual signatures, engraved, lithographed or printed in facsimile and Unit Certificates bearing such facsimile signatures will, subject to Section 2.5 hereof, be binding on the Corporation as if they had been manually signed by such officers or individuals.
(3)	No Longer Officer. Notwithstanding that any person whose manual or facsimile signature appears on a Unit Certificate as one of the officers or individuals referred to in Section 2.4(1) hereof no longer holds the same or any other office with the Corporation at the date of issue of any Unit Certificate or at the date of certification or delivery thereof, such Unit Certificate will, subject to Section 2.5 hereof, be valid and binding on the Corporation.

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Section 2.5     Certification by Trustee.

(1)

Certification. No Unit Certificate shall be issued or, if issued, shall entitle the Holder thereof to the benefits of this Indenture until it has been certified by manual signature by or on behalf of the Trustee. Such certificate on any Unit Certificate shall be conclusive evidence that the Units evidenced thereby are duly issued and are valid obligations of the Corporation. Unit Certificates may forthwith and from time to time be executed by the Corporation and delivered to the Trustee and shall be certified by the Trustee and delivered pursuant to a Written Order of the Corporation, without the Trustee receiving any consideration therefore.

(2)

No Representation or Warranty. The certificate of the Trustee on any Unit Certificates shall not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or of the Units evidenced thereby (except the due certification thereof) and the Trustee shall in no respect be liable or answerable for the use made of the Unit Certificates or any of them or the proceeds thereof.

Section 2.6     Notes and Shares not Detachable.

(1)	Composition. A Voting Unit shall consist of one Note together with one Voting Share and a Non-Voting Unit shall consist of one Note together with one Non-Voting Share.
(2)	Notes and Shares as One Instrument. The Notes and the Voting Shares or Non-Voting Shares, as the case may be, included in the Units shall not be split, combined, exchanged or transferred separately from the Units of which they form part and shall be evidenced by the Unit Certificate in respect of such Units.

Section 2.7     Units to Rank Equally.

        Each Unit, as soon as it is issued shall, subject to the terms hereof, be equally and rateably entitled to the benefits hereof as if all the Units had been issued and negotiated simultaneously.

Section 2.8     Interest on Notes.

        Each Note shall bear interest from and including the date of issuance of the Unit of which it forms part hereunder at the rate of 9% per annum. No accrued interest shall be payable on the Notes, other than upon redemption or at maturity of the Units of which it forms part, and shall instead be part of an adjustment to the Redemption Price as provided in Section 3.1(3).

Section 2.9     Payments in Respect of Units.

(1) Payment by Cheque. Payments on the Units, if any, shall be made by cheque (less any tax required by law to be deducted) payable to the order of the Holder and negotiable at par and forwarded to such Holder, by first class mail, postage prepaid (or in the event of mail service interruption, by such other means as the Trustee and the Corporation shall determine to be appropriate) to the Holder at his last address appearing on the

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appropriate register of Holders. The forwarding of such cheque shall satisfy and discharge the liability of the Corporation to the extent of the sum represented thereby (plus the amount of any tax deducted as aforesaid) unless such cheque is not paid on presentation. In the event that such cheque is not received by the Holder or is lost or destroyed prior to being cashed, the Corporation (or the Trustee at the request of the Corporation), upon being furnished with evidence of non-receipt, loss or destruction and indemnity reasonably satisfactory to it, shall issue or cause to be issued to such Holder a replacement cheque for the amount of such cheque.

(2)

Registered in More than One Name. Where Units are registered in more than one name, payments in respect of such Units shall be paid by cheque payable to the order of all such Holders, unless the Corporation has received written instructions from them to the contrary, and the receipt of any one of such Holders therefor shall be a valid receipt on behalf of the Holders with respect thereto and shall discharge the Trustee, any registrar of Units and the Corporation from their obligations with respect thereto.

ARTICLE 3
REDEMPTION

Section 3.1     Redemption.

        The Units may be, or will be, redeemed in the following circumstances, provided that, for greater certainty, a redemption of Units hereunder means and refers to the redemption of the Notes included in such Units in accordance with the terms of this Article 3 and to the concurrent redemption of the Voting Shares or Non-Voting Shares, as the case may be, included in such Units redeemed in accordance with the Articles:

(1)

At the option of the Corporation. Subject to Article 5, a Unit may be redeemed, in whole or in part, at any time prior to the Maturity Date, at the option of the Corporation, at a price equal to the sum of (i) the then current Redemption Price of the Note included in such Unit, as adjusted in accordance with Section 3.1(3) and (ii) the redemption price of the First Preferred Share included in such Unit determined in accordance with the Articles (collectively, the “Redemption Consideration”), payable in cash, provided however that the Holder thereof may be entitled to exercise the conversion rights attached to such Unit as set forth in Article 4 prior to such redemption, by way of an instrument given in accordance with Article 4 within 20 days of receipt of the notice of redemption provided in Section 3.6.

(2)

Mandatorily. A Unit shall be redeemed mandatorily:

(a) at the Maturity Date (i) at a price equal to the then current Redemption Consideration, payable in cash; or (ii) at the option of the Corporation, if the Class A Shares and the Class B Shares are then listed and posted for trading on a Recognized Exchange, into such number of Class A Shares (in the case of Voting Units) or Class B Shares (in the case of Non-Voting Units) as is equal to the quotient obtained by dividing the then current Redemption Consideration by the Average Common Share Price; and

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(b) at any time, in whole or in part, to the extent that the Corporation has monies available for such purpose in accordance with the provisions of Article 5.

(3) Adjustment to Redemption Price. On November 1^st and May 1^st of every year, starting on the first November 1^st following the issue of Units hereunder, the Redemption Price shall be increased by an amount equal to the Accretion Amount. In the event of any redemption or conversion of Units other than as at such dates, the Accretion Amount shall be adjusted on a pro rata basis with reference to the number of days from the date of the last increase of the Redemption Price.

Section 3.2     Partial Redemption of Units.

(1)	Notice to Trustee. If less than all the Units are to be redeemed, the Corporation shall in each such case, at least 15 days before the date upon which a notice of redemption is to be given, notify the Trustee by Written Direction of the Corporation of its intention to redeem Units and of the aggregate principal amount of Units to be redeemed.
(2)	Pro Rata Redemption. If less than all the Units are to be redeemed, the Units shall be redeemed on a pro rata basis based on the Principal Amount of the Notes comprised therein.
(3)	Unit Certificate. The Holder of a Unit called for redemption in part only, upon surrender of the Unit Certificate representing such Unit for payment, shall be entitled to receive, without expense to such Holder, a Unit Certificate evidencing the new Principal Amount of the Note comprised in such Unit, being an amount equal to the then current Redemption Price as at the redemption of such Unit less the amount of the payment made to the Holder on account of the partial redemption, and the Corporation shall execute and the Trustee shall certify and deliver, at the expense of the Corporation, such Unit Certificate upon receipt of the Unit Certificate representing the Unit so surrendered.

Section 3.3     Units Due on Redemption Dates.

(1)

Units Due on Redemption Dates. Subject to Section 3.2(3), Units called for redemption shall thereupon become due and payable on the redemption date specified in the notice provided pursuant to Section 3.6, in the same manner and with the same effect as if it were the Maturity Date, notwithstanding anything contained herein to the contrary, and from and after such redemption date, if the moneys or Class A Shares or Class B Shares, as the case may be, necessary to redeem such Units shall have been deposited as hereinafter provided and affidavits or other proof satisfactory to the Trustee as to the mailing of such notices shall have been delivered to it, such Units shall not be considered as outstanding hereunder.

(2)

Decision of Trustee Final. If any question shall arise as to whether notice of redemption or deposit of the redemption monies or Class A Shares or Class B Shares, as the case may be, has been given or made as provided above, such question shall be decided by the Trustee whose decision shall be final and binding upon all parties in interest.

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Section 3.4     Deposit of Redemption Amounts

        Upon Units having been called for redemption in accordance with this Article 3, the Corporation shall deposit with the Trustee, prior to the redemption date fixed in the relevant notice of redemption, the sums payable upon redemption, or Class A Shares or Class B Shares, as the case may be, in respect of the Units to be redeemed, together with a sum sufficient to satisfy estimated charges and expenses which may be incurred by the Trustee in connection with such redemption. From the sums or shares so deposited, the Trustee shall deliver or cause to be delivered to the Holders, upon surrender of the Units called for redemption, the sums or shares to which they are respectively entitled on redemption.

Section 3.5     Failure to Surrender Units Called for Redemption.

        If a Holder of any Units called for redemption shall, within 30 days from the date fixed for redemption, fail to surrender the Unit Certificates in respect of such Units or shall not within such time accept delivery of the sums payable or shares issuable in respect thereof or give such receipt therefor, if any, as the Trustee may require, such sums or shares shall be set aside in trust for such Holder, in accordance with Article 15, and such setting aside shall for all purposes be deemed a payment to the Unitholder of the sum, Class A Shares or Class B Shares, as the case may be, so set aside, and the Units shall thereafter not be considered as outstanding hereunder and the Unitholder shall have no right except to receive such sums or certificates representing the Class A Shares or Class B Shares, as the case may be, or, in the event of a partial redemption only, a Unit Certificate issued in accordance with Section 3.2(3), upon surrender of his Unit Certificates, without interest thereon.

Section 3.6     General Requirements.

(1)	Notice.
	Notice of intention to redeem any Units shall be given by or on behalf of the Corporation to the Unitholders which are to be redeemed, not more than 60 days and not less than 30 days prior to the date fixed for redemption, in the manner provided in Article 14.
(2)	Content of Notice. The notice to the Unitholders to be given by the Corporation shall:

(a)	state that the Corporation has exercised its option to redeem Units pursuant to Section 3.1(1) or that Units are subject to mandatory redemption pursuant to Section 3.1(2);
(b)	state if the Units are to be redeemed in whole or in part, and shall specify the redemption date, the Redemption Consideration or, if in part only, that part of the then current Redemption Consideration payable in respect of the Units to be redeemed, and places of payment and shall state that all interest on the Units called for redemption shall cease to accrue from and after such redemption date;
(c)	in the event of a mandatory redemption at the Maturity Date, state that the Corporation has exercised its option to pay the aggregate principal amount

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	payable to the Unitholders, (i) in cash or (ii) by the issuance of Class A Shares or Class B Shares, as the case may be, to the Unitholders;
(d)	state that to receive the consideration payable upon redemption, the Unitholders must surrender their Unit Certificates to the Trustee at its principal corporate actions offices in the city of Toronto;
(e)	in the case of a redemption in consideration of the issuance of Class A Shares or Class B Shares, advise each Unitholders that the Class A Shares or Class B Shares, as the case may be, to be issued in respect of such Unitholder’s Units will be registered in the name of the Holder unless the Trustee, or its agent, receives from such Holder, on or before the tenth Business Day prior to the Maturity Date at the corporate actions trust office of the Trustee in Toronto, written notice in form and execution satisfactory to the Trustee directing the Corporation to register such Class A Shares or Class B Shares in some other name or names and stating such name or names (with addresses); and
(f)	advise each Holder that such Holder may, on or after the Maturity Date, and on proof of identity satisfactory to the Trustee, take personal delivery of a certified cheque issued to such Holder representing the Redemption Consideration (or, if a partial redemption, the sums payable on account of the partial redemption) or the share certificates representing that Holder’s Class A Shares or Class B Shares to be issued, as the case may be, at the corporate actions trust office of the Trustee in Toronto.

(3) Delivery of Certificates. Upon any redemption of Units hereunder, the Corporation will:

(a)

cause to be sent to each Holder in respect of which Units have been surrendered in accordance with the requirements of the notice given pursuant to Section 3.6(1), at the address of the Holder as shown on the records of the Corporation, by prepaid ordinary insured mail (or in the event of mail service interruption by such other means as the Trustee and the Corporation will determine to be appropriate) a certified cheque issued to such Holder representing the sums payable upon redemption or share certificates for Class A Shares or Class B Shares, as the case may be, in the name of such Holder or, if the Trustee has received the written notice and any payment contemplated by Section 3.6(2)(e) in the name of such other Person or Persons as are identified in such written notice; or

(b)

make available for personal delivery, on proof of identity satisfactory to the Trustee, a certified cheque issued to such Holder representing the sums payable upon redemption or share certificates for Class A Shares or Class B Shares, as the case may be, in the name of such Holder or, if the Trustee has received the written notice and any payment contemplated by Section 3.6(2)(e) in the name of such other Person or Persons as are identified in such written notice.

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Section 3.7     No Requirement to Issue Fractional Shares.

        The Corporation shall not be required to issue fractional Class A Shares or Class B Shares pursuant to this Article 3. If any fractional interest in a Class A Share or a Class B Share would, except for the provisions of this Section 3.7, be deliverable upon any redemption of Units, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the registered holder of such shares an amount in lawful money of Canada equal (computed to the nearest cent) to an identical fraction of the Average Common Share Price on the applicable redemption date.

Section 3.8     Cancellation of Unit Certificates.

        Subject to Section 3.2(3), all Unit Certificates in respect of Units redeemed hereunder shall forthwith be delivered to the Trustee and shall be cancelled by it and no Unit Certificates shall be issued in substitution therefore.

ARTICLE 4
CONVERSION

Section 4.1     Conversion Rights

The Units may be, or will be, converted in the following circumstances, provided that, for greater certainty, a conversion of Units hereunder means and refers to the conversion of the Notes included in such Units in accordance with the terms of this Article 4 and to the concurrent redemption of the Voting Shares or Non-Voting Shares, as the case may be, included in such Units redeemed in accordance with the Articles:

(a)	at any time and from time to time, at the option of the Holder, a Note included in a Unit may be converted into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit);
(b)	if at any time prior to May 1, 2008, the Corporation shall complete an offering of Class A Shares and/or Class B Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the then current Redemption Consideration and the proceeds thereof are used as provided in Article 5, then a Note included in a Unit which remains outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time thereafter, into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit);
(c)	at any time on or after May 1, 2008, if, on the 25th day (or if such day is not a trading day, then on the next following trading day) after the date of the press release of the Corporation announcing its quarterly or annual financial results, as the case may be, the Units are In-the-Money, each Note included in a Unit will automatically be converted, by way of notice given pursuant to Section 4.2(2), into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit); and

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(d) a Non-Voting Unit may be converted into one Voting Unit and a Voting Unit may be converted into one Non-Voting Unit, at the option of the Holder, exercisable at any time, upon compliance with the provisions of Subsection 4.2(1) and, in the case of a Holder of Non-Voting Unit, by also submitting a duly executed and completed Residency Declaration of the Holder whereby such Holder attests that he is a Canadian.

Section 4.2     Manner of Exercise of Right to Convert.

(1)	Conversion by Holder. The Holder of a Unit wishing to convert such Unit in whole or in part into Class A Shares or Class B Shares, as the case may be, pursuant to Section 4.1(a) or Section 4.1(d), shall surrender its Unit Certificate to the Trustee, at the corporate actions trust office of the Trustee in Toronto with the conversion form appearing thereon or appended thereto duly executed by the Holder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in form and substance satisfactory to the Trustee, irrevocably exercising his right to convert such Unit in accordance with the provisions of this Article 4 (and, in the case of a Holder of a Non-Voting Unit exercising a conversion right pursuant to Section 4.1(d), accompanied by a duly executed and completed Residency Declaration attesting that such Holder is a Canadian). Thereupon such Unitholder or, subject to compliance with all reasonable requirements of the Trustee, his nominee or assignee shall be entitled to be entered in the records of the Corporation as at the Date of Conversion (as defined in Section 4.2(2)) (or such later date as is specified in Section 4.2(2)) as the holder of the number of Class A Shares or Class B Shares, as the case may be, into which such Unit is convertible in accordance with the provisions hereof and, as soon as practicable thereafter, the Corporation shall deliver to such Unitholder or, subject as aforesaid, his nominee or assignee, a certificate for such Class A Shares or Class B Shares, as the case may be.
(2)	Notice by Corporation. The Corporation shall notify the Trustee by Written Direction of the Corporation immediately after a determination by the Corporation that the Notes included in the Units are convertible pursuant to Section 4.1(b) or Section 4.1(c). Notice of intention to convert any Notes included in the Units shall be provided by the Corporation to the Unitholders concurrently with such Written Direction of the Corporation to the Trustee, in the manner set forth in Article 14.
(3)	Deemed Surrender. For the purposes hereof, a Unit shall be deemed to be surrendered for conversion on the date (the “Date of Conversion”) on which it is so surrendered in accordance with the provisions hereof and, in the case of a Unit so surrendered by mail or other means of delivery, on the date on which the Unit Certificate is received by the Trustee at the corporate actions trust office of the Trustee in Toronto, provided that if a Unit is surrendered for conversion on a day on which the register of Class A Shares or Class B Shares is closed, the Person entitled to receive Class A Shares or Class B Shares shall become the holder of record of such Class A Shares or Class B Shares as at the date on which such register is next reopened and provided that if a Unit is surrendered for conversion on the date of redemption of any Unit or during the 10 preceding Business

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	Days, such Unit shall be deemed to be surrendered for conversion on the redemption date.
(4)	Partial Conversion. The Holder of any Units of which part only is converted shall, upon the exercise of its right of conversion, surrender its Unit Certificate(s) to the Trustee, and the Trustee shall cancel the same and shall, without charge, forthwith certify and deliver to the Holder new Unit Certificate(s) representing a number of Units equal to the unconverted part of the Units so surrendered.
(5)	No Right to Receive Accrued and Unpaid Interest. The Holder of Units surrendered for conversion in accordance with this Section 4.2 shall not be entitled to any payment on account of the Redemption Consideration or of interest.
(6)	Right to Receive Dividends. The holders of Class A Shares and Class B Shares issued upon conversion shall be entitled to receive dividends in respect thereof only if such dividends are declared in favour of holders of record of Class A Shares and Class B Shares on and after the Date of Conversion or such later date as such Holder shall become the holder of record of such Class A Shares and Class B Shares pursuant to Section 4.2(2), from which applicable date they will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Class A Shares and Class B Shares.

Section 4.3     Corporation to Reserve Shares.

        The Corporation covenants that it will at all times reserve and keep available out of its authorized Class A Shares and Class B Shares (if the number thereof is or becomes limited) solely for the purpose of issue upon conversion of Units as provided herein, and issue to Holders of Units who may exercise their conversion rights hereunder, such number of Class A or Class B Shares as shall then be issuable upon the conversion of all outstanding Units. All Class A Shares and Class B Shares which shall be so issuable shall be duly and validly issued as fully paid and non-assessable.

Section 4.4     Taxes and Charges on Conversion.

        The Corporation will from time to time promptly pay or make provision satisfactory to the Trustee for the payment of all taxes and charges which may be imposed by the laws of Canada or any province thereof (except income tax or security transfer tax, if any) which shall be payable with respect to the issuance or delivery of Class A Shares and Class B Shares to the Holders of Units upon the exercise of their right of conversion pursuant to the terms of the Units and of this Indenture.

Section 4.5     Cancellation of Converted Units.

        All Unit Certificates representing Units converted in whole or in part shall be forthwith delivered to and cancelled by the Trustee and, subject to Section 4.2(4), no Unit Certificates shall be issued in substitution therefor.

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Section 4.6     Notice of Expiry of Conversion Right.

        The Corporation covenants that, so long as any Units remain outstanding, it will give notice to the Trustee and the Unitholders in the manner provided in Article 14, not less than 21 days prior to a date fixed for redemption of Units, of the expiry of the right of the Unitholders to convert their Units.

Section 4.7     Revival of Right to Convert.

        If the Corporation shall fail to redeem any Units which has been called for redemption upon due surrender of such Units, any right to convert such Units as provided in this Article 4 shall revive and continue as if such Units had not been called for redemption.

Section 4.8     No Requirement to Issue Fractional Shares.

        The Corporation shall not be required to issue fractional Class A Shares or Class B Shares pursuant to this Article 4. If any fractional interest in a Class A Share or a Class B Share would, except for the provisions of this Section 4.8, be deliverable upon any conversion of Units, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the registered holder of such shares an amount in lawful money of Canada equal (computed to the nearest cent) to an identical fraction of the Average Common Share Price on the applicable Date of Conversion.

Section 4.9     Conversion subject to U.S. Securities Act Requirements

        All conversion rights provided for in this Article 4 are subject to a registration statement having been filed by the Corporation and having been declared effective by the SEC under the U.S. Securities Act or an exemption being available under the U.S. Securities Act in connection with the issuance of Shares resulting from the exercise of such conversion rights.

ARTICLE 5
CERTAIN RESTRICTION ON INTEREST PAYMENTS AND REDEMPTION

Section 5.1     Incorporation of Inter-Creditor Agreement by reference

        For purposes of this Section 5.1, terms with a capitalized first letter not otherwise defined in this Indenture shall have the meaning ascribed thereto in the Inter-Creditor Agreement.

        Section 2.2 of the Inter-Creditor Agreement provides for certain payments to be made on account of redemption of Units if there is Excess Cash Flow in any fiscal year of the Corporation, if the Corporation receives Net Proceeds from an Asset Disposition, or if the Corporation receives Net Proceeds from the issuance of Equity Securities. The Corporation hereby covenants to comply with its obligations under the Inter-Creditor Agreement (including all payments to be made thereunder).

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ARTICLE 6
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF UNITS

Section 6.1     Registration and Transfer of Units.

(1)	Register. The Corporation shall cause to be kept by the Trustee and at the corporate actions trust office of the Trustee in Toronto a central register and in such other place or places, or by such other registrar or registrars, if any, as the Corporation with the approval of the Trustee may designate, branch registers, in which shall be entered the names and latest known addresses of the Holders of Units, the particulars of all transfers of Units and such other particulars of the Units, as may be prescribed by law. Such registration shall be noted on the Units by the Trustee or other registrar.
(2)	Inspection of registers. The registers referred to in this Section 6.1 shall at all reasonable times be open for inspection by the Corporation, the Trustee and any Unitholders.
(3)	Transfer. No transfer of Units shall be effective as against the Corporation unless made on one of the registers by the Unitholder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in form and execution satisfactory to the Trustee and upon compliance with such requirements as the Trustee or other registrar may prescribe, and unless such transfer shall have been duly noted on such Units by the Trustee or the registrar. The Unitholders may at any time and from time to time have such Units transferred at any of the places at which a register is kept pursuant to the provisions of this Section 6.1 in accordance with such reasonable regulations as the Trustee may prescribe. The Unitholder may at any time and from time to time have the registration of its Units transferred from the register in which the registration thereof appears to another register maintained in another place authorized for that purpose under the provision of this Indenture upon payment of a reasonable fee to be fixed by the Trustee.
(4)	No Notice of Trusts. Neither the Corporation, nor the Trustee, nor any registrar shall be bound to take notice of or to see to the execution of any trust, whether express, implied or constructive, in respect of any Units and the Trustee and any registrar may transfer any Units on the direction of the Holder thereof, whether named as Trustee or otherwise, as though that Person were the beneficial owner thereof.
(5)	Location of Registers. Except in the case of the central register required to be kept at the corporate actions trust office of the Trustee in Toronto, the Corporation shall have power at any time to close any branch register, in which event it shall transfer the records thereof to another existing register or to a new register, and thereafter such Units shall be deemed to be registered on such existing or new register, as the case may be. In the event that the register in any place is closed and the records transferred to a register in another place, notice of such change shall be given to the Holders of the Units registered in the register so closed and the particulars of such change shall be recorded in the central register required to be kept at the corporate actions trust office of the Trustee in Toronto.

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(6) List of Unitholders. Every registrar shall, when requested to do so by the Corporation or the Trustee, furnish the Corporation or the Trustee, as the case may be, with a list of the names and addresses of the Unitholders showing the serial numbers of Units held by each Holder.

Section 6.2     Exchange of Units.

(1)	Exchange and Place of Exchange. Unit Certificate(s) may be exchanged for one or more Unit Certificate(s) of different denomination or denominations evidencing in the aggregate the same number of Units as the Unit Certificate(s) being exchanged.
(2)	Place of Exchange. Exchanges of Units may be made at the corporate actions trust office of the Trustee in Toronto. Any Unit certificates tendered for exchange shall be surrendered to the Trustee and shall be cancelled. The Corporation shall execute, and the Trustee shall certify, all Unit Certificates necessary to carry out such exchanges.
(3)	Redemption. Units issued in exchange for Units which at the time of such issue have been selected or called for redemption at a later date shall be deemed to have been selected or called for redemption in the same manner as the Units for which they were exchanged and, upon issuance of such Units the Trustee shall note thereon a statement to that effect.
(4)	Fees. Except as otherwise provided herein, upon any exchange of Units, the Trustee or other registrar of Units may charge the Holder or the transferor such reasonable fee as may be necessary to discharge any stamp tax, security transfer tax or other governmental charge required to be paid and payment of such charges shall be made by the party requesting such exchange or transfer as a condition precedent thereto.
(5)	No Exchange. Neither the Corporation, the Trustee nor any other registrar of Units shall be required to exchange any Units on the day of any selection by the Trustee of any Units to be redeemed.

Section 6.3     Ownership of Units.

(1)

Deemed Ownership. The Unitholders shall be deemed to be the owner thereof for all purposes of this Indenture and payment of or on account of the principal of, and interest on, the Notes shall be made only to or upon the order in writing of the Holder of the Units and such payment shall be complete satisfaction for the amounts so paid and discharge to the Trustee, any registrar of Units and the Corporation for the amounts so paid.

(2)

No Compensation or Set-off. The Holder of any Units shall be entitled to payments thereon, free from all rights of compensation, set-off or counterclaim between the Corporation and any prior Holder and all Persons may act accordingly. A transferee of a Unit shall, upon compliance with all of the requirements for the transfer of Units set out in this Indenture, in the Units or established by the Trustee or the Corporation pursuant thereto and any other requirements of law with respect to such transfer, be entitled to be entered on the appropriate register or on any one of the appropriate

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registers as the owner of such Units, free from all rights of compensation, set-off or counterclaim between the Corporation and the transferor or any previous Holder thereof.

Section 6.4     Issue in Substitution for Lost Certificates.

(1)

Substitution. If any Unit Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to Section 6.4(2) hereof, will issue, and thereupon the Trustee will certify and deliver, a new Unit Certificate of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and on surrender and cancellation of such mutilated certificate or in lieu of and in substitution for such lost, destroyed or stolen certificate.

(2)

Cost of Substitution. The applicant for the issue of a new Unit Certificate pursuant to this Section 6.4(2) will bear the reasonable cost of the issue thereof and in the case of loss, destruction or theft will, as a condition precedent to the issue thereof:

(a)	furnish to the Corporation and to the Trustee such evidence of ownership and of the loss, destruction or theft of the Unit Certificate to be replaced as is satisfactory to the Corporation and to the Trustee in its discretion, acting reasonably;
(b)	if so requested, furnish an indemnity in amount and form satisfactory to the Corporation and to the Trustee in its discretion, acting reasonably; and
(c)	pay the reasonable charges of the Corporation and the Trustee in connection therewith.

ARTICLE 7
ADJUSTMENTS

Section 7.1     Adjustments

(1)	Adjustment.
	The rights of the Unitholders, including in relation to the number of Shares issuable upon the redemption or conversion of Units, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Article, and for such purposes and as used in this Section, (i) “Adjustment Period” means the period commencing immediately after the issuance of Units hereunder and ending at the Maturity Date, and (ii) “Share Rate” means the rate at which the Shares are issuable upon the redemption or conversion of Units.
(2)	Share Rate.
	The Share Rate in effect at any date will be subject to adjustment from time to time as follows:

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(a) If and whenever at any time during the Adjustment Period, the Corporation shall:

(i)	subdivide or redivide the outstanding Shares into a greater number of Shares;
(ii)	consolidate, combine or reduce the outstanding Shares into a lesser number of Shares; or
(iii)	issue Shares to all or substantially all of the holders of Shares by way of a stock dividend or other distribution (other than an Ordinary Course Dividend),
then, in each such event, the Share Rate will, on the effective date of or the record date for such event, be adjusted by multiplying the Share Rate in effect immediately prior to such date by a fraction:
(i)	the numerator of which shall be the total number of Shares outstanding on such date after giving effect to such event; and
(ii)	the denominator of which shall be the total number of Shares outstanding on such date before giving effect to such event.
Such adjustment will be made successively whenever any such event shall occur. Any such issue of Shares by way of a stock dividend or other distribution shall be deemed to have been made on the record date for such stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under Section 7.1(2)(b) and Section 7.1(2)(c).

(b) If and whenever, at any time during the Adjustment Period, the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of Shares entitling the holders thereof, within a period expiring not more than 50 days after the record date for such issue, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such issuance, then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)	the numerator of which shall be the total number of Shares outstanding on such record date plus the total number of additional Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable); and
(ii)	the denominator of which shall be the aggregate of (A) the number of Shares outstanding on such record date and (B) a number determined by

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dividing the aggregate subscription or purchase price of the total number of additional Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by the Current Market Price as of the applicable record date.

Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon the number of Shares (or securities convertible into or exchangeable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

(c) If and whenever at any time during the Adjustment Period the Corporation shall fix a record date for the making of a distribution to all or substantially all of the holders of Shares of:

(i)	shares of any class other than Shares, whether of the Corporation or any other corporation;
(ii)	rights, options or warrants other than rights options or warrants referred to in Section 7.1(2)(b);
(iii)	evidence of indebtedness; or
(iv)	cash, securities or other property or assets (other than an Ordinary Course Dividend);
then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:
(i)	the numerator of which shall be the total number of Shares outstanding on such record date multiplied by the Current Market Price on such record date; and
(ii)	the denominator of which shall be (A) the product of the number of Shares outstanding on such record date and the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such distribution reduced by (B) the aggregate fair market value (as determined by the directors at the time such distribution is authorized) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets to be so distributed.

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Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be.

(d) In the absence of a resolution of the directors fixing a record date for any event referred to in this Section, the Corporation shall be deemed to have fixed as the record date therefor the earlier of the date on which holders of record of Shares are determined for the purpose of participating in such event and the date on which such event becomes effective.

(3) Fundamental Transactions.

(a)

If and whenever at any time during the Adjustment Period, there is (i) any reclassification of the Shares at any time outstanding or any change of the Shares into other shares, securities or property of the Corporation, or any other capital reorganization of the Corporation of similar effect, (ii) any amalgamation, arrangement, merger or other form of business combination of the Corporation with or into any other corporation resulting in any reclassification of the outstanding Shares or change of the Shares into other shares, securities or property of the Corporation or such other corporation, or (iii) any sale, lease, exchange or transfer all or substantially all of the undertaking or assets of the Corporation and/or the Subsidiaries of the Corporation to another corporation or entity not wholly-owned by the Corporation (each of the transactions contemplated in (i), (ii) and (iii), hereinafter, a “Fundamental Transaction”), then, in each such event, each Holder of a Unit which is thereafter redeemed or converted for Shares will be entitled to receive, and shall accept, in lieu of the number of Shares to which such Holder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such Holder would have been entitled to receive as a result of the Fundamental Transaction if, on the effective date thereof, such Holder had been the registered holder of the number of Shares to which such Holder was theretofore entitled upon such redemption or conversion.

If necessary as a result of any Fundamental Transaction, appropriate adjustments will be made in the application of the provisions set forth in this Section with respect to the rights and interests thereafter of the Holders to the end that the provisions set forth in this Section will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares or other

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	securities or property thereafter deliverable upon a redemption or conversion of Units for Shares. Any such adjustments will be made by and set forth in an indenture supplemental hereto approved by the Corporation and by the Trustee and shall for all purposes be conclusively deemed to be an appropriate adjustment.
(b)	Adjustments Cumulative. The adjustments provided for in this Section are cumulative.
(c)	Resolution of Questions. In the event of any question arising with respect to the adjustments provided for in this Section, such questions shall be conclusively determined by the Corporation’s auditors or, if they are unable or unwilling to act, by such firm of chartered accountants as is appointed by the Corporation and acceptable to the Trustee. Such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Trustee and the Holders.
(d)	Additional Actions. As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section, the Corporation will take any action which may, in the opinion of counsel to the Corporation be necessary in order that the Corporation, or any successor to the Corporation or successor to the undertaking or assets of the Corporation, will be obligated to and may validly and legally issue all of the Shares or other shares, securities or property which the Holders would be entitled to receive upon a redemption or conversion of Units.
(e)	Notice to Trustee. As soon as possible after the effective date of any event referred to in this Section that requires or might require an adjustment hereunder, the Corporation will notify the Trustee by Written Direction of the Corporation of the particulars of such event and, to the extent determinable, any adjustment required and the computation of such adjustment.
	The Trustee may act and rely, for all purposes, upon Written Directions of the Corporation and any other documents filed by the Corporation pursuant to this Section.
(f)	No Duty of Trustee. The Trustee:

(i)	shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist which may require any adjustment hereto or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making same;
(ii)	shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or of any other shares, securities or property which may at any time be issued or delivered upon the redemption or conversion of Units; and

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(iii) shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or share or securities certificates upon the redemption or conversion of Units.

(g) Post-Adjustment. After any adjustment pursuant to this Section, the term “Shares” where used in this Indenture shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, may be based upon a redemption or conversion of Units, and the number of Shares to be so issued shall be interpreted to mean the number of securities and other property and assets which, are issuable, as a result of such adjustment and all prior adjustments pursuant to this Section 7.1(3)(g).

ARTICLE 8
SUBORDINATION OF NOTES

Section 8.1     Agreement to Subordinate.

        The Corporation covenants and agrees, and each Unitholder, by his acceptance thereof, likewise agrees, that the payment of any sums on the Notes comprised in the Units is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all Senior Liabilities.

Section 8.2     Distribution on Insolvency or Winding-up.

        Upon any dissolution, winding-up, liquidation, reorganization or other similar proceedings relative to the Corporation or its property or assets, resulting from bankruptcy, insolvency, reorganization or receivership proceedings or upon an assignment for the benefit of creditors,

(a)

the holders of all Senior Liabilities will first be entitled to receive payment in full of the principal thereof, premium, if any, and interest due thereon, before the Unitholders are entitled to receive any payment on account of the Redemption Consideration;

(b)

any payment by, or distribution of assets of, the Corporation of any kind or character, whether in cash, property or securities (other than securities of the Corporation or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Article 8 with respect to the Notes, to the payment of all Senior Liabilities, provided that (i) the Senior Liabilities are assumed by the new corporation, if any, resulting from such reorganization or readjustment and (ii) the rights of the holders of Senior Liabilities are not altered adversely by such reorganization or readjustment), to which the Unitholders or the Trustee would be entitled except for the provisions of this Article 8, will be paid or delivered by the person making such payment or distribution, whether a trustee in bankruptcy, a receiver, a receiver-manager, a liquidator or otherwise, directly to the holders of Senior Liabilities or their representative or representatives or to the trustee or

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trustees under any indenture under which any instruments evidencing any of such Senior Liabilities may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Liabilities held or represented by each, to the extent necessary to make payment in full of all Senior Liabilities remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Liabilities; and

(c)

subject to Section 8.6, if, notwithstanding the foregoing, any payment by, or distribution of assets of, the Corporation of any kind or character, whether in cash, property or securities (other than securities of the Corporation as reorganized or readjusted or securities of the Corporation or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Article 8 with respect to the Notes, to the payment of all Senior Liabilities, provided that (i) the Senior Liabilities are assumed by the new corporation, if any, resulting from such reorganization or readjustment and (ii) the rights of the holders of Senior Liabilities are not altered adversely by such reorganization or readjustment), is received by the Trustee or the Unitholders before all Senior Liabilities are paid in full, such payment or distribution will be held in trust for the benefit of, and will be paid over to the holders of such Senior Liabilities or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Liabilities may have been issued, ratably as aforesaid, for application to the payment of all Senior Liabilities remaining unpaid until such Senior Liabilities have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Liabilities.

Section 8.3     Subrogation.

        Subject to the payment in full of all Senior Liabilities, the Unitholders shall be subrogated to the rights of the holders of Senior Liabilities to receive payments and distributions of assets of the Corporation in respect of and on account of Senior Liabilities, to the extent of the application thereto of moneys or other assets which would have been received by the Unitholders but for the provisions of this Article 8, until the Redemption Consideration shall be paid in full. No payment or distribution of assets of the Corporation to the Unitholders which would be payable or distributable to the holders of Senior Liabilities pursuant to this Article 8 shall, as between the Corporation, its creditors (other than the holders of Senior Liabilities) and the Unitholders, be deemed to be a payment by the Corporation to or on account of the Unitholders, it being understood that the provisions of this Article 8 are, and are intended, solely for the purpose of defining the relative rights of the Unitholders, on the one hand, and the holders of the Senior Liabilities, on the other hand. Nothing contained in this Article 8 or elsewhere in this Indenture or in the Units is intended to or shall impair, as between the Corporation and its creditors (other than the holders of Senior Liabilities and the Unitholders), the obligation of the Corporation, which is unconditional and absolute, to pay to the Unitholders the Redemption Consideration as and when the same shall become due and payable, or to affect the relative rights of the Unitholders and creditors of the Corporation other than the holders of the Senior Liabilities, nor shall anything herein or therein prevent the

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Trustee or the holder of any Units from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 8, of the holders of Senior Liabilities upon the exercise of any such remedy.

Section 8.4     No Payment to Unitholders if Event of Default under the Senior Liabilities.

(1)	Priority of Senior Liabilities. Upon the maturity of any Senior Liabilities by lapse of time, acceleration or otherwise, then, except as hereinafter otherwise provided in Section 8.4(4), all principal of and premium, if any, and interest on all such matured Senior Liabilities shall first be paid in full, or shall first have been duly provided for, before any payment on account of Redemption Consideration is made.
(2)	No Payment. Except as hereinafter otherwise provided in Section 8.4(4), the Corporation shall not make any payment, and the Trustee shall not be entitled to demand, institute proceedings for the collection of, or receive any payment or benefit (including without limitation by compensation, set-off, combination of accounts or otherwise in any manner whatsoever) on account of the Units (i) in a manner inconsistent with the terms (as they exist on the date hereof) of this Indenture or of the Units, or (ii) at any time when an event of default, as defined in any Senior Liabilities or any instrument evidencing the same and permitting the holders thereof to accelerate the maturity thereof, has occurred and is continuing and notice of such event of default has been given by or on behalf of the holders of Senior Liabilities to the Corporation and the Trustee, in each case unless and until the Senior Liabilities have been paid and satisfied in full or unless and until such event of default shall have been cured or waived or shall have ceased to exist.
(3)	No Default. Notwithstanding Section 10.1(a), the failure to make any payment as a result of the application of this Section 8.4 which would otherwise be required to be made to the Unitholders pursuant to this Indenture shall not constitute an Event of Default hereunder unless an event of default under the Senior Liabilities results in the acceleration thereof or unless the Corporation, upon the curing, the waiver of or the cessation of existence of such event of default, does not within a reasonable delay pay, in accordance with the terms of this Indenture, any amount due at such time on account of principal of and interest, if any, on the Notes.
(4)	Trustee May Receive Payments. For greater certainty, this Section 8.4 shall not be construed so as to prevent the Trustee from receiving and retaining any payments on account of Units which are made (i) in a manner that is consistent with the terms of this Indenture or of the Units and (ii) at any time when no event of default, as defined in any Senior Liabilities or the instrument creating the same and permitting the holders thereof to accelerate the maturity thereof, has occurred and is continuing in respect of which notice has been given by or on behalf of the holders of Senior Liabilities to the Corporation and the Trustee.

Section 8.5     Authorization of Unitholders to the Trustee to Effect Subordination.

        Each Unitholder, by its acceptance thereof, authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effect the subordination

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provided for in this Article 8 and appoints the Trustee its attorney-in-fact for any and all such purposes. Furthermore, each Unitholder, by his acceptance thereof, authorizes and directs the Trustee on his behalf, at the request of a holder of Senior Liabilities, to execute a subordination agreement in favour of such holder of Senior Liabilities.

Section 8.6     Knowledge of the Trustee.

        Notwithstanding the provisions of this Article 8, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Trustee, or the taking of any other action by the Trustee, unless and until the Trustee has received written notice thereof from the Corporation, any Unitholder or the holder or representative of any class of Senior Liabilities.

Section 8.7     Trustee May Hold Senior Liabilities.

        The Trustee is entitled to all the rights set forth in this Article 8 with respect to any Senior Liabilities at the time held by it, to the same extent as any other holder of Senior Liabilities, and nothing in this Indenture deprives the Trustee of any of its rights as such holder.

Section 8.8     Rights of Holders of Senior Liabilities Not Impaired.

        No right of any present or future holder of any Senior Liabilities to enforce the subordination herein will at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Corporation or by any non-compliance by the Corporation with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.

Section 8.9     Altering the Senior Liabilities.

        The holders of the Senior Liabilities have the right to extend, renew, modify or amend the terms of the Senior Liabilities or any security therefor and to release, sell or exchange such security and otherwise to deal freely with the Corporation, all without notice to or consent of the Unitholders and without affecting the liabilities and obligations of the parties to this Indenture or the Unitholders.

ARTICLE 9
COVENANTS OF THE CORPORATION

Section 9.1     General Covenants.

        The Corporation covenants with the Trustee for the benefit of the Trustee and the Unitholders as follows:

(1) Maintenance. The Corporation will at all times maintain its corporate existence, carry on and conduct its business, and that of its material subsidiaries, in a proper, efficient and business-like manner and keep or cause to be kept proper books of account in accordance with generally accepted accounting practice.

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(2)	Reservation of Shares. The Corporation will reserve and keep available sufficient unissued Class A Shares and Class B Shares to enable it to satisfy its obligations on the conversion or redemption of the Units.
(3)	Units and Issue of Shares. The Units shall, when countersigned and registered as herein provided, be valid and enforceable against the Corporation and, subject to the provisions of the Indenture, the Corporation will cause the Shares from time to time issued pursuant to the conversion or redemption of the Units, and the certificates representing such Shares, to be issued and delivered in accordance with the Units and the terms hereof and all Shares that are issued on conversion or redemption of the Units will be fully paid and non-assessable Shares.
(4)	Open Registers. The Corporation will cause the Trustee to keep open the registers of Holders and registers of transfers referred to in Section 6.1(1) as required by such Section and will not take any action or omit to take any action which would have the effect of preventing the Unitholders from exercising any of the Units or receiving any of the Shares upon such exercise.
(5)	Further Assurances. The Corporation will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances as the Trustee may reasonably require for better accomplishing and affecting the provisions of this Indenture.
(6)	Trustee’s Remuneration. The Corporation shall pay (and shall be responsible for the payment thereof) to the Trustee, reasonable remuneration agreed to in writing for its services hereunder and will repay to the Trustee, upon delivery of original invoices therefor, the amount of all reasonable out-of-pocket expenditures that the Trustee reasonably incurs in the execution of its obligations hereunder with respect to the Units without duplication of any amounts otherwise claimed or paid to the Trustee, including reasonable fees and disbursement reasonably incurred by counsel and all other advisors reasonably retained by the Trustee in connection herewith.
(7)	Reporting Issuer Status. The Corporation will use its reasonable commercial efforts to make all requisite filings under applicable Canadian securities legislation including those necessary to become and remain, a reporting issuer not in default in each of the provinces of Canada and those necessary to report the exercise of the right to acquire Shares pursuant to the conversion of Units.
(8)	Listing. The Corporation will use its reasonable commercial efforts to obtain and maintain the listing of the Units and the Shares on the TSX.
(9)	Registration Statement. If an exemption is not available under the U.S. Securities Act in connection with the issuance of Shares resulting from the conversion of Units pursuant to Article 4, the Corporation shall prepare and file, as soon as reasonably possible following the date on which Units are first issued hereunder, a registration statement under the U.S. Securities Act, will use its reasonable commercial efforts to have the SEC declare such registration statement effective as soon as possible thereafter and will use

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	its reasonable commercial efforts to cause such registration statement to remain effective until the Maturity Date.
(10)	Amendments to Inter-Creditor Agreement. The Corporation shall not amend or agree to amend Section 2.2 of the Inter-Creditor Agreement without the prior written consent of the Trustee; and
(11)	General Performance. The Corporation will perform and carry out all acts and things to be done by it as provided in this Indenture.

Section 9.2     To Provide Annual Certificate of Compliance.

        The Corporation covenants that on or before January 1^st of each fiscal year following the issuance of Units hereunder and at any other time if requested by the Trustee, the Corporation will furnish to the Trustee a Certificate of the Corporation stating that the Corporation has complied with all covenants, conditions and other requirements contained in this Indenture, non-compliance with which would, with the giving of notice or the lapse of time or both, constitute an Event of Default hereunder or, if such is not the case, specifying the covenant, condition or other requirement which has not been complied with and giving particulars of such non-compliance and the action, if any, the Corporation proposes to take with respect thereto.

Section 9.3     The Trustee may Perform Covenants.

        If the Corporation shall fail to perform any of its covenants contained herein, the Trustee may in its discretion, but (subject to Section 10.2) need not, notify the Unitholders of such failure or may itself perform any of such covenants capable of being performed by it and, if any such covenant requires the payment of money, it may make such payment with its own funds, or with money borrowed by it for such purpose, but shall be under no obligation to do so; and all sums so paid shall be payable by the Corporation in accordance with the provisions of Section 9.1(6). No such performance by the Trustee of any covenant contained herein or payment by the Corporation of any sums advanced or borrowed by the Trustee pursuant to the foregoing provisions shall be deemed to relieve the Corporation from any default hereunder.

ARTICLE 10
DEFAULT AND ENFORCEMENT

Section 10.1     Events of Default.

        Each of the following events is hereinafter sometimes referred to as an “Event of Default”:

(a)	if the Corporation makes default in payment of the principal of any Units when the same becomes due under any provision hereof or of such Units; or
(b)	if a decree or order of a court having jurisdiction in the premises is entered adjudging the Corporation a bankrupt or insolvent under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or analogous laws,

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	or issuing sequestration or process of execution against, or against any substantial part of, the property of the Corporation, or appointing a receiver of the Corporation or any substantial part of its property, or ordering the winding-up or liquidation of its affairs unless the Corporation actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 Business Days after the issue of such decree or order by a court; or
(c)	if an order is made or a resolution is passed for the winding-up or liquidation of the Corporation except in the course of carrying out or pursuant to a transaction in respect of which the conditions of Section 12.1 are duly observed and performed or if the Corporation institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or analogous laws, or consents to the filing of any such petition or to the appointment of a receiver of the Corporation or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any of the aforesaid purposes; or
(d)	if the Corporation makes default in observing or performing any other covenant or condition of this Indenture on its part to be observed or performed and if such default continues for a period of 30 days after notice in writing has been given to the Corporation by the Trustee specifying such default and requiring the Corporation to rectify the same, unless the Trustee (having regard to the subject matter of the default) shall have agreed to a longer period and, in such event, for the period agreed to by the Trustee; or
(e)	if an encumbrancer takes possession of all or substantially all of the property of the Corporation, or if any process of execution is levied or enforced upon or against all or substantially all of the property of the Corporation and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Corporation actively and diligently contests in good faith such process, but in that event the Corporation shall, if the Trustee so requires, give security which, in the discretion of the Trustee, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

Section 10.2     Notice of Events of Default.

(1) Notice. If an Event of Default shall occur and is continuing the Trustee shall, within 30 days after it becomes aware of the occurrence of such Event of Default, give notice thereof to the Unitholders, provided that, notwithstanding the foregoing, the Trustee shall not be required to give such notice if the Trustee in good faith shall have decided that the withholding of such notice is in the best interests of the Unitholders and shall have so advised the Corporation in writing.

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(2) Default Cured. Where notice of the occurrence of an Event of Default has been given and the Event of Default is thereafter cured, notice that the Event of Default is no longer continuing shall be given by the Trustee to the Unitholders within 15 days after the Trustee becomes aware that the Event of Default has been cured.

Section 10.3     Acceleration on Default

        If any Event of Default has occurred and is continuing, the Trustee may in its discretion, and shall upon receipt of a Unitholders’ Request by notice in writing to the Corporation declare the principal of and interest on the Notes then outstanding and any other moneys payable hereunder to be due and payable and the same shall forthwith become immediately due and payable to the Trustees, notwithstanding anything contained therein or herein to the contrary.

Section 10.4     Waiver of Default.

	If an Event of Default shall have occurred:
(a)	the Holders of more than 50% of the Units then outstanding shall have the power (in addition to the powers exercisable by Extraordinary Resolution as hereinafter provided) by instrument signed by such Holders to instruct the Trustee to waive any Event of Default hereunder and the Trustee shall thereupon waive the Event of Default and/or cancel such declaration upon such terms and conditions as such Unitholders shall prescribe; and
(b)	the Trustee, so long as it has not become bound to institute any proceedings hereunder, shall have the power to waive any Event of Default hereunder, if, in the Trustee’s opinion, the same shall have been cured or adequate satisfaction made therefor, and in such event to cancel any such declaration theretofore made by the Trustee in the exercise of its discretion, upon such terms and conditions as the Trustee may consider advisable;

provided that no delay or omission of the Trustee or of the Unitholders to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein and provided further that no act or omission either of the Trustee or of the Unitholders shall extend to or be taken in any manner whatsoever to affect any subsequent Event of Default hereunder or the rights resulting therefrom.

Section 10.5     Enforcement by the Trustee.

        If an Event of Default shall have occurred, but subject to Section 10.3 and to the provisions of any Extraordinary Resolution that may be passed by the Unitholders hereinafter provided:

(a) the Trustee may in its discretion proceed to enforce the rights of the Trustee and of the Unitholders by any action, suit, remedy or proceeding authorized or permitted by this Indenture or by law or equity; and may file such proofs of claim and other papers or documents as may be necessary or advisable in order

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	to have the claims of the Trustee and of the Unitholders filed in any bankruptcy, insolvency, winding-up or other judicial proceedings relating to the Corporation;
(b)	no such remedy for the enforcement of the rights of the Trustee or the Unitholders shall be exclusive of or dependent on any other such remedy but any one or more of such remedies may from time to time be exercised independently or in combination;
(c)	all rights of action hereunder may be enforced by the Trustee without the possession of any of the Units or the production thereof at the trial or other proceedings relating thereto; and
(d)	upon receipt of a Unitholders’ Request and upon receiving sufficient funds and being indemnified to its satisfaction as provided in Section 15.7(2), the Trustee shall exercise or take such one or more of such remedies as the Unitholders’ Request may direct, provided that if any such Unitholders’ Request directs the Trustee to take proceedings out of court the Trustee may in its discretion take judicial proceedings in lieu thereof.

Section 10.6     Unitholders May Not Sue.

(1) Right of Action. No Unitholders shall have the right to institute any action, suit or proceeding or to exercise any other remedy authorized or permitted by this Indenture or by law or by equity for the purpose of enforcing payment of principal or interest owing on any Notes comprised in the Units or for the execution of any trust or power hereunder, unless:

(a)	such Holder shall previously have given to the Trustee written notice of the occurrence of an Event of Default;
(b)	the Unitholders, by Extraordinary Resolution, shall have made a request to the Trustee to take action hereunder or the Unitholders’ Request referred to in Section 10.5(d) shall have been delivered to the Trustee, and the Trustee shall have been offered a reasonable opportunity either itself to proceed to exercise the powers hereinbefore granted or to institute an action, suit or proceeding in its name for such purpose;
(c)	the Unitholders or any of them shall have furnished to the Trustee, when requested by the Trustee, sufficient funds and an indemnity in accordance with Section 15.7(2); and
(d)	the Trustee shall have failed to act within a reasonable time thereafter.

(2) Remedies and Proceedings. In such event but not otherwise any Unitholder, acting on behalf of himself and all other Unitholders, shall be entitled to take proceedings in any court of competent jurisdiction such as the Trustee might have taken under Section 10.5, but in no event shall any Unitholder or combination of Unitholders have any right to take any other remedy or proceedings; it being understood and intended that no one or

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more Unitholders shall have any right in any manner whatsoever to enforce any right hereunder or under any Units except subject to the conditions and in the manner herein provided, and that all powers and trusts hereunder shall be exercised and all proceedings at law shall be instituted, had and maintained by the Trustee, except only as herein provided, and in any event for the equal benefit of all Holders of outstanding Units.

Section 10.7     Application of Moneys.

        Except as otherwise provided herein, any moneys arising from any enforcement hereof, whether by the Trustee or any Unitholders, shall be held by the Trustee and applied by it, together with any moneys then or thereafter in the hands of the Trustee available for the purpose, as follows:

(a)	first, in payment or reimbursement to the Trustee of the remuneration, expenses, disbursements and advances of the Trustee earned, incurred or made in the administration or execution of the trusts hereunder or otherwise in relation to this Indenture with interest thereon as herein provided;
(b)	second, in or towards payment of the then current Redemption Consideration of the Units then outstanding and thereafter in or towards payment of the interest on overdue amount on such Units (or if the Unitholders, by instrument signed by more than 50% of the Unitholders or by Extraordinary Resolution passed at a meeting of Unitholders, shall have directed payments to be made in accordance with any other order of priority, or without priority as between principal and interest, then such moneys shall be applied in accordance with such direction); and
(c)	third, the surplus (if any) of such moneys shall be paid to the Corporation or as it may direct;

provided, however, that no payments shall be made in respect of the Redemption Consideration on any Units held by or for the benefit of the Corporation (other than any Units pledged for value and in good faith to a Person other than the Corporation, but only to the extent of such Person’s interest therein) except subject to the prior payment in full of the Redemption Consideration on all Units which are not so held.

Section 10.8     Distribution of Moneys.

Payments to Unitholders pursuant to Section 10.7(b) shall be made as follows:
(a)	at least 10 day’s prior written notice of every such payment shall be given in the manner provided in Article 14 specifying the date and time when and the place or places where such payments are to be made and the amount of the payment and the application thereof as between principal and interest;
(b)	payment on any Units shall be made upon presentation of the Unit Certificates evidencing such Units at any one of the places specified in such notice and any

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	Unit Certificates evidencing such Units thereby paid in full shall be surrendered, otherwise a notation of such payment shall be endorsed thereon; but the Trustee may in its discretion dispense with presentation and surrender or endorsement in any special case upon receipt by it of such indemnity as it shall consider sufficient;
(c)	from and after the date of payment specified in the notice, the Redemption Price shall be adjusted pursuant to Section 3.1(3) for the interest accruing only on the amount owing on each Note after giving credit for the amount of the payment specified in such notice, unless payment of such amount is not made; and
(d)	the Trustee shall not be required to make any partial or interim payment to Unitholders unless the moneys in its hands, after reserving therefrom such amount as the Trustee may think necessary to provide for the payments mentioned in Section 10.7(a), exceed 5% of the aggregate Principal Amount of the Notes comprised in outstanding Units, but it may retain the moneys so received by it and deal with the same as provided in Article 15 until the money or investments representing the same, with the income derived therefrom, together with any other moneys for the time being under its control shall be sufficient for such purpose or until it shall consider it advisable to apply the same in the manner hereinbefore set forth.

Section 10.9     Persons Dealing with the Trustee.

        No Person dealing with the Trustee or any of its agents shall be concerned to enquire whether an Event of Default has occurred, or whether the powers which the Trustee is purporting to exercise have become exercisable, or whether any moneys remain due under this Indenture or on the Units, or to see to the application of any moneys paid to the Trustee; and in the absence of fraud on the part of such Person, such dealing shall be deemed to be within the powers hereby conferred and to be valid and effective accordingly.

Section 10.10     Trustee’s Appointed Attorney.

        The Corporation irrevocably appoints the Trustee to be the attorney of the Corporation in the name and on behalf of the Corporation to execute any instruments and do any things which the Corporation ought to execute and do, and has not executed or done, under the covenants and provisions contained in this Indenture and generally to use the name of the Corporation in the exercise of all or any of the powers hereby conferred on the Trustee with full powers of substitution and revocation.

Section 10.11     Remedies Cumulative.

        No remedy herein conferred upon or reserved to the Trustee or the Unitholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing by law or by statute.

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Section 10.12     Immunity of Shareholders, Directors and Others.

        The Unitholders and the Trustee waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future incorporator, shareholder, director of officer of the Corporation or of any Successor Corporation for the payment of the principal of or interest on any of the Notes or on any covenant, agreement, representations or warranty by the Corporation contained herein or in the Notes.

Section 10.13     Judgment Against the Corporation.

        In the case of any judicial or other proceedings to obtain judgment for the principal of or interest on the Notes, judgment may be rendered against the Corporation in favour of the Unitholders or in favour of the Trustee, as Trustee for the Unitholders, for any amount which may remain due in respect of the Notes.

ARTICLE 11
SATISFACTION AND DISCHARGE

Section 11.1     Cancellation and Destruction.

        All Unit Certificates representing Units shall forthwith after payment thereof be delivered to the Trustee and cancelled by it. Subject to trust industry practice, all Unit Certificates representing Units which are cancelled or required to be cancelled under this or any other provision of this Indenture shall be destroyed by the Trustee and, if required by the Corporation, the Trustee shall furnish to it a destruction certificate setting out the designating numbers and denominations of the Unit Certificates so destroyed.

Section 11.2     Non-Presentation of Units.

        If the Holder of any Units shall fail to present its Unit Certificate(s) for redemption or conversion or shall not accept payment on account thereof and give such receipt therefor (if any) as the Trustee may require:

(a)	the Corporation shall be entitled to deliver to the Trustee and direct it to set aside; or
(b)	in respect of moneys in the hands of the Trustee which may or should be applied to the payment of the Units, the Corporation shall be entitled to direct the Trustee to set aside; or
(c)	if the redemption was pursuant to notice given by the Trustee, the Trustee may itself set aside;

the sums, Class A Shares or Class B Shares, as the case may be, in trust to be remitted to the Unitholders upon due presentation and surrender of the Unit Certificates in accordance with the provisions of this Indenture; and thereupon such sums, Class A Shares or Class B Shares shall be deemed to have been paid and thereafter such Units shall not be considered as outstanding hereunder and the Holders thereof shall thereafter have no right in respect thereof except that of receiving the sums or shares so set aside by the Trustee without interest thereon

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(without interest thereon) upon due presentation and surrender of the Units, subject always to the provisions of Section 11.3. Any moneys so set aside may, and, if remaining unclaimed for 60 days shall, be invested by the Trustee in accordance with Article 15.

Section 11.3     Repayment of Unclaimed Moneys.

        Subject to any applicable law with respect to the deposit of unclaimed moneys with any public authority and to any applicable law of prescription or statute limitation, any moneys set aside under Section 11.2 and not claimed by and paid to Unitholders as provided in Section 11.2 within six years after the date of such setting aside shall be repaid to the Corporation by the Trustee on demand and thereupon the Trustee shall be released from all further liability with respect to such moneys and thereafter the Unitholders in respect of which such moneys were so repaid to the Corporation shall have no rights in respect thereof except to obtain payment of the moneys due thereon from the Corporation.

Section 11.4     Discharge.

        Upon proof being given to the reasonable satisfaction of the Trustee that all the Notes comprised in Units have been paid or satisfied or that, all the outstanding Units having matured or having been duly called for redemption or the Trustee having been given irrevocable instructions by the Corporation to give within 90 days notice of redemption of all the outstanding Units, such payment or redemption has been duly provided for by payment to the Trustee or otherwise, and upon payment of all costs, charges and expenses properly incurred by the Trustee in relation to this Indenture and all interest thereon and the remuneration of the Trustee, or upon provision satisfactory to the Trustee being made therefor, the Trustee shall, at the request and at the expense of the Corporation, execute and deliver to the Corporation such deeds or other instruments as shall be necessary to evidence the satisfaction and discharge of this Indenture and to release the Corporation from its covenants contained herein except those relating to the indemnification of the Trustee.

ARTICLE 12
SUCCESSOR CORPORATION

Section 12.1     Certain Requirements in Respect of Merger, etc.

        The Corporation shall not enter into any transaction, whether by way of amalgamation (except a short-form amalgamation with one or more of its wholly-owned subsidiaries pursuant to the Canada Business Corporations Act) merger, arrangement reconstruction, reorganization, consolidation, transfer, sale, lease or otherwise whereby all or substantially all of its undertaking, property and assets would become the property of any other Person or, in the case of any such amalgamation, of the continuing corporation resulting therefrom, unless, but may do so if:

(a)	such other Person or continuing corporation is a corporation (the “Successor Corporation”) incorporated under the laws of Canada or any province thereof;
(b)	the Successor Corporation shall perform such acts and execute, prior to or contemporaneously with the completion of such transaction, such indenture

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	supplemental hereto and other instruments (if any) as in the opinion of Counsel are necessary or advisable to evidence the assumption by the Successor Corporation of the liability for the due and punctual payment of all the Notes and the interest thereon and all other moneys payable hereunder and the covenant of such Successor Corporation to pay the same and its agreement to observe and perform all the covenants and obligations of the Corporation under this Indenture;
(c)	the Units will be valid and binding obligations of the Successor Corporation entitling the Holders, as against the Successor Corporation, to all of the rights they have under this Indenture; and
(d)	no condition or event shall exist in respect of the Corporation or the Successor Corporation, either at the time of such transaction or immediately thereafter after giving full effect thereto, which constitutes or would, after the giving of notice or the lapse of time or both, constitute an Event of Default hereunder.

Section 12.2     Vesting of Powers in Successor.

        Whenever the conditions of Section 12.1 have been duly observed and performed, the Trustee shall execute and deliver the supplemental indenture provided for in Article 16 and thereupon:

(a)

the Successor Corporation shall possess and from time to time may exercise each and every right and power of the Corporation under this Indenture in the name of the Corporation or otherwise, and any act or proceeding by any provision of this Indenture required to be done or performed by any Directors or officers of the Corporation may be done and performed with like force and effect by the like directors or officers of such Successor Corporation; and

(b)

the Corporation shall be released and discharged from liability under this Indenture and the Trustee may execute any documents which it may be advised are necessary or advisable for effecting or evidencing such release and discharge.

ARTICLE 13
MEETINGS OF UNITHOLDERS

Section 13.1     Right to Convene Meetings.

        The Trustee may at any time and from time to time and shall, upon receipt of a written request of the Corporation or a Unitholders’ Request and of sufficient funds and upon being indemnified to its reasonable satisfaction by the Corporation or by the Unitholders signing such Unitholders’ Request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Unitholders. If the Trustee fails within 30 days after receipt of such written request or Unitholders’ Request and such indemnity to give notice convening a meeting, the Corporation or such Unitholders, as the case may be, may convene such meeting. Every such meeting shall be held in the city of Montreal or at such other place as may be approved or determined by the Trustee.

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Section 13.2     Notice of Meetings.

        Subject to Section 13.12, not more than 60 and not less than 30 days’ notice of any meeting shall be given to the Unitholders and a copy thereof shall be sent by mail to the Trustee unless the meeting has been called by it and to the Corporation unless the meeting has been called by it. Such notice shall state the time when and the place where the meeting is to be held and shall state briefly the general nature of the business to be transacted thereat, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed at the meeting or any of the provisions of this Article 13.

Section 13.3     Chairman.

        An individual, who need not be a Unitholders, nominated in writing by the Trustee shall be chairman of the meeting and if no individual is so nominated or if the individual so nominated is unable or unwilling to act or if the individual so nominated is not present within 15 minutes from the time fixed for the holding of the meeting, the Unitholders present in person or by proxy shall choose an individual present to be chairman.

Section 13.4     Quorum.

        At any meeting of the Unitholders other than a meeting convened for the purpose of considering a resolution proposed to be passed as an Extraordinary Resolution, as to which the provisions of Section 13.12 shall be applicable, a quorum shall consist of Unitholders present in person or by proxy and holding Units representing at least 50% in Principal Amount of Notes included in outstanding Units. If a quorum of the Unitholders shall not be present within 30 minutes from the time fixed for holding any such meeting, the meeting, if convened by the Unitholders or pursuant to a Unitholders’s Request, shall be dissolved; but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day, in which case it shall be adjourned to the next following Business Day) at the same time and place. At the adjourned meeting ,the Unitholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent Units including 50% of the Principal Amount of Notes included in all outstanding Units.

Section 13.5     Power to Adjourn.

        The chairman of any meeting at which a quorum of the Unitholders is present may, with the consent of the Holders of Unit representing a majority in Principal Amount of the Notes included in Units represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

Section 13.6     Show of Hands.

        Every question submitted to a meeting shall be decided in the first place by a majority of the votes given on a show of hands except that votes on Extraordinary Resolutions shall be given in the manner hereinafter provided. At such meeting unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried

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unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact.

Section 13.7     Poll.

        On every Extraordinary Resolution, and on any other question submitted to a meeting, when demanded by the chairman or by one or more Unitholders and/or proxies for Unitholders holding at least 5% of the Principal Amount of the Notes included in the Units represented thereat, a poll shall be taken in such manner as the chairman shall direct. Questions other than Extraordinary Resolutions shall, if a poll is taken, be decided by the votes of the Holders of a majority in Principal Amount of the Notes included in the Units represented at the meeting and voted on the poll.

Section 13.8     Voting.

        On a show of hands, every Person who is present and entitled to vote, whether as a Unitholder or as proxy, shall have one vote. On a poll each Unitholder present in person or represented by a duly appointed proxy shall be entitled to one vote in respect of each $100.00 Principal Amount of Notes included in Units of which he shall then be the Holder. A proxy need not be a Unitholders. In the case of joint registered Unitholders, any one of them present in person or by proxy at the meeting may vote in the absence of the other or others; but in case more than one of them are present in person or by proxy, they shall vote together in respect of the Notes of which they are joint registered Holders.

Section 13.9     Regulations.

(1) Power to Make Regulations. The Trustee or the Corporation, with the approval of the Trustee, may from time to time make and from time to time vary such regulations as it shall from time to time think fit providing for:

(a)	voting by proxy and the form of the instrument appointing a proxy (which shall be in writing) and the manner in which the same shall be executed and for the production of the authority of any Person signing on behalf of a Unitholder;
(b)	the deposit of instruments appointing proxies at such place as the Trustee, the Corporation or the Unitholders convening a particular meeting, as the case may be, may in the notice convening the meeting direct and the time, if any, before the holding of the meeting or any adjournment thereof by which the same shall be deposited; and
(c)	the deposit of instruments appointing proxies at some approved place or places other than the place at which a particular meeting is to be held and enabling particulars of instruments appointing proxies to be mailed, cabled, telegraphed, telecopied or sent by telex before the meeting to the Corporation or to the Trustee at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.

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(2) Regulations Binding. Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only Persons who shall be recognized at any meeting as the Holders of any Notes, or as entitled to vote or be present at the meeting in respect thereof, shall be Unitholders and persons whom Unitholders have duly appointed as their proxies.

Section 13.10     Corporation and Trustee May Be Represented.

        The Corporation and the Trustee, by their respective officers and directors, and the legal advisers of the Corporation and the Trustee may attend any meeting of the Unitholders, but shall have no vote as such.

Section 13.11     Powers Exercisable by Extraordinary Resolution.

        In addition to the powers conferred upon them by any other provisions of this Indenture or by law, a meeting of the Unitholders shall have the following powers exercisable from time to time by Extraordinary Resolution:

(a)	power to approve any change whatsoever in any of the provisions of this Indenture or the Units and any modification, abrogation, alteration, compromise or arrangement of the rights of the Unitholders and/or the Trustee against the Corporation or against its undertaking, property and assets or any part thereof, whether such rights arise under this Indenture or the Notes or otherwise;
(b)	power to approve any scheme for the reconstruction or reorganization of the Corporation or for the consolidation, amalgamation or merger of the Corporation with any other corporation or for the selling or leasing of the undertaking, property and assets of the Corporation or any part thereof, provided that no such approval shall be necessary in respect of any such transaction if the provisions of Article 12 shall have been complied with;
(c)	power to direct or authorize the Trustee to exercise any power, right, remedy or authority given to it by this Indenture or the Units in any manner specified in such Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;
(d)	power to waive and direct the Trustee to waive any default or Event of Default hereunder and/or cancel any declaration made by the Trustee pursuant to Section 10.3 either unconditionally or upon any conditions specified in such Extraordinary Resolution;
(e)	power to restrain any Unitholder from taking or instituting any suit, action or proceeding for the purpose of enforcing payment of the principal or interest of any Notes, or for the execution of any trust or power hereunder;
(f)	power to direct any Unitholder who, as such, has brought any action, suit or proceeding to stay or discontinue or otherwise deal with the same in the manner

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	directed by such Extraordinary Resolution upon payment, if the taking of such action, suit or proceeding shall have been permitted by Section 10.6, of the costs, charges and expenses reasonably and properly incurred by such Unitholder in connection therewith;
(g)	power to appoint a committee to consult with the Trustee (and to remove any committee so appointed) and to delegate to such committee (subject to such limitations, if any, as may be prescribed in such Extraordinary Resolution) all or any of the powers which the Unitholders may exercise by Extraordinary Resolution under this Section 13.11; the Extraordinary Resolution making such appointment may provide for payment of the expenses and disbursements of and compensation to such committee; such committee shall consist of such number of individuals (who need not be Unitholders) as shall be prescribed in the Extraordinary Resolution appointing it; subject to the Extraordinary Resolution appointing it, every such committee may elect its chairman and may make regulations respecting its quorum, the calling of its meetings, the filling of vacancies occurring in its number, the manner in which it may act and its procedure generally and such regulations may provide that the committee may act at a meeting at which a quorum is present or may act by resolution signed in one or more counterparts by a majority of the members thereof or the number of members thereof necessary to constitute a quorum, whichever is the greater; all acts of any such committee within the authority delegated to it shall be binding upon all Unitholders;
(h)	power to agree to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation;
(i)	power to authorize the distribution in specie of any shares, bonds, Notes or other securities or obligations and/or cash or other consideration received or the use or disposition of the whole or any part of such shares, bonds, Notes or other securities or obligations and/or cash or other consideration in such manner and for such purpose as may be considered advisable and specified in such Extraordinary Resolution;
(j)	power to approve the exchange of the Notes for or the conversion thereof into shares, bonds, Notes or other securities or obligations of the Corporation or of any company formed or to be formed;
(k)	power to remove the Trustee from office and to appoint a new Trustee or Trustee; and
(l)	power to amend, alter or repeal any Extraordinary Resolution previously passed or approved by the Unitholders or by any committee appointed pursuant to Section 13.11(g).

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Section 13.12     Meaning of “Extraordinary Resolution”.

(1)	Meaning. The expression “Extraordinary Resolution” when used in this Indenture means, subject as hereinafter provided in this Article 13, a resolution proposed to be passed as an Extraordinary Resolution at a meeting of Unitholders duly convened for the purpose and held in accordance with the provisions of this Article 13 at which the Holders of more than 50% of the principal amount of the Notes then outstanding are present in person or by proxy and passed by the favourable votes of the Holders of not less than 66 2/3% of the principal amount of Notes represented at the meeting and voted on a poll upon such resolution.
(2)	Quorum. If at any such meeting the holders of more than 50% of the principal amount of the Notes then outstanding are not present in person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by the Unitholders or pursuant to a Unitholder’s Request, shall be dissolved; but in any other case it shall be adjourned to such date, being not less than 21 nor more than 60 days later, and to such place and time as may be appointed by the chairman.
(3)	Notice. Not less than 10 days’ notice shall be given of the time and place of such adjourned meeting in the manner provided in Article 14.
(4)	Form of Notice. The notice shall state that at the adjourned meeting the Unitholders present in person or by proxy shall form a quorum, but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars.
(5)	Quorum at Adjourned Meeting. At the adjourned meeting the Unitholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed in accordance with Section 13.12(1) shall be an Extraordinary Resolution within the meaning of this Indenture, notwithstanding that the Holders of more than 50% of the principal amount of the Notes then outstanding are not present in person or by proxy at such adjourned meeting.
(6)	Poll. Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

Section 13.13     Powers Cumulative.

        It is hereby declared and agreed that any one or more of the powers and/or any combination of the powers in this Indenture stated to be exercisable by the Unitholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the Unitholders to exercise the same or any other such power or powers or combination of powers thereafter from time to time.

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Section 13.14     Minutes.

        Minutes of all resolutions and proceedings at every meeting of Unitholders shall be made and duly entered in books to be provided for that purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting of the Unitholders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed or proceedings had thereat, to have been duly passed and had.

Section 13.15     Signed Instruments.

        Any action which may be taken and any power which may be exercised by the Unitholders at a meeting held as hereinbefore in this Article provided may also be taken and exercised by the Holders of more than 66 2/3% of the principal amount of the outstanding Notes by a signed instrument and the expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so signed. Notice of any Extraordinary Resolution passed in accordance with this Section 13.15 shall be given by the Trustee to the Unitholders affected thereby within 30 days of the date on which such Extraordinary Resolution was passed.

Section 13.16     Binding Effect of Resolutions.

        Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article 13 at a meeting of Unitholders shall be binding upon all the Unitholders, whether present at or absent from such meeting, and every instrument signed by Unitholders in accordance with Section 13.15 shall be binding upon all the Unitholders, whether signatories thereto or not, and each and every Unitholder and the Trustee (subject to the provisions for its indemnity herein contained) shall be bound to give effect to every such resolution, Extraordinary Resolution and instrument.

Section 13.17     Evidence of Rights of Unitholders.

(1) Proof. Any request, direction, notice, consent or other instrument which this Indenture may require or permit to be signed or executed by the Unitholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Unitholders in person or by attorney duly appointed in writing. Proof of the execution of any such request, direction, notice, consent or other instrument or of a writing appointing any such attorney shall be sufficient for any purpose of this Indenture if made in the following manner, namely, the fact and date of the execution by any Person of such request, direction, notice, consent or other instrument or writing may be proved by the certificate of any commissioner for oaths, or other officer authorized to take acknowledgements of deeds to be recorded at the place where such certificate is made, that the Person signing such request, direction, notice, consent or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution or in any other manner which the Trustee may consider adequate.

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(2) Further Proof. The Trustee may nevertheless, in its discretion, require further proof in cases where it considers further proof necessary or desirable or may accept such other proof as it shall consider proper.

ARTICLE 14
NOTICES

Section 14.1     Notice to the Corporation and Trustee.

(1) Notice. Subject to the terms and provisions of this Indenture, any notice, direction or other communication hereunder shall be in writing and shall be given by delivery or by facsimile transmission (if receipt of such transmission is confirmed):

(a)	if to the Corporation at:
	Microcell Telecommunications Inc.
	800 de La Gauchetière Street West
	Suite 4000
	Montreal, Quebec
	H5A 1K3
	Attention:	Vice President, Legal Affairs
	Facsimile:	(514) 846-6928
(b)	if to the Trustee at:
	Computershare Trust Company of Canada
	1500 University Street
	Suite 700
	Montreal, Quebec
	H3A 3S8
	Attention:	Manager, Corporate Trust
	Telecopier:	(514) 982-7677

        Any such notice shall be deemed to have been given if delivered by courier during normal business hours of the recipient on a Business Day, on the day following the date of delivery and if sent by facsimile transmission, on the Business Day so sent provided that any delivery made or sent by facsimile after 4:00 p.m. (Montreal time) on a Business Day, shall be deemed to be received on the next following Business Day.

(2) Change of Address. The Corporation or the Trustee, as the case may be, may from time to time notify the other in the manner provided in Section 14.1(1) hereof of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Corporation or the Trustee, as the case may be, for all purposes of this Indenture.

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Section 14.2     Notice to Unitholders.

(1)

Notice. Unless otherwise expressly provided herein, a notice to be given hereunder to Unitholders will be deemed to be validly given if the notice is sent by ordinary surface or air mail, postage prepaid, addressed to the Unitholders or delivered (or so mailed to certain Unitholders and so delivered to the other Unitholders) at their respective addresses appearing on any of the registers of Holders, provided, however, that if, by reason of a strike, lockout or other work stoppage, actual or threatened, involving Canadian postal employees, the notice could reasonably be considered unlikely to reach or likely to be delayed in reaching its destination, the notice will be valid and effective only if it is so delivered or is given by publication twice in the Report on Business Section in the national edition of The Globe and Mail newspaper or any other newspaper published in Toronto and Montreal.

(2)

Date of Notice. A notice so given by mail or so delivered will be deemed to have been given on the first Business Day after it has been mailed or on the day on which it has been delivered, as the case may be, and a notice so given by publication will be deemed to have been given on the day on which it has been published as required. In determining under any provision hereof the date when notice of a meeting or other event must be given, the date of giving notice will be included and the date of the meeting or other event will be excluded. Accidental error or omission in giving notice or accidental failure to mail notice to any Unitholder will not invalidate any action or proceeding founded thereon.

ARTICLE 15
CONCERNING THE TRUSTEE

Section 15.1     Trust Indenture Legislation.

        If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of any applicable legislation, including any provision of the TIA (the “Indenture Legislation”), the mandatory requirement shall prevail. The Corporation and the Trustee each shall at all times in relation to this Indenture and any action to be taken hereunder observe and comply with and be entitled to the benefits of any applicable legislation including any provision of the TIA.

Section 15.2     Rights and Duties of Trustee.

(1) Duty of Trustee. In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good faith with a view to the best interests of the Unitholders, and shall exercise that degree of care, diligence and skill that reasonably prudent Trustee would exercise in comparable circumstances. The Trustee shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required so to do under the terms hereof; nor shall the Trustee be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee and in the absence of any such notice the Trustee may for all purposes of this

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	Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Trustee to determine whether or not the Trustee shall take action with respect to any default.
(2)	No Relief From Liability. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent act, negligent failure to act, wilful misconduct or bad faith.
(3)	Actions. The obligation of the Trustee to commence or continue any act, action or proceeding in connection herewith, including without limitation, for the purpose of enforcing any right of the Trustee or the Unitholders hereunder is on the conditions that the Trustee shall have received a Unitholders’ Request specifying the act, action or proceeding which the Trustee is requested to take and, when required by notice to the Unitholders by the Trustee, the Trustee is furnished by one or more Unitholders with sufficient funds to commence or continue such act, action or proceeding and an indemnity reasonably satisfactory to the Trustee to protect and hold it harmless against the costs, charges, expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof.
(4)	Funding. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless it is so indemnified.
(5)	Deposit of Units. The Trustee may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Unitholders at whose instance it is taking such act, action or proceeding to deposit with the Trustee the Unit Certificates held by them, for which certificates the Trustee shall issue receipts.
(6)	Restriction. Every provision of this Indenture that relieves the Trustee of liability or entitles it to rely on any evidence submitted to it is subject to the provisions of Applicable Legislation, of this Section and of Section 15.3 hereof.

Section 15.3     Evidence, Experts and Advisers.

(1)

Evidence. In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Trustee such additional evidence of compliance with any provision hereof, and in such form, as is prescribed by Applicable Legislation or as the Trustee reasonably requires by written notice to the Corporation.

(2)

Reliance by Trustee. In the exercise of any right or duty hereunder the Trustee, if it is acting in good faith, may act and rely, as to the truth of any statement or the accuracy of any opinion expressed therein, on any statutory declaration, opinion, report, certificate or other evidence furnished to the Trustee pursuant to a provision hereof or of Applicable Legislation or pursuant to a request of the Trustee, if such evidence complies

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	with Applicable Legislation and the Trustee examines such evidence and determines that it complies with the applicable requirements of this Indenture.
(3)	Statutory Declaration. Whenever Applicable Legislation requires that evidence referred to in Section 15.3(1) hereof be in the form of a statutory declaration, the Trustee may accept such statutory declaration in lieu of a Certificate of the Corporation required by any provision hereof. Any such statutory declaration may be made by any one or more of the Chairperson, President, Vice-President, Finance or Secretary of the Corporation or by any other officer(s) or director(s) of the Corporation to whom such authority is delegated by the directors from time to time. In addition, the Trustee may act and rely and shall be protected in acting and relying upon any resolution, certificate, direction, instruction, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram, cablegram or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties.
(4)	Proof of Execution. Proof of the execution of any document or instrument in writing, including a Unitholders’ Request, by a Unitholder may be made by the certificate of a notary public, or other officer with similar powers, that the person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution, or in any other manner that the Trustee considers adequate.
(5)	Experts. The Trustee may employ or retain such counsel, accountants, engineers, appraisers, or other experts or advisers as it reasonably requires for the purpose of determining and discharging its rights and duties hereunder and may pay the reasonable remuneration and disbursements for all services so performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct or negligence on the part of any of them who has been selected with due care by the Trustee. The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant or other expert or advisor, whether retained or employed by the Corporation or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.
(6)	Trustee not Liable. The Trustee shall not be responsible for ensuring compliance with any securities laws applicable to the issuance, transfer, exercise or exchange of any Units or underlying Class A Shares or Class B Shares. The Trustee shall be entitled to conclusively rely on the Residency Declaration provided to it with respect to the proper entitlement and issuance of underlying Class A Shares or Class B Shares.

Section 15.4     Documents, Money etc. Held by Trustee.

(1)	Safekeeping. Any security, document of title or other instrument that may at any time be held by the Trustee subject to the trusts hereof may be placed in the deposit vaults of the Trustee or of any Canadian chartered bank or trust company or deposited for safekeeping with any such bank or trust company.
(2)	Holding of Funds. Unless herein otherwise expressly provided, any money held by the Trustee pending the application or withdrawal thereof under any provision of this

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	Indenture may be deposited in trust in an account with the Trustee or in the name of the Trustee in any Canadian chartered bank or trust company at the rate (if any) then current on similar deposits.
(3)	Interest. All interest or other income received by the Trustee in respect of such deposits and investments shall belong to the Corporation.

Section 15.5      Action by Trustee to Protect Interests.

        The Trustee shall have power to institute and to maintain such actions and proceedings as it considers necessary or expedient to protect or enforce its interests and the interests of the Unitholders.

Section 15.6     Trustee not Required to Give Security.

        The Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture.

Section 15.7     Protection of Trustee.

(1) Protection. By way of supplement to the provisions of any law for the time being relating to Trustee, it is expressly declared and agreed that:

(a)	the Trustee shall not be liable for or by reason of, or required to substantiate, any statement of fact, representation or recital in this Indenture or in the Unit Certificates (except the representation contained in Section 15.9 or in the certificate of the Trustee on the Unit Certificates), but all such statements or recitals are and shall be deemed to be made by the Corporation;
(b)	nothing herein contained shall impose on the Trustee any obligation to see to, or to require evidence of, the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;
(c)	the Trustee shall not be bound to give notice to any person of the execution hereof;
(d)	the Trustee shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach by the Corporation of any obligation or warranty herein contained or of any act of any director, officer, employee or agent of the Corporation;
(e)	the Trustee, in its personal or any other capacity, may buy, lend upon and deal in securities of the Corporation and in the Units and generally may contract and enter into financial transactions with the Corporation or any related corporation without being liable to account for any profit made thereby; and
(f)	the Trustee shall incur no liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail, or any other means.

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(2) Indemnity. In addition to and without limiting any protection of the Trustee hereunder or otherwise by law, the Corporation hereby indemnifies the Trustee and saves it and its officers, directors, employees and agents harmless from all liabilities, suits, damages, costs, expenses and actions which may be brought against or suffered by it arising out of or connected with the performance by it of its duties hereunder except to the extent that such liabilities, suits, damages, costs and actions are attributable to the negligence or wilful misconduct of the Trustee. Notwithstanding any other provision hereof, this indemnity shall survive any removal or resignation of the Trustee, discharge of this Indenture and termination of any trusts hereunder.

Section 15.8     Replacement of Trustee.

(1)	Resignation. The Trustee may resign its trust and be discharged from all further duties and liabilities hereunder, except as provided in this Section, by giving to the Corporation and the Unitholders not less than 30 days’ notice in writing or, if a new Trustee has been appointed, such shorter notice as the Corporation accepts as sufficient.
(2)	Removal. The Unitholders by Extraordinary Resolution may at any time remove the Trustee and appoint a new Trustee.
(3)	Appointment of New Trustee. If the Trustee so resigns or is so removed or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable of acting hereunder, the Corporation shall forthwith appoint a new Trustee unless a new Trustee has already been appointed by the Unitholders.
(4)	Failure to Appoint. Failing such appointment by the Corporation, the retiring Trustee or any Unitholder may apply at the expense of the Corporation to the Superior Court of the Province of Quebec, on such notice as such Court directs, for the appointment of a new Trustee.
(5)	New Trustee. Any new Trustee appointed under this Section must be a corporation authorized to carry on the business of a trust company in Quebec and, if required by the Applicable Legislation of any other province, in such other province. On any such appointment the new Trustee shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Trustee without any further assurance, conveyance, act or deed, but there shall be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as, in the opinion of counsel, are necessary or advisable for the purpose of assuring the transfer of such powers, rights, duties and responsibilities to the new Trustee. Any new Trustee so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Unitholders and by the Corporation.
(6)	Notice of New Trustee. On the appointment of a new Trustee, the Corporation shall promptly give notice thereof to the Unitholders in accordance with Section 14.1 hereof.
(7)	Successor Trustee. A corporation into or with which the Trustee is merged or consolidated or amalgamated, or a corporation succeeding to the trust business of the Trustee, shall be the successor to the Trustee hereunder without any further act on its

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	part or on the part of any party hereto if such corporation would be eligible for appointment as a new Trustee under Section 15.8(5) hereof.
(8)	Certificates. A Unit Certificate certified but not delivered by a predecessor Trustee may be delivered by the new or successor Trustee in the name of the predecessor Trustee or successor Trustee.

Section 15.9     Conflict of Interest.

        The Trustee represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists between its role as a fiduciary hereunder and its role in any other capacity and if a material conflict of interest arises hereafter it shall, within ten days after ascertaining that it has such material conflict of interest, either eliminate the conflict of interest or resign its trust hereunder.

Section 15.10     Trustee’s Authority to Carry on Business.

        The Trustee represents to the Corporation that at the date hereof it is authorized to carry on the business of a trust company in Quebec and each other province and territory of Canada. If, notwithstanding the provisions of this Section 15.10, the Trustee ceases to be authorized to carry on such business, the validity and enforceability of this Indenture and the interest of the Unitholders in the Units registered hereunder shall not be affected in any manner whatsoever by reason only of such event provided that the Trustee, within 30 days after ceasing to be authorized to carry on business, either becomes so authorized or resigns in the manner and with the effects specified in Section 15.8.

Section 15.11     Acceptance of Trust.

        The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform them on the terms and conditions herein set forth.

ARTICLE 16
SUPPLEMENTAL INDENTURES

Section 16.1     Supplemental Indentures.

        From time to time the Trustee and, when authorized by a resolution of the Directors, the Corporation may and they shall, when required by this Indenture, execute, acknowledge and deliver by their proper officers deeds or indentures supplemental hereto, which thereafter shall form part hereof, for any one or more of the following purposes:

(a)	adding to the provisions hereof such additional covenants of the Corporation, enforcement provisions and other provisions for the protection of the Unitholders and/or providing for events of default in addition to those herein specified;
(b)	making such provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder, including the making of any modifications in the form of the Units which do not affect the

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	substance thereof and which, in the opinion of the Trustee, it may be expedient to make, provided that the Trustee shall be of the opinion that such provisions and modifications will not be prejudicial to the interests of the Unitholders;
(c)	evidencing the succession, or successive successions, of other companies to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Indenture;
(d)	giving effect to any Extraordinary Resolution passed as provided in Article 13;
(e)	making any modification of any of the provisions of this Indenture or the Units which is of a formal, minor or technical nature;
(f)	making any additions to, deletions from or alterations of the provisions of this Indenture (including any of the terms and conditions of the Units) which, in the opinion of the Trustee, are not materially prejudicial to the interests of the Unitholders and which are necessary or advisable in order to incorporate, reflect or comply with Indenture Legislation;
(g)	adding to or altering the provisions hereof in respect of the transfer of Units, including provision for the exchange of Units of different denominations, and making any modification in the form of the Units which does not affect the substance thereof and which, in the opinion of the Trustee, is not materially prejudicial to the interests of the Unitholders;
(h)	correcting or rectifying any ambiguities, defective provisions, errors or omissions herein, provided that, in the opinion of the Trustee, the rights of the Trustee and the Unitholders are in no way prejudiced thereby;
(i)	modifying, eliminating or adding to the provisions of this Indenture to such extent as shall be necessary or desirable as a result of the provisions of the Civil Code, provided such action pursuant to this Clause shall not, in the judgment of the Trustee, adversely affect the interests of the Unitholders in any material respect; and
(j)	any other purpose not inconsistent with the terms of this Indenture provided that, in the opinion of the Trustee, the rights of the Trustee and of the Unitholders are in no way prejudiced thereby.

        Notwithstanding anything to the contrary in this Indenture, no supplement or amendment to this Indenture or to the terms of the Notes may be made without the prior consent of each Canadian stock exchange on which the Units, Voting Shares and Non-Voting Shares are listed, or were listed in the year prior to the date that such supplement or amendment to the Indenture or the terms of the Notes is to be made.

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ARTICLE 17
EXECUTION

Section 17.1     Counterparts and Formal Date.

        This Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to bear date as of May 30, 2003.

Section 17.2     Language of Indenture.

        The parties hereto have requested that this Indenture and all contracts, documents or notices relating thereto be drafted in the English language; les parties à cet acte ont exigé que cet acte et tout contrat, document ou avis y afférent soit rédigé en langue anglaise.

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        IN WITNESS WHEREOF, the parties hereto have executed this Indenture as of the date and as at the place first hereinabove mentioned.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté
	Vice President, Legal Affairs
COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

SCHEDULE 1.1

RESIDENCY DECLARATION

TO: COMPUTERSHARE TRUST COMPANY OF CANADA

1.	The undersigned, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered upon issuance, hereby DECLARES that the ultimate beneficial owner of Shares will be upon issuance:
	the undersigned, OR
	if other than the undersigned,
	(Name and Address)

2. The beneficial owner of the Shares to be issued will be a Canadian (as defined herein):

Yes No

               For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2 (1) of the Citizenship Act (Canada) who is ordinarily resident in Canada;
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship;
(c)	a Canadian government, whether federal, provincial or local, or an agency thereof;
(d)	a corporation without share capital, where a majority of its directors or officers, as the case may be, are appointed or designated, either by their personal names or by their names of offices, by one or more of

(i)	a federal or provincial statute or regulations made under a federal or provincial statute;
(ii)	the Governor in Council or the lieutenant governor in Council of a province; or

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(iii) a minister of the Crown in right of Canada or of a province;

(e)	a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 662/3 per cent of the issued and outstanding voting shares of such corporation, and which is not otherwise controlled by non-Canadians;
(f)	a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80 per cent of the board and of each committee of its directors of which are individual Canadians;
(g)	a trust in which Canadians have not less than 662/3 per cent of the beneficial interest, and of which a majority of the trustees are Canadians;
(h)	a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate th Pension Fund Society of the Dominion Bank, S.C. 1887, c 55; S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; or
(i)	a partnership in which each of the partners is a Canadian within the meaning of paragraphs a) to h) above.

DATED the	day of	2002
(Name)
(Address)
(Signature)

INSTRUCTIONS

1. This declaration is to be completed by the person (or duly authorized signatory thereof) in whose name shares in the capital of Microcell Telecommunications Inc. are to be registered.

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2. Please return completed declaration to:

Computershare Trust Company of Canada 100 University Avenue
9th Floor
Toronto, Ontario
M5J 2Y1
Attention:	Corporate Actions

SCHEDULE 2.3 (A)

To the foregoing indenture made as of May 30, 2003 between Microcell Telecommunications Inc., Computershare Trust Company of Canada, as Trustee.

VOTING UNIT CERTIFICATE

NO. MICROCELL TELECOMMUNICATIONS INC. $

(Incorporated under the laws of Canada)

FIRST UNITS

Due May 1, 2013

This Unit Certificate is issued to l as the holder thereof (the « Holder”) in accordance with the provisions of the Unit Indenture dated May 30, 2003, (the “Indenture”) between the Corporation and Computershare Trust Company of Canada as Trustee (herein called “Trustee”, which term includes any successor trustee under the Indenture).

The Unit represented by this Unit Certificate evidences one Note (as defined in the Indenture) in the principal amount of $l and one Voting Share (as defined in the Indenture) which shall form together one and the same instrument and may not be detached nor be split, combined, exchanged or transferred separately from each other; such Unit is issued under the Indenture, to which reference is made for a full description of the rights of the Holders of the said Unit, of the Corporation and of the Trustee and of the terms and conditions upon which the Units are issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which provisions the Holder of this Unit, by acceptance hereof assents. In the event of a conflict between the terms of the Indenture and this Unit, the Indenture shall govern.

Subject to any conversion of the Unit evidenced by this Unit Certificate in accordance with the terms of the Indenture, Microcell Telecommunications Inc. hereby promises to satisfy, on May 1, 2013 (“Redemption Date”) or upon redemption of the Units evidenced by this Unit Certificate in accordance with the provisions of the Indenture, the Redemption Consideration (as defined in the Indenture) therefor, in cash or by way of the issuance of Class A Shares, on presentation and surrender of this Unit Certificate at the corporate actions trust office of the Trustee in Toronto (as defined in the Indenture).

No interest on the Note comprised in this Unit shall accrue and shall be paid to the Holder, other than as part of the Redemption Consideration. The Redemption Price of the Note comprised in this Unit (as defined in the Indenture) shall be increased on November 1^st and May 1^st of each year by the amount of accrued interest on the Note. Upon redemption of this Unit and, upon surrender of this Certificate, the Corporation shall forward or cause to be forwarded to the registered address of the Holder of the Unit, or in the case of joint Holders to the registered address of the joint Holder whose name first appears in the register, a cheque in

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the amount of the Redemption Consideration payable to the order of such Holder or Holders and negotiable at par or certificates representing Class A Shares registered in the name of the Holder or Holders, as the case may be. The forwarding of such sums or shares shall satisfy and discharge the liability for amounts due on redemption on this Unit unless, in the case of sums payable, the cheque therefor not be paid on presentation.

The Unit evidenced by this Unit Certificate and all other Units certified and issued under the Indenture rank pari passu without discrimination, preference or priority. The Units are subordinated obligations of the Corporation.

The Corporation shall withhold all applicable withholding taxes from all payments and deliveries under this Unit, whether in respect of principal, interest, amounts payable and property deliverable on redemption, exchange or maturity, or otherwise.

Units may be redeemed at the option of the Corporation in whole or in part at any time prior to the Maturity Date, upon payment of the Redemption Consideration in cash.

Units shall be redeemed by the Corporation on the Maturity Date. On the Maturity Date, the Redemption Consideration of the Units may be satisfied, at the option of the Corporation, by payment in cash or by delivery of Class A Shares of the Corporation. Units shall also be mandatorily redeemed in cash at any time upon the Corporation having Excess Cash Flow (as defined in the Indenture) available for such purpose.

Each Voting Unit is convertible into one Non-Voting Unit at any time upon presentation by the holder of a duly completed and executed conversion notice in the form of the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee at the corporate actions trust office of the Trustee in Toronto.

Each Unit is convertible into Class A Shares at any time, at the option of the Holder, prior to the redemption of such Unit, upon deposit of the Unit Certificate, with the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee, in either case duly executed by the Holder, at the corporate actions trust office of the Trustee in Toronto. Each Unit is also convertible into Class A Shares upon the occurrence of certain events as described in the Unit Indenture.

The Indenture contains provisions for the holding of meetings of Holders and rendering resolutions passed at such meetings and instruments in writing signed by the Holders of a specified majority of Units outstanding binding upon all Holders, subject to the provisions of the Indenture.

This Unit may be transferred only upon compliance with the conditions precedent in the Indenture on the register at the corporate actions trust office of the Trustee in Toronto, and may be exchanged at such places, by the Holder hereof or such Holder’s executors or administrators or other legal representatives or such Holder’s or their attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee, and upon compliance with such reasonable requirements as the Trustee and/or other registrar may prescribe, and such transfer shall be duly noted hereon by the Trustee or other registrar. The Class A Shares or cash to be delivered upon redemption or conversion or at maturity will be available for pick-up

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at the corporate actions trust office of the Trustee in Toronto on the relevant date specified in the Indenture or, at the option of the Holder, will be forwarded by the Trustee on such date. No Holder or transferee may require any transfer to be made on or during the ten Business Days (as defined in the Indenture) immediately prior to a scheduled redemption date.

This Unit shall not become obligatory for any purpose until it shall have been certified by the Trustee for the time being under the Indenture.

The holder of this Unit by receiving and holding same hereby accepts and agrees to be bound by the terms and to be entitled to the benefits of this Unit and of the Indenture and confirms the appointment of the Trustee as the fondé de pouvoir (holder of the power of attorney) of the holder of this Unit and to the extent necessary for the purposes hereof and of the Indenture, the whole in accordance with and subject to the respective provisions thereof.

Terms capitalized but not defined herein have the respective meanings assigned to them in the Indenture.

Dated as of the l day of l

MICROCELL TELECOMMUNICATIONS INC.

By:

TRUSTEE’S CERTIFICATE

This Unit Certificate is one of the Units referred to in the Indenture named above.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer

(reverse side of form)

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FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to l (whose address and social insurance number if applicable, are set forth below), this Unit of Microcell Telecommunications Inc. (the “Corporation”) standing in the name of the undersigned in the register maintained by the Corporation with respect to such Unit and does hereby irrevocably constitute and appoints the Trustee his/her attorneys to transfer such Unit in such register with full power of substitution in the premises.

Dated	(print or type above name of Holder as appearing on the register)
	by:

The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Unit in every particular without alteration or any change whatsoever. The signature of must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Notarized or witnessed signatures are not acceptable as guaranteed signatures.

(No writing hereon except by the Trustee.)

Date Registration In Whose Name Registered Signature of Trustee

FORM OF CONVERSION NOTICE

The undersigned Holder hereby notifies the Trustee and the Corporation that the Holder, by delivery hereof hereby irrevocably exercises the conversion right in respect of the Unit

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evidenced by this Unit Certificate providing for the conversion of such Units into Class A Shares of the Corporation.

Dated this l day of l

[print or type name exactly as appearing on face]
by:
	Name:
	Title:

SCHEDULE 2.3 (B)

To the foregoing indenture made as of May 30, 2003 between Microcell Telecommunications Inc., Computershare Trust Company of Canada, as Trustee.

NON-VOTING UNIT CERTIFICATE

NO. MICROCELL TELECOMMUNICATIONS INC. $

(Incorporated under the laws of Canada)

FIRST UNITS

Due May 1, 2013

This Unit Certificate is issued to l as the holder thereof (the « Holder”) in accordance with the provisions of the Unit Indenture dated May 30, 2003, (the “Indenture”) between the Corporation and Computershare Trust Company of Canada as Trustee (herein called “Trustee”, which term includes any successor trustee under the Indenture).

The Unit represented by this Unit Certificate evidences one Note (as defined in the Indenture) in the principal amount of $l and one Non-Voting Share (as defined in the Indenture) which shall form together one and the same instrument and may not be detached nor be split, combined, exchanged or transferred separately from each other; such Unit is issued under the Indenture, to which reference is made for a full description of the rights of the Holders of the said Unit, of the Corporation and of the Trustee and of the terms and conditions upon which the Units are issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which provisions the Holder of this Unit, by acceptance hereof assents. In the event of a conflict between the terms of the Indenture and this Unit, the Indenture shall govern.

Subject to any conversion of the Unit evidenced by this Unit Certificate in accordance with the terms of the Indenture, Microcell Telecommunications Inc. hereby promises to satisfy, on May 1, 2013 (“Redemption Date”) or upon redemption of the Units evidenced by this Unit Certificate in accordance with the provisions of the Indenture, the Redemption Consideration (as defined in the Indenture) therefor, in cash or by way of the issuance of Class B Shares, on presentation and surrender of this Unit Certificate at the corporate actions trust office of the Trustee in Toronto (as defined in the Indenture).

No interest on the Note comprised in this Unit shall accrue and shall be paid to the Holder, other than as part of the Redemption Consideration. The Redemption Price of the Note comprised in this Unit (as defined in the Indenture) shall be increased on November 1^st and May 1^st of each year by the amount of accrued interest on the Note. Upon redemption of this Unit and, upon surrender of this Certificate, the Corporation shall forward or cause to be forwarded to the registered address of the Holder of the Unit, or in the case of joint Holders to the registered address of the joint Holder whose name first appears in the register, a cheque in

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the amount of the Redemption Consideration payable to the order of such Holder or Holders and negotiable at par or certificates representing Class B Shares registered in the name of the Holder or Holders, as the case may be. The forwarding of such sums or shares shall satisfy and discharge the liability for amounts due on redemption on this Unit unless, in the case of sums payable, the cheque therefor not be paid on presentation.

The Unit evidenced by this Unit Certificate and all other Units certified and issued under the Indenture rank pari passu without discrimination, preference or priority. The Units are subordinated obligations of the Corporation.

The Corporation shall withhold all applicable withholding taxes from all payments and deliveries under this Unit, whether in respect of principal, interest, amounts payable and property deliverable on redemption, exchange or maturity, or otherwise.

Units may be redeemed at the option of the Corporation in whole or in part at any time prior to the Maturity Date, upon payment of the Redemption Consideration in cash.

Units shall be redeemed by the Corporation on the Maturity Date. On the Maturity Date, the Redemption Consideration of the Units may be satisfied, at the option of the Corporation, by payment in cash or by delivery of Class B Shares of the Corporation. Units shall also be mandatorily redeemed in cash at any time upon the Corporation having Excess Cash Flow (as defined in the Indenture) available for such purpose.

Each Non-Voting Unit is convertible into one Voting Unit at any time upon presentation by the holder of a duly completed and executed Residency Declaration in prescribed form, together with a duly completed and executed conversion notice in the form of the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee at the corporate actions trust office of the Trustee in Toronto.

Each Unit is convertible into Class B Shares at any time, at the option of the Holder, prior to the redemption of such Unit, upon deposit of the Unit Certificate, with the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee, in either case duly executed by the Holder, at the corporate actions trust office of the Trustee in Toronto. Each Unit is also convertible into Class B Shares upon the occurrence of certain events as described in the Unit Indenture.

The Indenture contains provisions for the holding of meetings of Holders and rendering resolutions passed at such meetings and instruments in writing signed by the Holders of a specified majority of Units outstanding binding upon all Holders, subject to the provisions of the Indenture.

This Unit may be transferred only upon compliance with the conditions precedent in the Indenture on the register at the corporate actions trust office of the Trustee in Toronto, and may be exchanged at such places, by the Holder hereof or such Holder’s executors or administrators or other legal representatives or such Holder’s or their attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee, and upon compliance with such reasonable requirements as the Trustee and/or other registrar may prescribe, and such transfer shall be duly noted hereon by the Trustee or other registrar. The Class B Shares or

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cash to be delivered upon redemption or conversion or at maturity will be available for pick-up at the corporate actions trust office of the Trustee in Toronto on the relevant date specified in the Indenture or, at the option of the Holder, will be forwarded by the Trustee on such date. No Holder or transferee may require any transfer to be made on or during the ten Business Days (as defined in the Indenture) immediately prior to a scheduled redemption date.

This Unit shall not become obligatory for any purpose until it shall have been certified by the Trustee for the time being under the Indenture.

The holder of this Unit by receiving and holding same hereby accepts and agrees to be bound by the terms and to be entitled to the benefits of this Unit and of the Indenture and confirms the appointment of the Trustee as the fondé de pouvoir (holder of the power of attorney) of the holder of this Unit and to the extent necessary for the purposes hereof and of the Indenture, the whole in accordance with and subject to the respective provisions thereof.

Terms capitalized but not defined herein have the respective meanings assigned to them in the Indenture.

Dated as of the l day of l

MICROCELL TELECOMMUNICATIONS INC.

By:

TRUSTEE’S CERTIFICATE

This Unit Certificate is one of the Units referred to in the Indenture named above.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer

(reverse side of form)

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FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to l (whose address and social insurance number if applicable, are set forth below), this Unit of Microcell Telecommunications Inc. (the “Corporation”) standing in the name of the undersigned in the register maintained by the Corporation with respect to such Unit and does hereby irrevocably constitute and appoints the Trustee his/her attorneys to transfer such Unit in such register with full power of substitution in the premises.

Dated

(print or type name exactly as appearing on the register)

by:

The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Unit in every particular without alteration or any change whatsoever. The signature of must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Notarized or witnessed signatures are not acceptable as guaranteed signatures.

(No writing hereon except by the Trustee.)

Date Registration In Whose Name Registered Signature of Trustee

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FORM OF CONVERSION NOTICE

The undersigned Holder hereby notifies the Trustee and the Corporation that the Holder, by delivery hereof hereby irrevocably exercises the conversion right in respect of the Unit evidenced by this Unit Certificate providing for the conversion of such Units into Class B Shares of the Corporation.

Dated this l day of l

[print or type name exactly as appearing on face]
by:
	Name:
	Title:

EX-1.1

certificate of incorporation

EX-1.2

general by-laws

EX-2.1

first unit indenture made as of may 30, 2003

EX-2.2

Exhibit 2.2

MICROCELL TELECOMMUNICATIONS INC.

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Trustee

UNIT INDENTURE

PROVIDING FOR THE ISSUE OF SECOND UNITS
DUE MAY 1, 2013

Dated May 30, 2003

STIKEMAN ELLIOTT LLP

SECOND NOTE INDENTURE

     THIS INDENTURE made this 30^th day of May 2003 among MICROCELL TELECOMMUNICATIONS INC., a corporation incorporated under the Canada Business Corporations Act (the “Corporation”) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (the “Trustee”).

     WHEREAS Microcell Telecommunications Inc. (now known as 2861399 Canada Inc.), a predecessor corporation to the Corporation, received the sanction of the Superior Court of the Province of Quebec on March 18, 2003 in respect of a plan of reorganization and of compromise and arrangement filed under the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act in respect of such predecessor corporation and certain of its subsidiaries ( the “Plan”);

     WHEREAS the articles of the Corporation provide, in accordance with the provisions of the Plan, for the Corporation’s right to redeem Second Preferred Shares in the capital of the Corporation for Units (as herein defined);

     WHEREAS for such purpose, the Corporation deems it necessary to create and issue Units in the manner provided herein;

     WHEREAS each Unit shall be comprised of a Note (as herein defined) and a Second Preferred Voting 2 Share (in the case of a Voting Unit) or Second Preferred Non-Voting 2 Share (in the case of a Non-Voting Unit), as the case may be, of the Corporation;

     WHEREAS each Unit shall constitute in all respects one instrument and shall be evidenced by one certificate evidencing the Note and the Second Preferred Voting 2 Share or Second Preferred Non-Voting 2 Share, as the case may be, comprised therein, which shall not be detachable and shall not be traded separately;

     WHEREAS the Corporation is duly authorized to create and issue the Units to be issued as provided herein;

     WHEREAS the foregoing recitals are made as representations and statements of fact by the Corporation and not by the Trustee; and

     WHEREAS the Trustee has agreed to enter into the Indenture and to hold all rights, interest and benefits contained herein for and on behalf of those persons who from time to time become holders of Units issued pursuant to the Indenture.

     NOW THEREFORE THIS INDENTURE WITNESSETH and it is hereby covenanted, agreed and declared as follows:

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ARTICLE 1

INTERPRETATION

Section 1.1     Definitions.

     In this Indenture, unless there is something in the subject matter or context inconsistent therewith:

“Accretion Amount” means, as at any particular date, the amount of interest accrued on a Note equal to the product obtained by the multiplication of (X) 0.045 by (Y) the Redemption Price as at the end of the immediately preceding semi-annual period (as calculated from time to time);

“Adjustment Period” has the meaning ascribed thereto in Section 7.1(3);

“Articles” means the articles of incorporation of the Corporation, as amended from time to time;

“Average Common Share Price” means, as at any particular date, the weighted average trading price per share on the TSX (or if not listed on the TSX, on any other Recognized Exchange on which such shares are traded) of the Class A Shares and Class B Shares during the twenty (20) consecutive trading days ending five (5) trading days prior to such date;

“Business Day” means a day, other than Saturday, Sunday or a statutory holiday, on which banks are generally open for business in Montreal, Quebec, Toronto, Ontario and New York, New York;

“Canadian” means a Canadian within the meaning ascribed to such term in the Canadian Telecommunications Common Carrier Ownership and Control Regulations SOR/94-667 enacted pursuant to the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time;

“Canadian Ownership and Control Provisions” means Canadian ownership and control provisions established in the Telecommunications Act (Canada) and the Radiocommunication Act (Canada) and regulations thereunder;

“Certificate of the Corporation” means a certificate signed in the name of the Corporation by either one of the President and Chief Executive Officer of the Corporation or the Chief Financial Officer of the Corporation, and may consist of one or more instruments so executed;

“Civil Code” means the Civil Code of Quebec which came into force on January 1, 1994 as amended or supplemented from time to time, together with any regulations thereunder;

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“Class A Shares” means the Class A Restricted Voting Shares in the capital of the Corporation.

“Class B Shares” means the Class B Non-Voting Shares in the capital of the Corporation.

“Corporation” means Microcell Telecommunications Inc. and includes any successor corporation to or of it which shall have complied with the provisions of Article 12;

“Counsel” means legal counsel(s) retained by the Trustee or retained by the Corporation and acceptable to the Trustee;

“Credit Facilities” means, collectively, the credit agreements governing the Tranche A Exit Facility, Tranche B Debt and Tranche C Loan, as amended, restated or supplemented from time to time;

“Current Market Price” means the closing trading prices per share of Class A Shares and Class B Shares, respectively, on any particular date (and if such date is not a Business Day, the last Business Day before such date);

“Date of Conversion” has the meaning ascribed thereto in Section 4.2(2);

“Director” means a director of the Corporation and reference to action by the Directors means action by the directors as a board or, whenever duly empowered, action by a committee of the board as a committee;

“Event of Default” has the meaning ascribed thereto in Section 10.1;

“Extraordinary Resolution” has the respective meanings ascribed thereto in Section 13.12 and Section 13.15;

“First Units” means the first units of the Corporation to be issued pursuant to that certain First Unit Indenture dated the date hereof between the Corporation and the Trustee as trustee thereunder;

“Fundamental Transaction” has the meaning ascribed thereto in Section 7.1(3);

“GAAP” means generally accepted accounting principles in Canada as in effect from time to time;

“Indenture Legislation” has the meaning ascribed thereto in Section 15.1;

“Inter-Creditor Agreement” means that certain Inter-Creditor and Collateral Agency Agreement dated as of May 1, 2003 entered into between the Corporation, Solutions, JP Morgan Chase Bank Toronto Branch, the lenders party to each of the Tranche A Exit Facility, Tranche B Debt and Tranche C Loan and the Trustee;

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“In-the-Money” means that, as of any particular trading day, the Class A Shares and Class B Shares continue to be listed and posted for trading on a Recognized Exchange and the Average Common Share Price as of such trading day is equal to or in excess of the then current Redemption Consideration.

“Maturity Date” means May 1, 2013;

“Non-Voting Shares” means Second Preferred Non-Voting 2 Shares in the capital of the Corporation;

“Non-Voting Unit” means a Unit which includes a Non-Voting Share;

“Notes” means the 9% convertible unsecured junior subordinated Second Notes due May 1, 2013, issued hereunder as part of the Units;

“Ordinary Course Dividend” means any dividend (payable in cash or securities, property or assets of equivalent value) declared payable on the Shares in any fiscal year of the Corporation and not exceeding, on an aggregate basis, the greater of (i) 10% of the equity of the holders of the Shares at the end of the fiscal year preceding the dividend declaration date and (ii) 150% of the average amount of dividends paid on the Shares in the preceding three (3) fiscal years;

“Person” means an individual, legal person, corporation, company, cooperative, partnership, trust, unincorporated association or governmental body, and pronouns have a similarly extended meaning;

“Principal Amount” means the principal amount of the Note included in a Unit determined in accordance with Section 2.1(4);

“Recognized Exchange” means the TSX or any other “prescribed Canadian stock exchange” within the meaning of the Income Tax Act (Canada);

“Redemption Consideration” has the meaning set forth in Section 3.1(1);

“Redemption Price” means, in respect of any Unit, the Principal Amount of the Note included in such Unit, as adjusted in accordance with Subsection 3.1(3);

“Residency Declaration” means a declaration by which a Unitholder certifies that it is or is not a Canadian, in the form attached in Schedule 1.1;

“SEC” means the U.S. Securities and Exchange Commission;

“Second Preferred Shares” means, collectively, the Second Preferred Non-Voting Shares and the Second Preferred Voting Shares;

“Second Preferred Non-Voting Shares” means the Second Preferred Non-Voting Shares in the capital of the Corporation;

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“Second Preferred Voting Shares” means the Second Preferred Voting Shares in the capital of the Corporation;

“Senior Liabilities” means:

(i)	secured indebtedness of the Corporation (other than indebtedness evidenced by the Units) whether outstanding on the date of this Indenture or thereafter created, incurred, assumed or guaranteed, for money borrowed or raised by the Corporation by whatever means (including, without limitation, by means of acceptances, debt instruments and finance leases and any liability evidenced by bonds, notes or similar instruments including outstanding subordinated perpetual debt);
(ii)	secured indebtedness of the Corporation whether outstanding on the date of this Indenture or thereafter created, incurred, assumed or guaranteed by the Corporation in connection with the acquisition by the Corporation or by others of any assets or services;
(iii)	all debts, liabilities and obligations at any time owing under any of the Tranche A Exit Facility, the Tranche B Debt and the Tranche C Loan; and
(iv)	renewals, extensions or refundings of any indebtedness referred to in (i) to (iii) of this definition;

unless in any case it is provided by the terms of the instrument creating or evidencing such indebtedness or an instrument pursuant to which such indebtedness is outstanding that such indebtedness does not rank prior in right of payment to the Notes but ranks pari passu with, or subordinate in right of payment to, the Notes;

“Share” means a Class A Share or Class B Share, as the case may be;

“Solutions” means Microcell Solutions Inc., a corporation amalgamated under the laws of Canada;

“Successor Corporation” has the meaning ascribed thereto in Section 12.1;

“TIA” means the Trust Indenture Act of 1939 (15 U.S Code 77aaa-77bbbb), as amended from time to time;

“this Indenture”, “this Trust Indenture”, “hereto”, “hereby”, “hereunder”, “hereof”, “herein” and similar expressions refer to this indenture and not to any particular Article, Section, Subsection, Paragraph, subdivision or other portion hereof, and include any and every supplemental indenture; and “supplemental indenture” and “Indenture supplemental hereto” include any and every instrument supplemental or ancillary hereto or in implementation hereof;

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“Tranche A Exit Facility” means the secured revolving credit facility in the aggregate principal amount of at least $25,000,000 and not more than $75,000,000 established in favour of Solutions pursuant to a certain credit agreement dated May 1, 2003 between inter alia, Solutions and JP Morgan Chase Bank as agent, as amended, restated or supplemented from time to time and includes any hedging arrangements entered into by Solutions in accordance with the provisions of such credit agreement;

“Tranche B Debt” means the certain term loan to Solutions consisting of a Canadian dollar series in the principal amount of Cdn$100,000,000 and a U.S. dollar series in the principal amount of the U.S. dollar equivalent of Cdn$200,000,000 pursuant to a certain credit agreement dated May 1, 2003 between, inter alia, Solutions and JP Morgan Chase Bank as agent, as amended, restated or supplemented from time to time;

“Tranche C Loan” means the secured non-revolving term loan to Solutions in the aggregate principal amount of $50,000,000 pursuant to a certain credit agreement dated May 1, 2003 between, inter alia, Solutions and JP Morgan Chase Bank, as agent, as amended, restated or supplemented from time to time;

“Trustee” means Computershare Trust Company of Canada or any successor thereto;

“TSX” means the Toronto Stock Exchange, a division of TSX Inc. through which the senior listing operations of TSX Group Inc. are conducted;

“Unit” means a unit consisting of a Note together with one Voting Share (a Voting Unit) or one Non-Voting Share (a Non-Voting Unit), as the case may be;

“Unit Certificate” means a certificate evidencing one or more Voting Units, substantially in the form attached hereto as Schedule 2.3(A) or one or more Non-Voting Units, substantially in the form attached hereto as Schedule 2.3(B);

“Unitholders” or “Holders” means the Persons for the time being entered in the registers mentioned hereinafter as holders of Units;

“Unitholders’ Request” means an instrument signed in one or more counterparts by the Holders of not less than 25% in Principal Amount of the outstanding Notes included in the Units requesting the Trustee to take the action or proceeding specified therein;

“U.S” means the United States of America, its territories or possessions, any state thereof or the District of Columbia collectively;

“U.S. Securities Act” means the U.S. Securities Act of 1933, as amended;

“Voting Shares” means Second Preferred Voting 2 Shares in the capital of the Corporation;

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“Voting Unit” means a Unit which includes a Voting Share; and

“Written Order of the Corporation”, “Written Request of the Corporation” and “Written Direction of the Corporation” mean, respectively, a written order, request or direction signed in the name of the Corporation by either of the President and Chief Executive Officer of the Corporation or the Chief Financial Officer of the Corporation, and may consist of one or more instruments so executed.

     Words importing the singular include the plural and vice versa and words importing the masculine gender include the feminine gender and vice versa.

Section 1.2     Meaning of “outstanding” for Certain Purposes.

     Every Unit certified and delivered by the Trustee hereunder shall be deemed to be outstanding until it shall be cancelled or delivered to the Trustee for cancellation, or a new Unit shall be issued in substitution therefore under Section 6.2, or moneys or shares for the payment thereof shall be set aside under Section 3.4 or Section 11.2, provided that:

(a)	where a new Unit has been issued in substitution for a Unit which has been mutilated, lost, stolen or destroyed, only one such Unit shall be counted for the purpose of determining the aggregate principal amount of Notes outstanding;
(b)	Units which have been partially redeemed, purchased or converted shall be deemed to be outstanding only to the extent of the unredeemed, unpurchased or unconverted part of the principal amount thereof;
(c)	for the purpose of any provision of this Indenture entitling Holders of outstanding Units to vote, sign consents, requests or other instruments, take other action or to constitute a quorum at any meeting of Holders under this Indenture, Units owned legally by the Corporation shall be disregarded, except that:

(i)	for the purpose of determining whether the Trustee shall be protected in relying on any such vote, consent, request or other instrument, other action or to constitute a quorum at any meeting of Holders, only the Units of which the Trustee has notice that they are so owned shall be so disregarded; and
(ii)	Units so owned which have been pledged in good faith other than to the Corporation shall not be so disregarded if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Units in his discretion free from the control of the Corporation.

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Section 1.3     Interpretation not Affected by Headings, etc.

     The division of this Indenture into Articles, Sections, Subsections and Paragraphs, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture.

Section 1.4     Statute References.

     Any reference in this Indenture to a statute shall be deemed to be a reference to such statute as amended, re-enacted or replaced from time to time.

Section 1.5     Monetary References.

     Except as otherwise stated, any reference in this Indenture to “Dollars”, “dollars” or the sign “$” shall be deemed to be a reference to lawful money of Canada.

Section 1.6     Day not a Business Day.

     In the event that any day on or before which any action is required to be taken or any computation is required to be made hereunder is not a Business Day, then such action or computation shall be required to be taken or made on or before the requisite time on the first Business Day thereafter.

Section 1.7     Invalidity of Provisions.

     Each of the provisions contained in this Indenture or the Units is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a Court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof.

Section 1.8     Governing Law.

     This Indenture and the Units shall be governed by and construed in accordance with the laws of the Province of Québec and the laws of Canada applicable therein and shall be treated in all respects as Québec contracts.

Section 1.9     Conflict.

     In the event there is any conflict between this Indenture and any Unit Certificate or any of the Schedules to this Indenture, the provisions of this Indenture shall govern and prevail.

Section 1.10     Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture refers to a provision of the TIA, the provisions shall be deemed incorporated by reference in and made a part of this Indenture.

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     All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute and not otherwise defined herein have the meanings so assigned to them therein.

Section 1.11     Trust Provisions.

     Notwithstanding the references herein or in any Units to this Indenture as a “Trust Indenture” or to Computershare Trust Company of Canada (or its successor hereunder, if any) as a “Trustee” and except for any trust which may be created or constituted in Quebec for the purposes of Section 3.5, Section 8.2(d) or Section 11.2 (and only to the extent contemplated by such Section), no trust within the meaning of Chapter II of Title Six of Book Four of the Civil Code is intended to be or is created or constituted hereby. In addition, for greater certainty and subject as hereinafter in this Section provided in the case of any trust created or constituted in Quebec for the purposes of Section 3.5, Section 8.2(d) or Section 11.2, the provisions of Title Seven of Book Four of the Civil Code shall not apply to any administration by the Trustee hereunder.

     Except as otherwise expressly provided or unless the context otherwise requires, references in this Indenture to “trust” or “in trust”, and other similar wording shall only refer to any trust that shall be created or constituted for the purposes of Section 3.5, Section 8.2(d) or Section 11.2, as the case may be, which trust shall, automatically upon the delivery by the Corporation of the amount referred to in the said Section 3.5, Section 8.2(d) or Section 11.2, as the case may be, be created or constituted either under Quebec law or under the law of any other appropriate jurisdiction and, if so created or constituted in Quebec, shall be subject to the provisions of the Civil Code applicable to trusts and, if so created or constituted in another appropriate jurisdiction, shall be subject to the trust laws of such jurisdiction. The administration of any such trust shall be governed by and in accordance with the provisions hereof which, to the extent permitted by applicable law, shall supersede any provisions relating to the administration of property of others or other similar provisions of any applicable law.

ARTICLE 2

THE UNITS AND NOTES

Section 2.1     Creation and Issue of Units and Notes.

(1)	Creation of Units. A maximum number of 7,200,371 Units is hereby created and authorized for issue, issuable as Voting Units or Non-Voting Units, as the case may be.
(2)	Issuance of Units. The Corporation may issue Units to Unitholders upon any redemption of Second Preferred Voting Shares or Second Preferred Non-Voting Shares, as the case may be, in accordance with the provisions of the Articles. Upon any such redemption, a holder of Second Preferred Voting Shares shall be issued Voting Units and a holder of Second Preferred Non-Voting Shares shall be issued Non-Voting Units.
(3)	Ranking. Holders of Voting Units and Non-Voting Units shall rank pari passu in all respects.

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(4)

Principal Amount of Notes. Each Voting Unit shall include one Voting Share and one Note in a principal amount (“Principal Amount”) equal to the redemption price of the Second Preferred Voting Share (as determined in accordance with the Articles) in respect of which a Voting Unit is to be issued, as at the date of redemption therefor. Each Non-Voting Unit shall include one Non-Voting Share and one Note in a Principal Amount equal to the redemption price of the Second Preferred Non-Voting Share (as determined in accordance with the Articles) in respect of which a Non-Voting Unit is to be issued, as at the date of redemption therefor.

By way of example only and for greater clarity, a holder of 100 Second Preferred Shares shall, upon redemption thereof, be entitled to receive 100 Units (Voting or Non-Voting, as the case may be) which Units shall include 100 Notes having in the aggregate a Principal Amount equal to the aggregate redemption price of the Second Preferred Shares being redeemed together with 100 Voting Shares or Non-Voting Shares, as the case may be.

Section 2.2     Term of Units.

     Units shall be dated the date of the redemption of the Second Preferred Voting Shares or Second Preferred Non-Voting Shares, as the case may be, in consideration of the redemption of which Units are issued hereunder and shall mature, regardless of their date of issuance, on the Maturity Date.

Section 2.3     Form of Unit Certificates.

(1)

Form. The Unit Certificates evidencing the Voting Units and Non-Voting Units shall be substantially in the forms set out in Schedule 2.3(A) (Voting Units) and Schedule 2.3(B) (Non-Voting Units) to this Indenture with such appropriate additions, deletions, substitutions and variations as the Trustee may approve and shall bear such distinguishing letters and numbers as the Trustee may approve, such approval of the Trustee to be conclusively evidenced by its certification of the Unit Certificates.

(2)

Production. The Unit Certificates may be engraved, lithographed or printed (the expression “printed” including for purposes hereof both original typewritten material as well as mimeographed, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Corporation may determine.

Section 2.4     Signature of Unit Certificates.

(1)	Signing Officers. The Unit Certificates will be signed by one of the President, Chief Financial Officer, a Vice-President or Secretary of the Corporation or by any other individual to whom such signing authority is delegated by the Directors of the Corporation from time to time.
(2)	Signatures. The signatures of any of the officers or individuals referred to in Section 2.4(1) hereof may be manual signatures, engraved, lithographed or printed in facsimile and Unit Certificates bearing such facsimile signatures will, subject to

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Section 2.5 hereof, be binding on the Corporation as if they had been manually signed by such officers or individuals.

(3)

No Longer Officer. Notwithstanding that any person whose manual or facsimile signature appears on a Unit Certificate as one of the officers or individuals referred to in Section 2.4(1) hereof no longer holds the same or any other office with the Corporation at the date of issue of any Unit Certificate or at the date of certification or delivery thereof, such Unit Certificate will, subject to Section 2.5 hereof, be valid and binding on the Corporation.

Section 2.5     Certification by Trustee.

(1)

Certification. No Unit Certificate shall be issued or, if issued, shall entitle the Holder thereof to the benefits of this Indenture until it has been certified by manual signature by or on behalf of the Trustee. Such certificate on any Unit Certificate shall be conclusive evidence that the Units evidenced thereby are duly issued and are valid obligations of the Corporation. Unit Certificates may forthwith and from time to time be executed by the Corporation and delivered to the Trustee and shall be certified by the Trustee and delivered pursuant to a Written Order of the Corporation, without the Trustee receiving any consideration therefore.

(2)

No Representation or Warranty. The certificate of the Trustee on any Unit Certificates shall not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or of the Units evidenced thereby (except the due certification thereof) and the Trustee shall in no respect be liable or answerable for the use made of the Unit Certificates or any of them or the proceeds thereof.

Section 2.6     Notes and Shares not Detachable.

(1)	Composition. A Voting Unit shall consist of one Note together with one Voting Share and a Non-Voting Unit shall consist of one Note together with one Non-Voting Share.
(2)	Notes and Shares as One Instrument. The Notes and the Voting Shares or Non-Voting Shares, as the case may be, included in the Units shall not be split, combined, exchanged or transferred separately from the Units of which they form part and shall be evidenced by the Unit Certificate in respect of such Units.

Section 2.7     Units to Rank Equally.

     Each Unit, as soon as it is issued shall, subject to the terms hereof, be equally and rateably entitled to the benefits hereof as if all the Units had been issued and negotiated simultaneously.

Section 2.8     Interest on Notes.

     Each Note shall bear interest from and including the date of issuance of the Unit of which it forms part hereunder at the rate of 9% per annum. No accrued interest shall be payable on the Notes, other than upon redemption or at maturity of the Units of which it forms

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part, and shall instead be part of an adjustment to the Redemption Price as provided in Section 3.1(3).

Section 2.9     Payments in Respect of Units.

(1)

Payment by Cheque. Payments on the Units, if any, shall be made by cheque (less any tax required by law to be deducted) payable to the order of the Holder and negotiable at par and forwarded to such Holder, by first class mail, postage prepaid (or in the event of mail service interruption, by such other means as the Trustee and the Corporation shall determine to be appropriate) to the Holder at his last address appearing on the appropriate register of Holders. The forwarding of such cheque shall satisfy and discharge the liability of the Corporation to the extent of the sum represented thereby (plus the amount of any tax deducted as aforesaid) unless such cheque is not paid on presentation. In the event that such cheque is not received by the Holder or is lost or destroyed prior to being cashed, the Corporation (or the Trustee at the request of the Corporation), upon being furnished with evidence of non-receipt, loss or destruction and indemnity reasonably satisfactory to it, shall issue or cause to be issued to such Holder a replacement cheque for the amount of such cheque.

(2)

Registered in More than One Name. Where Units are registered in more than one name, payments in respect of such Units shall be paid by cheque payable to the order of all such Holders, unless the Corporation has received written instructions from them to the contrary, and the receipt of any one of such Holders therefor shall be a valid receipt on behalf of the Holders with respect thereto and shall discharge the Trustee, any registrar of Units and the Corporation from their obligations with respect thereto.

ARTICLE 3

REDEMPTION

Section 3.1     Redemption.

     The Units may be, or will be, redeemed in the following circumstances, provided that, for greater certainty, a redemption of Units hereunder means and refers to the redemption of the Notes included in such Units in accordance with the terms of this Article 3 and to the concurrent redemption of the Voting Shares or Non-Voting Shares, as the case may be, included in such Units redeemed in accordance with the Articles:

(1) At the option of the Corporation. Subject to Article 5, a Unit may be redeemed, in whole or in part, at any time prior to the Maturity Date, at the option of the Corporation, at a price equal to the sum of (i) the then current Redemption Price of the Note included in such Unit, as adjusted in accordance with Section 3.1(3) and (ii) the redemption price of the Second Preferred Share included in such Unit determined in accordance with the Articles (collectively, the “Redemption Consideration”), payable in cash, provided however that the Holder thereof may be entitled to exercise the conversion rights attached to such Unit as set forth in Article 4 prior to such redemption, by way of an instrument given in accordance with Article 4 within 20 days of receipt of the notice of redemption provided in Section 3.6.

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(2) Mandatorily. A Unit shall be redeemed mandatorily:

(a)

at the Maturity Date (i) at a price equal to the then current Redemption Consideration, payable in cash; or (ii) at the option of the Corporation, if the Class A Shares and the Class B Shares are then listed and posted for trading on a Recognized Exchange, into such number of Class A Shares (in the case of Voting Units) or Class B Shares (in the case of Non-Voting Units) as is equal to the quotient obtained by dividing the then current Redemption Consideration by the Average Common Share Price; and

(b)

at any time, in whole or in part, to the extent that the Corporation has monies available for such purpose in accordance with the provisions of Article 5.

(3) Adjustment to Redemption Price. On November 1^st and May 1^st of every year, starting on the first November 1^st following the issue of Units hereunder, the Redemption Price shall be increased by an amount equal to the Accretion Amount. In the event of any redemption or conversion of Units other than as at such dates, the Accretion Amount shall be adjusted on a pro rata basis with reference to the number of days from the date of the last increase of the Redemption Price.

Section 3.2     Partial Redemption of Units.

(1)	Notice to Trustee. If less than all the Units are to be redeemed, the Corporation shall in each such case, at least 15 days before the date upon which a notice of redemption is to be given, notify the Trustee by Written Direction of the Corporation of its intention to redeem Units and of the aggregate principal amount of Units to be redeemed.
(2)	Pro Rata Redemption. If less than all the Units are to be redeemed, the Units shall be redeemed on a pro rata basis based on the Principal Amount of the Notes comprised therein.
(3)	Unit Certificate. The Holder of a Unit called for redemption in part only, upon surrender of the Unit Certificate representing such Unit for payment, shall be entitled to receive, without expense to such Holder, a Unit Certificate evidencing the new Principal Amount of the Note comprised in such Unit, being an amount equal to the then current Redemption Price as at the redemption of such Unit less the amount of the payment made to the Holder on account of the partial redemption, and the Corporation shall execute and the Trustee shall certify and deliver, at the expense of the Corporation, such Unit Certificate upon receipt of the Unit Certificate representing the Unit so surrendered.

Section 3.3     Units Due on Redemption Dates.

(1) Units Due on Redemption Dates. Subject to Section 3.2(3), Units called for redemption shall thereupon become due and payable on the redemption date specified in the notice provided pursuant to Section 3.6, in the same manner and with the same effect as if it were the Maturity Date, notwithstanding anything contained herein to the contrary, and from and after such redemption date, if the moneys or Class A Shares or Class B Shares,

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	as the case may be, necessary to redeem such Units shall have been deposited as hereinafter provided and affidavits or other proof satisfactory to the Trustee as to the mailing of such notices shall have been delivered to it, such Units shall not be considered as outstanding hereunder.
(2)	Decision of Trustee Final. If any question shall arise as to whether notice of redemption or deposit of the redemption monies or Class A Shares or Class B Shares, as the case may be, has been given or made as provided above, such question shall be decided by the Trustee whose decision shall be final and binding upon all parties in interest.

Section 3.4     Deposit of Redemption Amounts

     Upon Units having been called for redemption in accordance with this Article 3, the Corporation shall deposit with the Trustee, prior to the redemption date fixed in the relevant notice of redemption, the sums payable upon redemption, or Class A Shares or Class B Shares, as the case may be, in respect of the Units to be redeemed, together with a sum sufficient to satisfy estimated charges and expenses which may be incurred by the Trustee in connection with such redemption. From the sums or shares so deposited, the Trustee shall deliver or cause to be delivered to the Holders, upon surrender of the Units called for redemption, the sums or shares to which they are respectively entitled on redemption.

Section 3.5     Failure to Surrender Units Called for Redemption.

     If a Holder of any Units called for redemption shall, within 30 days from the date fixed for redemption, fail to surrender the Unit Certificates in respect of such Units or shall not within such time accept delivery of the sums payable or shares issuable in respect thereof or give such receipt therefor, if any, as the Trustee may require, such sums or shares shall be set aside in trust for such Holder, in accordance with Article 15, and such setting aside shall for all purposes be deemed a payment to the Unitholder of the sum, Class A Shares or Class B Shares, as the case may be, so set aside, and the Units shall thereafter not be considered as outstanding hereunder and the Unitholder shall have no right except to receive such sums or certificates representing the Class A Shares or Class B Shares, as the case may be, or, in the event of a partial redemption only, a Unit Certificate issued in accordance with Section 3.2(3), upon surrender of his Unit Certificates, without interest thereon.

Section 3.6     General Requirements.

(1)	Notice.
	Notice of intention to redeem any Units shall be given by or on behalf of the Corporation to the Unitholders which are to be redeemed, not more than 60 days and not less than 30 days prior to the date fixed for redemption, in the manner provided in Article 14.
(2)	Content of Notice. The notice to the Unitholders to be given by the Corporation shall:

(a) state that the Corporation has exercised its option to redeem Units pursuant to Section 3.1(1) or that Units are subject to mandatory redemption pursuant to Section 3.1(2);

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(b)	state if the Units are to be redeemed in whole or in part, and shall specify the redemption date, the Redemption Consideration or, if in part only, that part of the then current Redemption Consideration payable in respect of the Units to be redeemed, and places of payment and shall state that all interest on the Units called for redemption shall cease to accrue from and after such redemption date;
(c)	in the event of a mandatory redemption at the Maturity Date, state that the Corporation has exercised its option to pay the aggregate principal amount payable to the Unitholders, (i) in cash or (ii) by the issuance of Class A Shares or Class B Shares, as the case may be, to the Unitholders;
(d)	state that to receive the consideration payable upon redemption, the Unitholders must surrender their Unit Certificates to the Trustee at its principal corporate actions offices in the city of Toronto;
(e)	in the case of a redemption in consideration of the issuance of Class A Shares or Class B Shares, advise each Unitholders that the Class A Shares or Class B Shares, as the case may be, to be issued in respect of such Unitholder’s Units will be registered in the name of the Holder unless the Trustee, or its agent, receives from such Holder, on or before the tenth Business Day prior to the Maturity Date at the corporate actions trust office of the Trustee in Toronto, written notice in form and execution satisfactory to the Trustee directing the Corporation to register such Class A Shares or Class B Shares in some other name or names and stating such name or names (with addresses); and
(f)	advise each Holder that such Holder may, on or after the Maturity Date, and on proof of identity satisfactory to the Trustee, take personal delivery of a certified cheque issued to such Holder representing the Redemption Consideration (or, if a partial redemption, the sums payable on account of the partial redemption) or the share certificates representing that Holder’s Class A Shares or Class B Shares to be issued, as the case may be, at the corporate actions trust office of the Trustee in Toronto.

(3) Delivery of Certificates. Upon any redemption of Units hereunder, the Corporation will:

(a) cause to be sent to each Holder in respect of which Units have been surrendered in accordance with the requirements of the notice given pursuant to Section 3.6(1), at the address of the Holder as shown on the records of the Corporation, by prepaid ordinary insured mail (or in the event of mail service interruption by such other means as the Trustee and the Corporation will determine to be appropriate) a certified cheque issued to such Holder representing the sums payable upon redemption or share certificates for Class A Shares or Class B Shares, as the case may be, in the name of such Holder or, if the Trustee has received the written notice and any payment contemplated by Section 3.6(2)(e) in the name of such other Person or Persons as are identified in such written notice; or

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(b) make available for personal delivery, on proof of identity satisfactory to the Trustee, a certified cheque issued to such Holder representing the sums payable upon redemption or share certificates for Class A Shares or Class B Shares, as the case may be, in the name of such Holder or, if the Trustee has received the written notice and any payment contemplated by Section 3.6(2)(e) in the name of such other Person or Persons as are identified in such written notice.

Section 3.7     No Requirement to Issue Fractional Shares.

     The Corporation shall not be required to issue fractional Class A Shares or Class B Shares pursuant to this Article 3. If any fractional interest in a Class A Share or a Class B Share would, except for the provisions of this Section 3.7, be deliverable upon any redemption of Units, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the registered holder of such shares an amount in lawful money of Canada equal (computed to the nearest cent) to an identical fraction of the Average Common Share Price on the applicable redemption date.

Section 3.8     Cancellation of Unit Certificates.

     Subject to Section 3.2(3), all Unit Certificates in respect of Units redeemed hereunder shall forthwith be delivered to the Trustee and shall be cancelled by it and no Unit Certificates shall be issued in substitution therefore.

ARTICLE 4

CONVERSION

Section 4.1     Conversion Rights

The Units may be, or will be, converted in the following circumstances, provided that, for greater certainty, a conversion of Units hereunder means and refers to the conversion of the Notes included in such Units in accordance with the terms of this Article 4 and to the concurrent redemption of the Voting Shares or Non-Voting Shares, as the case may be, included in such Units redeemed in accordance with the Articles:

(a)

at any time and from time to time, at the option of the Holder, a Note included in a Unit may be converted into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit);

(b)

if at any time prior to May 1, 2008, the Corporation shall complete an offering of Class A Shares and/or Class B Shares for gross proceeds of not less than $150,000,000 and at a per share price equal to or greater than 200% of the then current Redemption Consideration and the proceeds thereof are used as provided in Article 5, then a Note included in a Unit which remains outstanding after the application of such proceeds may be converted, at the option of the Corporation, at any time thereafter, into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit);

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(c)

at any time on or after May 1, 2008, if, on the 25th day (or if such day is not a trading day, then on the next following trading day) after the date of the press release of the Corporation announcing its quarterly or annual financial results, as the case may be, the Units are In-the-Money, each Note included in a Unit will automatically be converted, by way of notice given pursuant to Section 4.2(2), into one Class A Share (in the case of a Voting Unit) or one Class B Share (in the case of a Non-Voting Unit); and

(d)

a Non-Voting Unit may be converted into one Voting Unit and a Voting Unit may be converted into one Non-Voting Unit, at the option of the Holder, exercisable at any time, upon compliance with the provisions of Subsection 4.2(1) and, in the case of a Holder of Non-Voting Unit, by also submitting a duly executed and completed Residency Declaration of the Holder whereby such Holder attests that he is a Canadian.

Section 4.2     Manner of Exercise of Right to Convert.

(1)	Conversion by Holder. The Holder of a Unit wishing to convert such Unit in whole or in part into Class A Shares or Class B Shares, as the case may be, pursuant to Section 4.1(a) or Section 4.1(d), shall surrender its Unit Certificate to the Trustee, at the corporate actions trust office of the Trustee in Toronto with the conversion form appearing thereon or appended thereto duly executed by the Holder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in form and substance satisfactory to the Trustee, irrevocably exercising his right to convert such Unit in accordance with the provisions of this Article 4 (and, in the case of a Holder of a Non-Voting Unit exercising a conversion right pursuant to Section 4.1(d), accompanied by a duly executed and completed Residency Declaration attesting that such Holder is a Canadian). Thereupon such Unitholder or, subject to compliance with all reasonable requirements of the Trustee, his nominee or assignee shall be entitled to be entered in the records of the Corporation as at the Date of Conversion (as defined in Section 4.2(2)) (or such later date as is specified in Section 4.2(2)) as the holder of the number of Class A Shares or Class B Shares, as the case may be, into which such Unit is convertible in accordance with the provisions hereof and, as soon as practicable thereafter, the Corporation shall deliver to such Unitholder or, subject as aforesaid, his nominee or assignee, a certificate for such Class A Shares or Class B Shares, as the case may be.
(2)	Notice by Corporation. The Corporation shall notify the Trustee by Written Direction of the Corporation immediately after a determination by the Corporation that the Notes included in the Units are convertible pursuant to Section 4.1(b) or Section 4.1(c). Notice of intention to convert any Notes included in the Units shall be provided by the Corporation to the Unitholders concurrently with such Written Direction of the Corporation to the Trustee, in the manner set forth in Article 14.
(3)	Deemed Surrender. For the purposes hereof, a Unit shall be deemed to be surrendered for conversion on the date (the “Date of Conversion”) on which it is so surrendered in accordance with the provisions hereof and, in the case of a Unit so surrendered by mail or other means of delivery, on the date on which the Unit Certificate is received by the

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	Trustee at the corporate actions trust office of the Trustee in Toronto, provided that if a Unit is surrendered for conversion on a day on which the register of Class A Shares or Class B Shares is closed, the Person entitled to receive Class A Shares or Class B Shares shall become the holder of record of such Class A Shares or Class B Shares as at the date on which such register is next reopened and provided that if a Unit is surrendered for conversion on the date of redemption of any Unit or during the 10 preceding Business Days, such Unit shall be deemed to be surrendered for conversion on the redemption date.
(4)	Partial Conversion. The Holder of any Units of which part only is converted shall, upon the exercise of its right of conversion, surrender its Unit Certificate(s) to the Trustee, and the Trustee shall cancel the same and shall, without charge, forthwith certify and deliver to the Holder new Unit Certificate(s) representing a number of Units equal to the unconverted part of the Units so surrendered.
(5)	No Right to Receive Accrued and Unpaid Interest. The Holder of Units surrendered for conversion in accordance with this Section 4.2 shall not be entitled to any payment on account of the Redemption Consideration or of interest.
(6)	Right to Receive Dividends. The holders of Class A Shares and Class B Shares issued upon conversion shall be entitled to receive dividends in respect thereof only if such dividends are declared in favour of holders of record of Class A Shares and Class B Shares on and after the Date of Conversion or such later date as such Holder shall become the holder of record of such Class A Shares and Class B Shares pursuant to Section 4.2(2), from which applicable date they will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Class A Shares and Class B Shares.

Section 4.3     Corporation to Reserve Shares.

     The Corporation covenants that it will at all times reserve and keep available out of its authorized Class A Shares and Class B Shares (if the number thereof is or becomes limited) solely for the purpose of issue upon conversion of Units as provided herein, and issue to Holders of Units who may exercise their conversion rights hereunder, such number of Class A or Class B Shares as shall then be issuable upon the conversion of all outstanding Units. All Class A Shares and Class B Shares which shall be so issuable shall be duly and validly issued as fully paid and non-assessable.

Section 4.4     Taxes and Charges on Conversion.

     The Corporation will from time to time promptly pay or make provision satisfactory to the Trustee for the payment of all taxes and charges which may be imposed by the laws of Canada or any province thereof (except income tax or security transfer tax, if any) which shall be payable with respect to the issuance or delivery of Class A Shares and Class B Shares to the Holders of Units upon the exercise of their right of conversion pursuant to the terms of the Units and of this Indenture.

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Section 4.5     Cancellation of Converted Units.

     All Unit Certificates representing Units converted in whole or in part shall be forthwith delivered to and cancelled by the Trustee and, subject to Section 4.2(4), no Unit Certificates shall be issued in substitution therefor.

Section 4.6     Notice of Expiry of Conversion Right.

     The Corporation covenants that, so long as any Units remain outstanding, it will give notice to the Trustee and the Unitholders in the manner provided in Article 14, not less than 21 days prior to a date fixed for redemption of Units, of the expiry of the right of the Unitholders to convert their Units.

Section 4.7     Revival of Right to Convert.

     If the Corporation shall fail to redeem any Units which has been called for redemption upon due surrender of such Units, any right to convert such Units as provided in this Article 4 shall revive and continue as if such Units had not been called for redemption.

Section 4.8     No Requirement to Issue Fractional Shares.

     The Corporation shall not be required to issue fractional Class A Shares or Class B Shares pursuant to this Article 4. If any fractional interest in a Class A Share or a Class B Share would, except for the provisions of this Section 4.8, be deliverable upon any conversion of Units, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the registered holder of such shares an amount in lawful money of Canada equal (computed to the nearest cent) to an identical fraction of the Average Common Share Price on the applicable Date of Conversion.

Section 4.9     Conversion subject to U.S. Securities Act Requirements

     All conversion rights provided for in this Article 4 are subject to a registration statement having been filed by the Corporation and having been declared effective by the SEC under the U.S. Securities Act or an exemption being available under the U.S. Securities Act in connection with the issuance of Shares resulting from the exercise of such conversion rights.

ARTICLE 5

CERTAIN RESTRICTION ON INTEREST PAYMENTS AND REDEMPTION

Section 5.1     Incorporation of Inter-Creditor Agreement by reference

     For purposes of this Section 5.1, terms with a capitalized first letter not otherwise defined in this Indenture shall have the meaning ascribed thereto in the Inter-Creditor Agreement.

     Section 2.2 of the Inter-Creditor Agreement provides for certain payments to be made on account of redemption of Units if there is Excess Cash Flow in any fiscal year of the Corporation, if the Corporation receives Net Proceeds from an Asset Disposition, or if the Corporation receives Net Proceeds from the issuance of Equity Securities. The Corporation

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hereby covenants to comply with its obligations under the Inter-Creditor Agreement (including all payments to be made thereunder).

ARTICLE 6

REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF UNITS

Section 6.1     Registration and Transfer of Units.

(1)	Register. The Corporation shall cause to be kept by the Trustee and at the corporate actions trust office of the Trustee in Toronto a central register and in such other place or places, or by such other registrar or registrars, if any, as the Corporation with the approval of the Trustee may designate, branch registers, in which shall be entered the names and latest known addresses of the Holders of Units, the particulars of all transfers of Units and such other particulars of the Units, as may be prescribed by law. Such registration shall be noted on the Units by the Trustee or other registrar.
(2)	Inspection of registers. The registers referred to in this Section 6.1 shall at all reasonable times be open for inspection by the Corporation, the Trustee and any Unitholders.
(3)	Transfer. No transfer of Units shall be effective as against the Corporation unless made on one of the registers by the Unitholder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in form and execution satisfactory to the Trustee and upon compliance with such requirements as the Trustee or other registrar may prescribe, and unless such transfer shall have been duly noted on such Units by the Trustee or the registrar. The Unitholders may at any time and from time to time have such Units transferred at any of the places at which a register is kept pursuant to the provisions of this Section 6.1 in accordance with such reasonable regulations as the Trustee may prescribe. The Unitholder may at any time and from time to time have the registration of its Units transferred from the register in which the registration thereof appears to another register maintained in another place authorized for that purpose under the provision of this Indenture upon payment of a reasonable fee to be fixed by the Trustee.
(4)	No Notice of Trusts. Neither the Corporation, nor the Trustee, nor any registrar shall be bound to take notice of or to see to the execution of any trust, whether express, implied or constructive, in respect of any Units and the Trustee and any registrar may transfer any Units on the direction of the Holder thereof, whether named as Trustee or otherwise, as though that Person were the beneficial owner thereof.
(5)	Location of Registers. Except in the case of the central register required to be kept at the corporate actions trust office of the Trustee in Toronto, the Corporation shall have power at any time to close any branch register, in which event it shall transfer the records thereof to another existing register or to a new register, and thereafter such Units shall be deemed to be registered on such existing or new register, as the case may be. In the event that the register in any place is closed and the records transferred to a register in another place, notice of such change shall be given to the Holders of the Units registered in the register so closed and the particulars of such change shall be recorded in the

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	central register required to be kept at the corporate actions trust office of the Trustee in Toronto.
(6)	List of Unitholders. Every registrar shall, when requested to do so by the Corporation or the Trustee, furnish the Corporation or the Trustee, as the case may be, with a list of the names and addresses of the Unitholders showing the serial numbers of Units held by each Holder.

Section 6.2     Exchange of Units.

(1)	Exchange and Place of Exchange. Unit Certificate(s) may be exchanged for one or more Unit Certificate(s) of different denomination or denominations evidencing in the aggregate the same number of Units as the Unit Certificate(s) being exchanged.
(2)	Place of Exchange. Exchanges of Units may be made at the corporate actions trust office of the Trustee in Toronto. Any Unit certificates tendered for exchange shall be surrendered to the Trustee and shall be cancelled. The Corporation shall execute, and the Trustee shall certify, all Unit Certificates necessary to carry out such exchanges.
(3)	Redemption. Units issued in exchange for Units which at the time of such issue have been selected or called for redemption at a later date shall be deemed to have been selected or called for redemption in the same manner as the Units for which they were exchanged and, upon issuance of such Units the Trustee shall note thereon a statement to that effect.
(4)	Fees. Except as otherwise provided herein, upon any exchange of Units, the Trustee or other registrar of Units may charge the Holder or the transferor such reasonable fee as may be necessary to discharge any stamp tax, security transfer tax or other governmental charge required to be paid and payment of such charges shall be made by the party requesting such exchange or transfer as a condition precedent thereto.
(5)	No Exchange. Neither the Corporation, the Trustee nor any other registrar of Units shall be required to exchange any Units on the day of any selection by the Trustee of any Units to be redeemed.

Section 6.3     Ownership of Units.

(1)

Deemed Ownership. The Unitholders shall be deemed to be the owner thereof for all purposes of this Indenture and payment of or on account of the principal of, and interest on, the Notes shall be made only to or upon the order in writing of the Holder of the Units and such payment shall be complete satisfaction for the amounts so paid and discharge to the Trustee, any registrar of Units and the Corporation for the amounts so paid.

(2)

No Compensation or Set-off. The Holder of any Units shall be entitled to payments thereon, free from all rights of compensation, set-off or counterclaim between the Corporation and any prior Holder and all Persons may act accordingly. A transferee of a Unit shall, upon compliance with all of the requirements for the transfer of Units set

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out in this Indenture, in the Units or established by the Trustee or the Corporation pursuant thereto and any other requirements of law with respect to such transfer, be entitled to be entered on the appropriate register or on any one of the appropriate registers as the owner of such Units, free from all rights of compensation, set-off or counterclaim between the Corporation and the transferor or any previous Holder thereof.

Section 6.4     Issue in Substitution for Lost Certificates.

(1)

Substitution. If any Unit Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to Section 6.4(2) hereof, will issue, and thereupon the Trustee will certify and deliver, a new Unit Certificate of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and on surrender and cancellation of such mutilated certificate or in lieu of and in substitution for such lost, destroyed or stolen certificate.

(2)

Cost of Substitution. The applicant for the issue of a new Unit Certificate pursuant to this Section 6.4(2) will bear the reasonable cost of the issue thereof and in the case of loss, destruction or theft will, as a condition precedent to the issue thereof:

(a)	furnish to the Corporation and to the Trustee such evidence of ownership and of the loss, destruction or theft of the Unit Certificate to be replaced as is satisfactory to the Corporation and to the Trustee in its discretion, acting reasonably;
(b)	if so requested, furnish an indemnity in amount and form satisfactory to the Corporation and to the Trustee in its discretion, acting reasonably; and
(c)	pay the reasonable charges of the Corporation and the Trustee in connection therewith.

ARTICLE 7

ADJUSTMENTS

Section 7.1     Adjustments

(1)	Adjustment.
	The rights of the Unitholders, including in relation to the number of Shares issuable upon the redemption or conversion of Units, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Article, and for such purposes and as used in this Section, (i) “Adjustment Period” means the period commencing immediately after the issuance of Units hereunder and ending at the Maturity Date, and (ii) “Share Rate” means the rate at which the Shares are issuable upon the redemption or conversion of Units.
(2)	Share Rate.

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The Share Rate in effect at any date will be subject to adjustment from time to time as follows:

(a) If and whenever at any time during the Adjustment Period, the Corporation shall:

(i)	subdivide or redivide the outstanding Shares into a greater number of Shares;
(ii)	consolidate, combine or reduce the outstanding Shares into a lesser number of Shares; or
(iii)	issue Shares to all or substantially all of the holders of Shares by way of a stock dividend or other distribution (other than an Ordinary Course Dividend),

then, in each such event, the Share Rate will, on the effective date of or the record date for such event, be adjusted by multiplying the Share Rate in effect immediately prior to such date by a fraction:

(i)	the numerator of which shall be the total number of Shares outstanding on such date after giving effect to such event; and
(ii)	the denominator of which shall be the total number of Shares outstanding on such date before giving effect to such event.

Such adjustment will be made successively whenever any such event shall occur. Any such issue of Shares by way of a stock dividend or other distribution shall be deemed to have been made on the record date for such stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under Section 7.1(2)(b) and Section 7.1(2)(c).

(b)

If and whenever, at any time during the Adjustment Period, the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of Shares entitling the holders thereof, within a period expiring not more than 50 days after the record date for such issue, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such issuance, then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i) the numerator of which shall be the total number of Shares outstanding on such record date plus the total number of additional Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable); and

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(ii) the denominator of which shall be the aggregate of (A) the number of Shares outstanding on such record date and (B) a number determined by dividing the aggregate subscription or purchase price of the total number of additional Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by the Current Market Price as of the applicable record date.

Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon the number of Shares (or securities convertible into or exchangeable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

(c)

If and whenever at any time during the Adjustment Period the Corporation shall fix a record date for the making of a distribution to all or substantially all of the holders of Shares of:

(i)	shares of any class other than Shares, whether of the Corporation or any other corporation;
(ii)	rights, options or warrants other than rights options or warrants referred to in Section 7.1(2)(b);
(iii)	evidence of indebtedness; or
(iv)	cash, securities or other property or assets (other than an Ordinary Course Dividend);

then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)

the numerator of which shall be the total number of Shares outstanding on such record date multiplied by the Current Market Price on such record date; and

(ii)

the denominator of which shall be (A) the product of the number of Shares outstanding on such record date and the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such distribution reduced by (B) the aggregate fair market value (as determined by the directors at the time such distribution is authorized) of such shares or rights, options or

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warrants or evidences of indebtedness or cash, securities or other property or assets to be so distributed.

Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be.

(d)

In the absence of a resolution of the directors fixing a record date for any event referred to in this Section, the Corporation shall be deemed to have fixed as the record date therefor the earlier of the date on which holders of record of Shares are determined for the purpose of participating in such event and the date on which such event becomes effective.

(3) Fundamental Transactions.

(a)

If and whenever at any time during the Adjustment Period, there is (i) any reclassification of the Shares at any time outstanding or any change of the Shares into other shares, securities or property of the Corporation, or any other capital reorganization of the Corporation of similar effect, (ii) any amalgamation, arrangement, merger or other form of business combination of the Corporation with or into any other corporation resulting in any reclassification of the outstanding Shares or change of the Shares into other shares, securities or property of the Corporation or such other corporation, or (iii) any sale, lease, exchange or transfer all or substantially all of the undertaking or assets of the Corporation and/or the Subsidiaries of the Corporation to another corporation or entity not wholly-owned by the Corporation (each of the transactions contemplated in (i), (ii) and (iii), hereinafter, a “Fundamental Transaction”), then, in each such event, each Holder of a Unit which is thereafter redeemed or converted for Shares will be entitled to receive, and shall accept, in lieu of the number of Shares to which such Holder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such Holder would have been entitled to receive as a result of the Fundamental Transaction if, on the effective date thereof, such Holder had been the registered holder of the number of Shares to which such Holder was theretofore entitled upon such redemption or conversion.

If necessary as a result of any Fundamental Transaction, appropriate adjustments will be made in the application of the provisions set forth in this Section with respect to the rights and interests thereafter of the Holders to the end that the

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	provisions set forth in this Section will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares or other securities or property thereafter deliverable upon a redemption or conversion of Units for Shares. Any such adjustments will be made by and set forth in an indenture supplemental hereto approved by the Corporation and by the Trustee and shall for all purposes be conclusively deemed to be an appropriate adjustment.
(b)	Adjustments Cumulative. The adjustments provided for in this Section are cumulative.
(c)	Resolution of Questions. In the event of any question arising with respect to the adjustments provided for in this Section, such questions shall be conclusively determined by the Corporation’s auditors or, if they are unable or unwilling to act, by such firm of chartered accountants as is appointed by the Corporation and acceptable to the Trustee. Such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Trustee and the Holders.
(d)	Additional Actions. As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section, the Corporation will take any action which may, in the opinion of counsel to the Corporation be necessary in order that the Corporation, or any successor to the Corporation or successor to the undertaking or assets of the Corporation, will be obligated to and may validly and legally issue all of the Shares or other shares, securities or property which the Holders would be entitled to receive upon a redemption or conversion of Units.
(e)	Notice to Trustee. As soon as possible after the effective date of any event referred to in this Section that requires or might require an adjustment hereunder, the Corporation will notify the Trustee by Written Direction of the Corporation of the particulars of such event and, to the extent determinable, any adjustment required and the computation of such adjustment.
	The Trustee may act and rely, for all purposes, upon Written Directions of the Corporation and any other documents filed by the Corporation pursuant to this Section.
(f)	No Duty of Trustee. The Trustee:

(i)	shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist which may require any adjustment hereto or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making same;
(ii)	shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or of any other shares, securities or property

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	which may at any time be issued or delivered upon the redemption or conversion of Units; and
(iii)	shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or share or securities certificates upon the redemption or conversion of Units.

(g) Post-Adjustment. After any adjustment pursuant to this Section, the term “Shares” where used in this Indenture shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, may be based upon a redemption or conversion of Units, and the number of Shares to be so issued shall be interpreted to mean the number of securities and other property and assets which, are issuable, as a result of such adjustment and all prior adjustments pursuant to this Section 7.1(3)(g).

ARTICLE 8

SUBORDINATION OF NOTES

Section 8.1     Agreement to Subordinate.

     The Corporation covenants and agrees, and each Unitholder, by his acceptance thereof, likewise agrees, that the payment of any sums on the Notes comprised in the Units is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all Senior Liabilities and of all amounts payable in respect of the First Units in accordance with the provisions of the indenture governing the issue thereof.

Section 8.2     Distribution on Insolvency or Winding-up.

     Upon any dissolution, winding-up, liquidation, reorganization or other similar proceedings relative to the Corporation or its property or assets, resulting from bankruptcy, insolvency, reorganization or receivership proceedings or upon an assignment for the benefit of creditors,

(a)

the holders of all Senior Liabilities will first be entitled to receive payment in full of the principal thereof, premium, if any, and interest due thereon, before the Unitholders are entitled to receive any payment on account of the Redemption Consideration;

(b)

the holders of First Units will be entitled to receive payment in full of amounts payable in respect thereof in accordance with the provisions of the indenture governing the issue thereof before the Unitholders are entitled to receive any payment on account of the Redemption Consideration but after payment to the holders of all Senior Liabilities of the amounts contemplated by paragraph (a) above;

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(c)

any payment by, or distribution of assets of, the Corporation of any kind or character, whether in cash, property or securities (other than securities of the Corporation or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Article 8 with respect to the Notes, to the payment of all Senior Liabilities, provided that (i) the Senior Liabilities are assumed by the new corporation, if any, resulting from such reorganization or readjustment and (ii) the rights of the holders of Senior Liabilities are not altered adversely by such reorganization or readjustment), to which the Unitholders or the Trustee would be entitled except for the provisions of this Article 8, will be paid or delivered by the person making such payment or distribution, whether a trustee in bankruptcy, a receiver, a receiver-manager, a liquidator or otherwise, directly to the holders of Senior Liabilities or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Liabilities may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Liabilities held or represented by each, to the extent necessary to make payment in full of all Senior Liabilities remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Liabilities; and

(d)

subject to Section 8.6, if, notwithstanding the foregoing, any payment by, or distribution of assets of, the Corporation of any kind or character, whether in cash, property or securities (other than securities of the Corporation as reorganized or readjusted or securities of the Corporation or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Article 8 with respect to the Notes, to the payment of all Senior Liabilities, provided that (i) the Senior Liabilities are assumed by the new corporation, if any, resulting from such reorganization or readjustment and (ii) the rights of the holders of Senior Liabilities are not altered adversely by such reorganization or readjustment), is received by the Trustee or the Unitholders before all Senior Liabilities are paid in full, such payment or distribution will be held in trust for the benefit of, and will be paid over to the holders of such Senior Liabilities or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Liabilities may have been issued, ratably as aforesaid, for application to the payment of all Senior Liabilities remaining unpaid until such Senior Liabilities have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Liabilities.

Section 8.3     Subrogation.

     Subject to the payment in full of all Senior Liabilities, the Unitholders shall be subrogated to the rights of the holders of Senior Liabilities to receive payments and distributions of assets of the Corporation in respect of and on account of Senior Liabilities, to the extent of the application thereto of moneys or other assets which would have been received by the Unitholders but for the provisions of this Article 8, until the Redemption Consideration

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shall be paid in full. No payment or distribution of assets of the Corporation to the Unitholders which would be payable or distributable to the holders of Senior Liabilities pursuant to this Article 8 shall, as between the Corporation, its creditors (other than the holders of Senior Liabilities) and the Unitholders, be deemed to be a payment by the Corporation to or on account of the Unitholders, it being understood that the provisions of this Article 8 are, and are intended, solely for the purpose of defining the relative rights of the Unitholders, on the one hand, and the holders of the Senior Liabilities, on the other hand. Nothing contained in this Article 8 or elsewhere in this Indenture or in the Units is intended to or shall impair, as between the Corporation and its creditors (other than the holders of Senior Liabilities and the Unitholders), the obligation of the Corporation, which is unconditional and absolute, to pay to the Unitholders the Redemption Consideration as and when the same shall become due and payable, or to affect the relative rights of the Unitholders and creditors of the Corporation other than the holders of the Senior Liabilities, nor shall anything herein or therein prevent the Trustee or the holder of any Units from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 8, of the holders of Senior Liabilities upon the exercise of any such remedy.

Section 8.4     No Payment to Unitholders if Event of Default under the Senior Liabilities.

(1)	Priority of Senior Liabilities. Upon the maturity of any Senior Liabilities by lapse of time, acceleration or otherwise, then, except as hereinafter otherwise provided in Section 8.4(4), all principal of and premium, if any, and interest on all such matured Senior Liabilities shall first be paid in full, or shall first have been duly provided for, before any payment on account of Redemption Consideration is made.
(2)	No Payment. Except as hereinafter otherwise provided in Section 8.4(4), the Corporation shall not make any payment, and the Trustee shall not be entitled to demand, institute proceedings for the collection of, or receive any payment or benefit (including without limitation by compensation, set-off, combination of accounts or otherwise in any manner whatsoever) on account of the Units (i) in a manner inconsistent with the terms (as they exist on the date hereof) of this Indenture or of the Units, or (ii) at any time when an event of default, as defined in any Senior Liabilities or any instrument evidencing the same and permitting the holders thereof to accelerate the maturity thereof, has occurred and is continuing and notice of such event of default has been given by or on behalf of the holders of Senior Liabilities to the Corporation and the Trustee, in each case unless and until the Senior Liabilities have been paid and satisfied in full or unless and until such event of default shall have been cured or waived or shall have ceased to exist.
(3)	No Default. Notwithstanding Section 10.1(a), the failure to make any payment as a result of the application of this Section 8.4 which would otherwise be required to be made to the Unitholders pursuant to this Indenture shall not constitute an Event of Default hereunder unless an event of default under the Senior Liabilities results in the acceleration thereof or unless the Corporation, upon the curing, the waiver of or the cessation of existence of such event of default, does not within a reasonable delay pay, in accordance with the terms of this Indenture, any amount due at such time on account of principal of and interest, if any, on the Notes.

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(4) Trustee May Receive Payments. For greater certainty, this Section 8.4 shall not be construed so as to prevent the Trustee from receiving and retaining any payments on account of Units which are made (i) in a manner that is consistent with the terms of this Indenture or of the Units and (ii) at any time when no event of default, as defined in any Senior Liabilities or the instrument creating the same and permitting the holders thereof to accelerate the maturity thereof, has occurred and is continuing in respect of which notice has been given by or on behalf of the holders of Senior Liabilities to the Corporation and the Trustee.

Section 8.5     Authorization of Unitholders to the Trustee to Effect Subordination.

     Each Unitholder, by its acceptance thereof, authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effect the subordination provided for in this Article 8 and appoints the Trustee its attorney-in-fact for any and all such purposes. Furthermore, each Unitholder, by his acceptance thereof, authorizes and directs the Trustee on his behalf, at the request of a holder of Senior Liabilities, to execute a subordination agreement in favour of such holder of Senior Liabilities.

Section 8.6     Knowledge of the Trustee.

     Notwithstanding the provisions of this Article 8, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Trustee, or the taking of any other action by the Trustee, unless and until the Trustee has received written notice thereof from the Corporation, any Unitholder or the holder or representative of any class of Senior Liabilities.

Section 8.7     Trustee May Hold Senior Liabilities.

     The Trustee is entitled to all the rights set forth in this Article 8 with respect to any Senior Liabilities at the time held by it, to the same extent as any other holder of Senior Liabilities, and nothing in this Indenture deprives the Trustee of any of its rights as such holder.

Section 8.8     Rights of Holders of Senior Liabilities Not Impaired.

     No right of any present or future holder of any Senior Liabilities to enforce the subordination herein will at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Corporation or by any non-compliance by the Corporation with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.

Section 8.9     Altering the Senior Liabilities.

     The holders of the Senior Liabilities have the right to extend, renew, modify or amend the terms of the Senior Liabilities or any security therefor and to release, sell or exchange such security and otherwise to deal freely with the Corporation, all without notice to or consent of the Unitholders and without affecting the liabilities and obligations of the parties to this Indenture or the Unitholders.

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ARTICLE 9

COVENANTS OF THE CORPORATION

Section 9.1     General Covenants.

	The Corporation covenants with the Trustee for the benefit of the Trustee and the Unitholders as follows:
(1)	Maintenance. The Corporation will at all times maintain its corporate existence, carry on and conduct its business, and that of its material subsidiaries, in a proper, efficient and business-like manner and keep or cause to be kept proper books of account in accordance with generally accepted accounting practice.
(2)	Reservation of Shares. The Corporation will reserve and keep available sufficient unissued Class A Shares and Class B Shares to enable it to satisfy its obligations on the conversion or redemption of the Units.
(3)	Units and Issue of Shares. The Units shall, when countersigned and registered as herein provided, be valid and enforceable against the Corporation and, subject to the provisions of the Indenture, the Corporation will cause the Shares from time to time issued pursuant to the conversion or redemption of the Units, and the certificates representing such Shares, to be issued and delivered in accordance with the Units and the terms hereof and all Shares that are issued on conversion or redemption of the Units will be fully paid and non-assessable Shares.
(4)	Open Registers. The Corporation will cause the Trustee to keep open the registers of Holders and registers of transfers referred to in Section 6.1(1) as required by such Section and will not take any action or omit to take any action which would have the effect of preventing the Unitholders from exercising any of the Units or receiving any of the Shares upon such exercise.
(5)	Further Assurances. The Corporation will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances as the Trustee may reasonably require for better accomplishing and affecting the provisions of this Indenture.
(6)	Trustee’s Remuneration. The Corporation shall pay (and shall be responsible for the payment thereof) to the Trustee, reasonable remuneration agreed to in writing for its services hereunder and will repay to the Trustee, upon delivery of original invoices therefor, the amount of all reasonable out-of-pocket expenditures that the Trustee reasonably incurs in the execution of its obligations hereunder with respect to the Units without duplication of any amounts otherwise claimed or paid to the Trustee, including reasonable fees and disbursement reasonably incurred by counsel and all other advisors reasonably retained by the Trustee in connection herewith.
(7)	Reporting Issuer Status. The Corporation will use its reasonable commercial efforts to make all requisite filings under applicable Canadian securities legislation including those necessary to become and remain, a reporting issuer not in default in each of the

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	provinces of Canada and those necessary to report the exercise of the right to acquire Shares pursuant to the conversion of Units.
(8)	Listing. The Corporation will use its reasonable commercial efforts to obtain and maintain the listing of the Units and the Shares on the TSX.
(9)	Registration Statement. If an exemption is not available under the U.S. Securities Act in connection with the issuance of Shares resulting from the conversion of Units pursuant to Article 4, the Corporation shall prepare and file, as soon as reasonably possible following the date on which Units are first issued hereunder, a registration statement under the U.S. Securities Act, will use its reasonable commercial efforts to have the SEC declare such registration statement effective as soon as possible thereafter and will use its reasonable commercial efforts to cause such registration statement to remain effective until the Maturity Date.
(10)	Amendments to Inter-Creditor Agreement. The Corporation shall not amend or agree to amend Section 2.2 of the Inter-Creditor Agreement without the prior written consent of the Trustee; and
(11)	General Performance. The Corporation will perform and carry out all acts and things to be done by it as provided in this Indenture.

Section 9.2     To Provide Annual Certificate of Compliance.

     The Corporation covenants that on or before January 1st of each fiscal year following the issuance of Units hereunder and at any other time if requested by the Trustee, the Corporation will furnish to the Trustee a Certificate of the Corporation stating that the Corporation has complied with all covenants, conditions and other requirements contained in this Indenture, non-compliance with which would, with the giving of notice or the lapse of time or both, constitute an Event of Default hereunder or, if such is not the case, specifying the covenant, condition or other requirement which has not been complied with and giving particulars of such non-compliance and the action, if any, the Corporation proposes to take with respect thereto.

Section 9.3     The Trustee may Perform Covenants.

     If the Corporation shall fail to perform any of its covenants contained herein, the Trustee may in its discretion, but (subject to Section 10.2) need not, notify the Unitholders of such failure or may itself perform any of such covenants capable of being performed by it and, if any such covenant requires the payment of money, it may make such payment with its own funds, or with money borrowed by it for such purpose, but shall be under no obligation to do so; and all sums so paid shall be payable by the Corporation in accordance with the provisions of Section 9.1(6). No such performance by the Trustee of any covenant contained herein or payment by the Corporation of any sums advanced or borrowed by the Trustee pursuant to the foregoing provisions shall be deemed to relieve the Corporation from any default hereunder.

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ARTICLE 10

DEFAULT AND ENFORCEMENT

Section 10.1     Events of Default.

     Each of the following events is hereinafter sometimes referred to as an “Event of Default”:

(a)	if the Corporation makes default in payment of the principal of any Units when the same becomes due under any provision hereof or of such Units; or
(b)	if a decree or order of a court having jurisdiction in the premises is entered adjudging the Corporation a bankrupt or insolvent under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or analogous laws, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Corporation, or appointing a receiver of the Corporation or any substantial part of its property, or ordering the winding-up or liquidation of its affairs unless the Corporation actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 Business Days after the issue of such decree or order by a court; or
(c)	if an order is made or a resolution is passed for the winding-up or liquidation of the Corporation except in the course of carrying out or pursuant to a transaction in respect of which the conditions of Section 12.1 are duly observed and performed or if the Corporation institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or analogous laws, or consents to the filing of any such petition or to the appointment of a receiver of the Corporation or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any of the aforesaid purposes; or
(d)	if the Corporation makes default in observing or performing any other covenant or condition of this Indenture on its part to be observed or performed and if such default continues for a period of 30 days after notice in writing has been given to the Corporation by the Trustee specifying such default and requiring the Corporation to rectify the same, unless the Trustee (having regard to the subject matter of the default) shall have agreed to a longer period and, in such event, for the period agreed to by the Trustee; or
(e)	if an encumbrancer takes possession of all or substantially all of the property of the Corporation, or if any process of execution is levied or enforced upon or against all or substantially all of the property of the Corporation and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Corporation actively and diligently contests in good faith

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such process, but in that event the Corporation shall, if the Trustee so requires, give security which, in the discretion of the Trustee, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

Section 10.2     Notice of Events of Default.

(1)

Notice. If an Event of Default shall occur and is continuing the Trustee shall, within 30 days after it becomes aware of the occurrence of such Event of Default, give notice thereof to the Unitholders, provided that, notwithstanding the foregoing, the Trustee shall not be required to give such notice if the Trustee in good faith shall have decided that the withholding of such notice is in the best interests of the Unitholders and shall have so advised the Corporation in writing.

(2)

Default Cured. Where notice of the occurrence of an Event of Default has been given and the Event of Default is thereafter cured, notice that the Event of Default is no longer continuing shall be given by the Trustee to the Unitholders within 15 days after the Trustee becomes aware that the Event of Default has been cured.

Section 10.3     Acceleration on Default

     If any Event of Default has occurred and is continuing, the Trustee may in its discretion, and shall upon receipt of a Unitholders’ Request by notice in writing to the Corporation declare the principal of and interest on the Notes then outstanding and any other moneys payable hereunder to be due and payable and the same shall forthwith become immediately due and payable to the Trustees, notwithstanding anything contained therein or herein to the contrary.

Section 10.4     Waiver of Default.

     If an Event of Default shall have occurred:

(a)

the Holders of more than 50% of the Units then outstanding shall have the power (in addition to the powers exercisable by Extraordinary Resolution as hereinafter provided) by instrument signed by such Holders to instruct the Trustee to waive any Event of Default hereunder and the Trustee shall thereupon waive the Event of Default and/or cancel such declaration upon such terms and conditions as such Unitholders shall prescribe; and

(b)

the Trustee, so long as it has not become bound to institute any proceedings hereunder, shall have the power to waive any Event of Default hereunder, if, in the Trustee’s opinion, the same shall have been cured or adequate satisfaction made therefor, and in such event to cancel any such declaration theretofore made by the Trustee in the exercise of its discretion, upon such terms and conditions as the Trustee may consider advisable;

provided that no delay or omission of the Trustee or of the Unitholders to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein and provided further that no act or omission either of the Trustee or of the Unitholders shall extend to or be

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taken in any manner whatsoever to affect any subsequent Event of Default hereunder or the rights resulting therefrom.

Section 10.5     Enforcement by the Trustee.

     If an Event of Default shall have occurred, but subject to Section 10.3 and to the provisions of any Extraordinary Resolution that may be passed by the Unitholders hereinafter provided:

(a)	the Trustee may in its discretion proceed to enforce the rights of the Trustee and of the Unitholders by any action, suit, remedy or proceeding authorized or permitted by this Indenture or by law or equity; and may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Unitholders filed in any bankruptcy, insolvency, winding-up or other judicial proceedings relating to the Corporation;
(b)	no such remedy for the enforcement of the rights of the Trustee or the Unitholders shall be exclusive of or dependent on any other such remedy but any one or more of such remedies may from time to time be exercised independently or in combination;
(c)	all rights of action hereunder may be enforced by the Trustee without the possession of any of the Units or the production thereof at the trial or other proceedings relating thereto; and
(d)	upon receipt of a Unitholders’ Request and upon receiving sufficient funds and being indemnified to its satisfaction as provided in Section 15.7(2), the Trustee shall exercise or take such one or more of such remedies as the Unitholders’ Request may direct, provided that if any such Unitholders’ Request directs the Trustee to take proceedings out of court the Trustee may in its discretion take judicial proceedings in lieu thereof.

Section 10.6     Unitholders May Not Sue.

(1) Right of Action. No Unitholders shall have the right to institute any action, suit or proceeding or to exercise any other remedy authorized or permitted by this Indenture or by law or by equity for the purpose of enforcing payment of principal or interest owing on any Notes comprised in the Units or for the execution of any trust or power hereunder, unless:

(a)	such Holder shall previously have given to the Trustee written notice of the occurrence of an Event of Default;
(b)	the Unitholders, by Extraordinary Resolution, shall have made a request to the Trustee to take action hereunder or the Unitholders’ Request referred to in Section 10.5(d) shall have been delivered to the Trustee, and the Trustee shall have been offered a reasonable opportunity either itself to proceed to exercise the

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	powers hereinbefore granted or to institute an action, suit or proceeding in its name for such purpose;
(c)	the Unitholders or any of them shall have furnished to the Trustee, when requested by the Trustee, sufficient funds and an indemnity in accordance with Section 15.7(2); and
(d)	the Trustee shall have failed to act within a reasonable time thereafter.

(2) Remedies and Proceedings. In such event but not otherwise any Unitholder, acting on behalf of himself and all other Unitholders, shall be entitled to take proceedings in any court of competent jurisdiction such as the Trustee might have taken under Section 10.5, but in no event shall any Unitholder or combination of Unitholders have any right to take any other remedy or proceedings; it being understood and intended that no one or more Unitholders shall have any right in any manner whatsoever to enforce any right hereunder or under any Units except subject to the conditions and in the manner herein provided, and that all powers and trusts hereunder shall be exercised and all proceedings at law shall be instituted, had and maintained by the Trustee, except only as herein provided, and in any event for the equal benefit of all Holders of outstanding Units.

Section 10.7     Application of Moneys.

     Except as otherwise provided herein, any moneys arising from any enforcement hereof, whether by the Trustee or any Unitholders, shall be held by the Trustee and applied by it, together with any moneys then or thereafter in the hands of the Trustee available for the purpose, as follows:

(a)	first, in payment or reimbursement to the Trustee of the remuneration, expenses, disbursements and advances of the Trustee earned, incurred or made in the administration or execution of the trusts hereunder or otherwise in relation to this Indenture with interest thereon as herein provided;
(b)	second, in or towards payment of the then current Redemption Consideration of the Units then outstanding and thereafter in or towards payment of the interest on overdue amount on such Units (or if the Unitholders, by instrument signed by more than 50% of the Unitholders or by Extraordinary Resolution passed at a meeting of Unitholders, shall have directed payments to be made in accordance with any other order of priority, or without priority as between principal and interest, then such moneys shall be applied in accordance with such direction); and
(c)	third, the surplus (if any) of such moneys shall be paid to the Corporation or as it may direct;

provided, however, that no payments shall be made in respect of the Redemption Consideration on any Units held by or for the benefit of the Corporation (other than any Units pledged for value and in good faith to a Person other than the Corporation, but only to the

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extent of such Person’s interest therein) except subject to the prior payment in full of the Redemption Consideration on all Units which are not so held.

Section 10.8     Distribution of Moneys.

     Payments to Unitholders pursuant to Section 10.7(b) shall be made as follows:

(a)	at least 10 day’s prior written notice of every such payment shall be given in the manner provided in Article 14 specifying the date and time when and the place or places where such payments are to be made and the amount of the payment and the application thereof as between principal and interest;
(b)	payment on any Units shall be made upon presentation of the Unit Certificates evidencing such Units at any one of the places specified in such notice and any Unit Certificates evidencing such Units thereby paid in full shall be surrendered, otherwise a notation of such payment shall be endorsed thereon; but the Trustee may in its discretion dispense with presentation and surrender or endorsement in any special case upon receipt by it of such indemnity as it shall consider sufficient;
(c)	from and after the date of payment specified in the notice, the Redemption Price shall be adjusted pursuant to Section 3.1(3) for the interest accruing only on the amount owing on each Note after giving credit for the amount of the payment specified in such notice, unless payment of such amount is not made; and
(d)	the Trustee shall not be required to make any partial or interim payment to Unitholders unless the moneys in its hands, after reserving therefrom such amount as the Trustee may think necessary to provide for the payments mentioned in Section 10.7(a), exceed 5% of the aggregate Principal Amount of the Notes comprised in outstanding Units, but it may retain the moneys so received by it and deal with the same as provided in Article 15 until the money or investments representing the same, with the income derived therefrom, together with any other moneys for the time being under its control shall be sufficient for such purpose or until it shall consider it advisable to apply the same in the manner hereinbefore set forth.

Section 10.9     Persons Dealing with the Trustee.

     No Person dealing with the Trustee or any of its agents shall be concerned to enquire whether an Event of Default has occurred, or whether the powers which the Trustee is purporting to exercise have become exercisable, or whether any moneys remain due under this Indenture or on the Units, or to see to the application of any moneys paid to the Trustee; and in the absence of fraud on the part of such Person, such dealing shall be deemed to be within the powers hereby conferred and to be valid and effective accordingly.

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Section 10.10     Trustee’s Appointed Attorney.

     The Corporation irrevocably appoints the Trustee to be the attorney of the Corporation in the name and on behalf of the Corporation to execute any instruments and do any things which the Corporation ought to execute and do, and has not executed or done, under the covenants and provisions contained in this Indenture and generally to use the name of the Corporation in the exercise of all or any of the powers hereby conferred on the Trustee with full powers of substitution and revocation.

Section 10.11     Remedies Cumulative.

     No remedy herein conferred upon or reserved to the Trustee or the Unitholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing by law or by statute.

Section 10.12     Immunity of Shareholders, Directors and Others.

     The Unitholders and the Trustee waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future incorporator, shareholder, director of officer of the Corporation or of any Successor Corporation for the payment of the principal of or interest on any of the Notes or on any covenant, agreement, representations or warranty by the Corporation contained herein or in the Notes.

Section 10.13     Judgment Against the Corporation.

     In the case of any judicial or other proceedings to obtain judgment for the principal of or interest on the Notes, judgment may be rendered against the Corporation in favour of the Unitholders or in favour of the Trustee, as Trustee for the Unitholders, for any amount which may remain due in respect of the Notes.

ARTICLE 11

SATISFACTION AND DISCHARGE

Section 11.1     Cancellation and Destruction.

     All Unit Certificates representing Units shall forthwith after payment thereof be delivered to the Trustee and cancelled by it. Subject to trust industry practice, all Unit Certificates representing Units which are cancelled or required to be cancelled under this or any other provision of this Indenture shall be destroyed by the Trustee and, if required by the Corporation, the Trustee shall furnish to it a destruction certificate setting out the designating numbers and denominations of the Unit Certificates so destroyed.

Section 11.2     Non-Presentation of Units.

     If the Holder of any Units shall fail to present its Unit Certificate(s) for redemption or conversion or shall not accept payment on account thereof and give such receipt therefor (if any) as the Trustee may require:

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(a)	the Corporation shall be entitled to deliver to the Trustee and direct it to set aside; or
(b)	in respect of moneys in the hands of the Trustee which may or should be applied to the payment of the Units, the Corporation shall be entitled to direct the Trustee to set aside; or
(c)	if the redemption was pursuant to notice given by the Trustee, the Trustee may itself set aside;

the sums, Class A Shares or Class B Shares, as the case may be, in trust to be remitted to the Unitholders upon due presentation and surrender of the Unit Certificates in accordance with the provisions of this Indenture; and thereupon such sums, Class A Shares or Class B Shares shall be deemed to have been paid and thereafter such Units shall not be considered as outstanding hereunder and the Holders thereof shall thereafter have no right in respect thereof except that of receiving the sums or shares so set aside by the Trustee without interest thereon (without interest thereon) upon due presentation and surrender of the Units, subject always to the provisions of Section 11.3. Any moneys so set aside may, and, if remaining unclaimed for 60 days shall, be invested by the Trustee in accordance with Article 15.

Section 11.3     Repayment of Unclaimed Moneys.

     Subject to any applicable law with respect to the deposit of unclaimed moneys with any public authority and to any applicable law of prescription or statute limitation, any moneys set aside under Section 11.2 and not claimed by and paid to Unitholders as provided in Section 11.2 within six years after the date of such setting aside shall be repaid to the Corporation by the Trustee on demand and thereupon the Trustee shall be released from all further liability with respect to such moneys and thereafter the Unitholders in respect of which such moneys were so repaid to the Corporation shall have no rights in respect thereof except to obtain payment of the moneys due thereon from the Corporation.

Section 11.4     Discharge.

     Upon proof being given to the reasonable satisfaction of the Trustee that all the Notes comprised in Units have been paid or satisfied or that, all the outstanding Units having matured or having been duly called for redemption or the Trustee having been given irrevocable instructions by the Corporation to give within 90 days notice of redemption of all the outstanding Units, such payment or redemption has been duly provided for by payment to the Trustee or otherwise, and upon payment of all costs, charges and expenses properly incurred by the Trustee in relation to this Indenture and all interest thereon and the remuneration of the Trustee, or upon provision satisfactory to the Trustee being made therefor, the Trustee shall, at the request and at the expense of the Corporation, execute and deliver to the Corporation such deeds or other instruments as shall be necessary to evidence the satisfaction and discharge of this Indenture and to release the Corporation from its covenants contained herein except those relating to the indemnification of the Trustee.

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ARTICLE 12

SUCCESSOR CORPORATION

Section 12.1     Certain Requirements in Respect of Merger, etc.

     The Corporation shall not enter into any transaction, whether by way of amalgamation (except a short-form amalgamation with one or more of its wholly-owned subsidiaries pursuant to the Canada Business Corporations Act) merger, arrangement reconstruction, reorganization, consolidation, transfer, sale, lease or otherwise whereby all or substantially all of its undertaking, property and assets would become the property of any other Person or, in the case of any such amalgamation, of the continuing corporation resulting therefrom, unless, but may do so if:

(a)	such other Person or continuing corporation is a corporation (the “Successor Corporation”) incorporated under the laws of Canada or any province thereof;
(b)	the Successor Corporation shall perform such acts and execute, prior to or contemporaneously with the completion of such transaction, such indenture supplemental hereto and other instruments (if any) as in the opinion of Counsel are necessary or advisable to evidence the assumption by the Successor Corporation of the liability for the due and punctual payment of all the Notes and the interest thereon and all other moneys payable hereunder and the covenant of such Successor Corporation to pay the same and its agreement to observe and perform all the covenants and obligations of the Corporation under this Indenture;
(c)	the Units will be valid and binding obligations of the Successor Corporation entitling the Holders, as against the Successor Corporation, to all of the rights they have under this Indenture; and
(d)	no condition or event shall exist in respect of the Corporation or the Successor Corporation, either at the time of such transaction or immediately thereafter after giving full effect thereto, which constitutes or would, after the giving of notice or the lapse of time or both, constitute an Event of Default hereunder.

Section 12.2     Vesting of Powers in Successor.

     Whenever the conditions of Section 12.1 have been duly observed and performed, the Trustee shall execute and deliver the supplemental indenture provided for in Article 16 and thereupon:

(a) the Successor Corporation shall possess and from time to time may exercise each and every right and power of the Corporation under this Indenture in the name of the Corporation or otherwise, and any act or proceeding by any provision of this Indenture required to be done or performed by any Directors or officers of the Corporation may be done and performed with like force and effect by the like directors or officers of such Successor Corporation; and

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(b) the Corporation shall be released and discharged from liability under this Indenture and the Trustee may execute any documents which it may be advised are necessary or advisable for effecting or evidencing such release and discharge.

ARTICLE 13

MEETINGS OF UNITHOLDERS

Section 13.1     Right to Convene Meetings.

     The Trustee may at any time and from time to time and shall, upon receipt of a written request of the Corporation or a Unitholders’ Request and of sufficient funds and upon being indemnified to its reasonable satisfaction by the Corporation or by the Unitholders signing such Unitholders’ Request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Unitholders. If the Trustee fails within 30 days after receipt of such written request or Unitholders’ Request and such indemnity to give notice convening a meeting, the Corporation or such Unitholders, as the case may be, may convene such meeting. Every such meeting shall be held in the city of Montreal or at such other place as may be approved or determined by the Trustee.

Section 13.2     Notice of Meetings.

     Subject to Section 13.12, not more than 60 and not less than 30 days’ notice of any meeting shall be given to the Unitholders and a copy thereof shall be sent by mail to the Trustee unless the meeting has been called by it and to the Corporation unless the meeting has been called by it. Such notice shall state the time when and the place where the meeting is to be held and shall state briefly the general nature of the business to be transacted thereat, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed at the meeting or any of the provisions of this Article 13.

Section 13.3     Chairman.

     An individual, who need not be a Unitholders, nominated in writing by the Trustee shall be chairman of the meeting and if no individual is so nominated or if the individual so nominated is unable or unwilling to act or if the individual so nominated is not present within 15 minutes from the time fixed for the holding of the meeting, the Unitholders present in person or by proxy shall choose an individual present to be chairman.

Section 13.4     Quorum.

     At any meeting of the Unitholders other than a meeting convened for the purpose of considering a resolution proposed to be passed as an Extraordinary Resolution, as to which the provisions of Section 13.12 shall be applicable, a quorum shall consist of Unitholders present in person or by proxy and holding Units representing at least 50% in Principal Amount of Notes included in outstanding Units. If a quorum of the Unitholders shall not be present within 30 minutes from the time fixed for holding any such meeting, the meeting, if convened by the Unitholders or pursuant to a Unitholders’s Request, shall be dissolved; but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day, in which case it shall be adjourned to the next following Business Day) at the same time

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and place. At the adjourned meeting ,the Unitholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent Units including 50% of the Principal Amount of Notes included in all outstanding Units.

Section 13.5     Power to Adjourn.

     The chairman of any meeting at which a quorum of the Unitholders is present may, with the consent of the Holders of Unit representing a majority in Principal Amount of the Notes included in Units represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

Section 13.6     Show of Hands.

     Every question submitted to a meeting shall be decided in the first place by a majority of the votes given on a show of hands except that votes on Extraordinary Resolutions shall be given in the manner hereinafter provided. At such meeting unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact.

Section 13.7     Poll.

     On every Extraordinary Resolution, and on any other question submitted to a meeting, when demanded by the chairman or by one or more Unitholders and/or proxies for Unitholders holding at least 5% of the Principal Amount of the Notes included in the Units represented thereat, a poll shall be taken in such manner as the chairman shall direct. Questions other than Extraordinary Resolutions shall, if a poll is taken, be decided by the votes of the Holders of a majority in Principal Amount of the Notes included in the Units represented at the meeting and voted on the poll.

Section 13.8     Voting.

     On a show of hands, every Person who is present and entitled to vote, whether as a Unitholder or as proxy, shall have one vote. On a poll each Unitholder present in person or represented by a duly appointed proxy shall be entitled to one vote in respect of each $100.00 Principal Amount of Notes included in Units of which he shall then be the Holder. A proxy need not be a Unitholders. In the case of joint registered Unitholders, any one of them present in person or by proxy at the meeting may vote in the absence of the other or others; but in case more than one of them are present in person or by proxy, they shall vote together in respect of the Notes of which they are joint registered Holders.

Section 13.9     Regulations.

(1) Power to Make Regulations. The Trustee or the Corporation, with the approval of the Trustee, may from time to time make and from time to time vary such regulations as it shall from time to time think fit providing for:

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(a)	voting by proxy and the form of the instrument appointing a proxy (which shall be in writing) and the manner in which the same shall be executed and for the production of the authority of any Person signing on behalf of a Unitholder;
(b)	the deposit of instruments appointing proxies at such place as the Trustee, the Corporation or the Unitholders convening a particular meeting, as the case may be, may in the notice convening the meeting direct and the time, if any, before the holding of the meeting or any adjournment thereof by which the same shall be deposited; and
(c)	the deposit of instruments appointing proxies at some approved place or places other than the place at which a particular meeting is to be held and enabling particulars of instruments appointing proxies to be mailed, cabled, telegraphed, telecopied or sent by telex before the meeting to the Corporation or to the Trustee at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.

(2) Regulations Binding. Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only Persons who shall be recognized at any meeting as the Holders of any Notes, or as entitled to vote or be present at the meeting in respect thereof, shall be Unitholders and persons whom Unitholders have duly appointed as their proxies.

Section 13.10     Corporation and Trustee May Be Represented.

     The Corporation and the Trustee, by their respective officers and directors, and the legal advisers of the Corporation and the Trustee may attend any meeting of the Unitholders, but shall have no vote as such.

Section 13.11     Powers Exercisable by Extraordinary Resolution.

     In addition to the powers conferred upon them by any other provisions of this Indenture or by law, a meeting of the Unitholders shall have the following powers exercisable from time to time by Extraordinary Resolution:

(a)

power to approve any change whatsoever in any of the provisions of this Indenture or the Units and any modification, abrogation, alteration, compromise or arrangement of the rights of the Unitholders and/or the Trustee against the Corporation or against its undertaking, property and assets or any part thereof, whether such rights arise under this Indenture or the Notes or otherwise;

(b)

power to approve any scheme for the reconstruction or reorganization of the Corporation or for the consolidation, amalgamation or merger of the Corporation with any other corporation or for the selling or leasing of the undertaking, property and assets of the Corporation or any part thereof, provided that no such approval shall be necessary in respect of any such transaction if the provisions of Article 12 shall have been complied with;

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(c)	power to direct or authorize the Trustee to exercise any power, right, remedy or authority given to it by this Indenture or the Units in any manner specified in such Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;
(d)	power to waive and direct the Trustee to waive any default or Event of Default hereunder and/or cancel any declaration made by the Trustee pursuant to Section 10.3 either unconditionally or upon any conditions specified in such Extraordinary Resolution;
(e)	power to restrain any Unitholder from taking or instituting any suit, action or proceeding for the purpose of enforcing payment of the principal or interest of any Notes, or for the execution of any trust or power hereunder;
(f)	power to direct any Unitholder who, as such, has brought any action, suit or proceeding to stay or discontinue or otherwise deal with the same in the manner directed by such Extraordinary Resolution upon payment, if the taking of such action, suit or proceeding shall have been permitted by Section 10.6, of the costs, charges and expenses reasonably and properly incurred by such Unitholder in connection therewith;
(g)	power to appoint a committee to consult with the Trustee (and to remove any committee so appointed) and to delegate to such committee (subject to such limitations, if any, as may be prescribed in such Extraordinary Resolution) all or any of the powers which the Unitholders may exercise by Extraordinary Resolution under this Section 13.11; the Extraordinary Resolution making such appointment may provide for payment of the expenses and disbursements of and compensation to such committee; such committee shall consist of such number of individuals (who need not be Unitholders) as shall be prescribed in the Extraordinary Resolution appointing it; subject to the Extraordinary Resolution appointing it, every such committee may elect its chairman and may make regulations respecting its quorum, the calling of its meetings, the filling of vacancies occurring in its number, the manner in which it may act and its procedure generally and such regulations may provide that the committee may act at a meeting at which a quorum is present or may act by resolution signed in one or more counterparts by a majority of the members thereof or the number of members thereof necessary to constitute a quorum, whichever is the greater; all acts of any such committee within the authority delegated to it shall be binding upon all Unitholders;
(h)	power to agree to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation;
(i)	power to authorize the distribution in specie of any shares, bonds, Notes or other securities or obligations and/or cash or other consideration received or the use or disposition of the whole or any part of such shares, bonds, Notes or other securities or obligations and/or cash or other consideration in such manner and

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	for such purpose as may be considered advisable and specified in such Extraordinary Resolution;
(j)	power to approve the exchange of the Notes for or the conversion thereof into shares, bonds, Notes or other securities or obligations of the Corporation or of any company formed or to be formed;
(k)	power to remove the Trustee from office and to appoint a new Trustee or Trustee; and
(l)	power to amend, alter or repeal any Extraordinary Resolution previously passed or approved by the Unitholders or by any committee appointed pursuant to Section 13.11(g).

Section 13.12     Meaning of “Extraordinary Resolution”.

(1)	Meaning. The expression “Extraordinary Resolution” when used in this Indenture means, subject as hereinafter provided in this Article 13, a resolution proposed to be passed as an Extraordinary Resolution at a meeting of Unitholders duly convened for the purpose and held in accordance with the provisions of this Article 13 at which the Holders of more than 50% of the principal amount of the Notes then outstanding are present in person or by proxy and passed by the favourable votes of the Holders of not less than 66 2/3% of the principal amount of Notes represented at the meeting and voted on a poll upon such resolution.
(2)	Quorum. If at any such meeting the holders of more than 50% of the principal amount of the Notes then outstanding are not present in person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by the Unitholders or pursuant to a Unitholder’s Request, shall be dissolved; but in any other case it shall be adjourned to such date, being not less than 21 nor more than 60 days later, and to such place and time as may be appointed by the chairman.
(3)	Notice. Not less than 10 days’ notice shall be given of the time and place of such adjourned meeting in the manner provided in Article 14.
(4)	Form of Notice. The notice shall state that at the adjourned meeting the Unitholders present in person or by proxy shall form a quorum, but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars.
(5)	Quorum at Adjourned Meeting. At the adjourned meeting the Unitholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed in accordance with Section 13.12(1) shall be an Extraordinary Resolution within the meaning of this Indenture, notwithstanding that the Holders of more than 50% of the principal amount of the Notes then outstanding are not present in person or by proxy at such adjourned meeting.

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(6) Poll. Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

Section 13.13     Powers Cumulative.

     It is hereby declared and agreed that any one or more of the powers and/or any combination of the powers in this Indenture stated to be exercisable by the Unitholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the Unitholders to exercise the same or any other such power or powers or combination of powers thereafter from time to time.

Section 13.14     Minutes.

     Minutes of all resolutions and proceedings at every meeting of Unitholders shall be made and duly entered in books to be provided for that purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting of the Unitholders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed or proceedings had thereat, to have been duly passed and had.

Section 13.15     Signed Instruments.

     Any action which may be taken and any power which may be exercised by the Unitholders at a meeting held as hereinbefore in this Article provided may also be taken and exercised by the Holders of more than 66 2/3% of the principal amount of the outstanding Notes by a signed instrument and the expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so signed. Notice of any Extraordinary Resolution passed in accordance with this Section 13.15 shall be given by the Trustee to the Unitholders affected thereby within 30 days of the date on which such Extraordinary Resolution was passed.

Section 13.16     Binding Effect of Resolutions.

     Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article 13 at a meeting of Unitholders shall be binding upon all the Unitholders, whether present at or absent from such meeting, and every instrument signed by Unitholders in accordance with Section 13.15 shall be binding upon all the Unitholders, whether signatories thereto or not, and each and every Unitholder and the Trustee (subject to the provisions for its indemnity herein contained) shall be bound to give effect to every such resolution, Extraordinary Resolution and instrument.

Section 13.17     Evidence of Rights of Unitholders.

(1) Proof. Any request, direction, notice, consent or other instrument which this Indenture may require or permit to be signed or executed by the Unitholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by

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such Unitholders in person or by attorney duly appointed in writing. Proof of the execution of any such request, direction, notice, consent or other instrument or of a writing appointing any such attorney shall be sufficient for any purpose of this Indenture if made in the following manner, namely, the fact and date of the execution by any Person of such request, direction, notice, consent or other instrument or writing may be proved by the certificate of any commissioner for oaths, or other officer authorized to take acknowledgements of deeds to be recorded at the place where such certificate is made, that the Person signing such request, direction, notice, consent or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution or in any other manner which the Trustee may consider adequate.

(2)

Further Proof. The Trustee may nevertheless, in its discretion, require further proof in cases where it considers further proof necessary or desirable or may accept such other proof as it shall consider proper.

ARTICLE 14

NOTICES

Section 14.1     Notice to the Corporation and Trustee.

(1) Notice. Subject to the terms and provisions of this Indenture, any notice, direction or other communication hereunder shall be in writing and shall be given by delivery or by facsimile transmission (if receipt of such transmission is confirmed):

(a) if to the Corporation at:

Microcell Telecommunications Inc.

800 de La Gauchetière Street West

Suite 4000

Montreal, Quebec

H5A 1K3

Attention:  Vice President, Legal Affairs

Facsimile:   (514) 846-6928

(b) if to the Trustee at:

Computershare Trust Company of Canada

1500 University Street

Suite 700

Montreal, Quebec

H3A 3S8

Attention:    Manager, Corporate Trust

Telecopier:   (514) 982-7677

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     Any such notice shall be deemed to have been given if delivered by courier during normal business hours of the recipient on a Business Day, on the day following the date of delivery and if sent by facsimile transmission, on the Business Day so sent provided that any delivery made or sent by facsimile after 4:00 p.m. (Montreal time) on a Business Day, shall be deemed to be received on the next following Business Day.

(2) Change of Address. The Corporation or the Trustee, as the case may be, may from time to time notify the other in the manner provided in Section 14.1(1) hereof of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Corporation or the Trustee, as the case may be, for all purposes of this Indenture.

Section 14.2     Notice to Unitholders.

(1)

Notice. Unless otherwise expressly provided herein, a notice to be given hereunder to Unitholders will be deemed to be validly given if the notice is sent by ordinary surface or air mail, postage prepaid, addressed to the Unitholders or delivered (or so mailed to certain Unitholders and so delivered to the other Unitholders) at their respective addresses appearing on any of the registers of Holders, provided, however, that if, by reason of a strike, lockout or other work stoppage, actual or threatened, involving Canadian postal employees, the notice could reasonably be considered unlikely to reach or likely to be delayed in reaching its destination, the notice will be valid and effective only if it is so delivered or is given by publication twice in the Report on Business Section in the national edition of The Globe and Mail newspaper or any other newspaper published in Toronto and Montreal.

(2)

Date of Notice. A notice so given by mail or so delivered will be deemed to have been given on the first Business Day after it has been mailed or on the day on which it has been delivered, as the case may be, and a notice so given by publication will be deemed to have been given on the day on which it has been published as required. In determining under any provision hereof the date when notice of a meeting or other event must be given, the date of giving notice will be included and the date of the meeting or other event will be excluded. Accidental error or omission in giving notice or accidental failure to mail notice to any Unitholder will not invalidate any action or proceeding founded thereon.

ARTICLE 15

CONCERNING THE TRUSTEE

Section 15.1     Trust Indenture Legislation.

     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of any applicable legislation, including any provision of the TIA (the “Indenture Legislation”), the mandatory requirement shall prevail. The Corporation and the Trustee each shall at all times in relation to this Indenture and any action to be taken hereunder observe and comply with and be entitled to the benefits of any applicable legislation including any provision of the TIA.

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Section 15.2     Rights and Duties of Trustee.

(1)	Duty of Trustee. In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good faith with a view to the best interests of the Unitholders, and shall exercise that degree of care, diligence and skill that reasonably prudent Trustee would exercise in comparable circumstances. The Trustee shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required so to do under the terms hereof; nor shall the Trustee be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee and in the absence of any such notice the Trustee may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Trustee to determine whether or not the Trustee shall take action with respect to any default.
(2)	No Relief From Liability. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent act, negligent failure to act, wilful misconduct or bad faith.
(3)	Actions. The obligation of the Trustee to commence or continue any act, action or proceeding in connection herewith, including without limitation, for the purpose of enforcing any right of the Trustee or the Unitholders hereunder is on the conditions that the Trustee shall have received a Unitholders’ Request specifying the act, action or proceeding which the Trustee is requested to take and, when required by notice to the Unitholders by the Trustee, the Trustee is furnished by one or more Unitholders with sufficient funds to commence or continue such act, action or proceeding and an indemnity reasonably satisfactory to the Trustee to protect and hold it harmless against the costs, charges, expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof.
(4)	Funding. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless it is so indemnified.
(5)	Deposit of Units. The Trustee may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Unitholders at whose instance it is taking such act, action or proceeding to deposit with the Trustee the Unit Certificates held by them, for which certificates the Trustee shall issue receipts.
(6)	Restriction. Every provision of this Indenture that relieves the Trustee of liability or entitles it to rely on any evidence submitted to it is subject to the provisions of Applicable Legislation, of this Section and of Section 15.3 hereof.

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Section 15.3     Evidence, Experts and Advisers.

(1)	Evidence. In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Trustee such additional evidence of compliance with any provision hereof, and in such form, as is prescribed by Applicable Legislation or as the Trustee reasonably requires by written notice to the Corporation.
(2)	Reliance by Trustee. In the exercise of any right or duty hereunder the Trustee, if it is acting in good faith, may act and rely, as to the truth of any statement or the accuracy of any opinion expressed therein, on any statutory declaration, opinion, report, certificate or other evidence furnished to the Trustee pursuant to a provision hereof or of Applicable Legislation or pursuant to a request of the Trustee, if such evidence complies with Applicable Legislation and the Trustee examines such evidence and determines that it complies with the applicable requirements of this Indenture.
(3)	Statutory Declaration. Whenever Applicable Legislation requires that evidence referred to in Section 15.3(1) hereof be in the form of a statutory declaration, the Trustee may accept such statutory declaration in lieu of a Certificate of the Corporation required by any provision hereof. Any such statutory declaration may be made by any one or more of the Chairperson, President, Vice-President, Finance or Secretary of the Corporation or by any other officer(s) or director(s) of the Corporation to whom such authority is delegated by the directors from time to time. In addition, the Trustee may act and rely and shall be protected in acting and relying upon any resolution, certificate, direction, instruction, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram, cablegram or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties.
(4)	Proof of Execution. Proof of the execution of any document or instrument in writing, including a Unitholders’ Request, by a Unitholder may be made by the certificate of a notary public, or other officer with similar powers, that the person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution, or in any other manner that the Trustee considers adequate.
(5)	Experts. The Trustee may employ or retain such counsel, accountants, engineers, appraisers, or other experts or advisers as it reasonably requires for the purpose of determining and discharging its rights and duties hereunder and may pay the reasonable remuneration and disbursements for all services so performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct or negligence on the part of any of them who has been selected with due care by the Trustee. The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant or other expert or advisor, whether retained or employed by the Corporation or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.
(6)	Trustee not Liable. The Trustee shall not be responsible for ensuring compliance with any securities laws applicable to the issuance, transfer, exercise or exchange of any Units

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or underlying Class A Shares or Class B Shares. The Trustee shall be entitled to conclusively rely on the Residency Declaration provided to it with respect to the proper entitlement and issuance of underlying Class A Shares or Class B Shares.

Section 15.4     Documents, Money etc. Held by Trustee.

(1)	Safekeeping. Any security, document of title or other instrument that may at any time be held by the Trustee subject to the trusts hereof may be placed in the deposit vaults of the Trustee or of any Canadian chartered bank or trust company or deposited for safekeeping with any such bank or trust company.
(2)	Holding of Funds. Unless herein otherwise expressly provided, any money held by the Trustee pending the application or withdrawal thereof under any provision of this Indenture may be deposited in trust in an account with the Trustee or in the name of the Trustee in any Canadian chartered bank or trust company at the rate (if any) then current on similar deposits.
(3)	Interest. All interest or other income received by the Trustee in respect of such deposits and investments shall belong to the Corporation.

Section 15.5     Action by Trustee to Protect Interests.

     The Trustee shall have power to institute and to maintain such actions and proceedings as it considers necessary or expedient to protect or enforce its interests and the interests of the Unitholders.

Section 15.6     Trustee not Required to Give Security.

     The Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture.

Section 15.7     Protection of Trustee.

(1) Protection. By way of supplement to the provisions of any law for the time being relating to Trustee, it is expressly declared and agreed that:

(a)	the Trustee shall not be liable for or by reason of, or required to substantiate, any statement of fact, representation or recital in this Indenture or in the Unit Certificates (except the representation contained in Section 15.9 or in the certificate of the Trustee on the Unit Certificates), but all such statements or recitals are and shall be deemed to be made by the Corporation;
(b)	nothing herein contained shall impose on the Trustee any obligation to see to, or to require evidence of, the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;
(c)	the Trustee shall not be bound to give notice to any person of the execution hereof;

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(d)	the Trustee shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach by the Corporation of any obligation or warranty herein contained or of any act of any director, officer, employee or agent of the Corporation;
(e)	the Trustee, in its personal or any other capacity, may buy, lend upon and deal in securities of the Corporation and in the Units and generally may contract and enter into financial transactions with the Corporation or any related corporation without being liable to account for any profit made thereby; and
(f)	the Trustee shall incur no liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail, or any other means.

(2) Indemnity. In addition to and without limiting any protection of the Trustee hereunder or otherwise by law, the Corporation hereby indemnifies the Trustee and saves it and its officers, directors, employees and agents harmless from all liabilities, suits, damages, costs, expenses and actions which may be brought against or suffered by it arising out of or connected with the performance by it of its duties hereunder except to the extent that such liabilities, suits, damages, costs and actions are attributable to the negligence or wilful misconduct of the Trustee. Notwithstanding any other provision hereof, this indemnity shall survive any removal or resignation of the Trustee, discharge of this Indenture and termination of any trusts hereunder.

Section 15.8     Replacement of Trustee.

(1)	Resignation. The Trustee may resign its trust and be discharged from all further duties and liabilities hereunder, except as provided in this Section, by giving to the Corporation and the Unitholders not less than 30 days’ notice in writing or, if a new Trustee has been appointed, such shorter notice as the Corporation accepts as sufficient.
(2)	Removal. The Unitholders by Extraordinary Resolution may at any time remove the Trustee and appoint a new Trustee.
(3)	Appointment of New Trustee. If the Trustee so resigns or is so removed or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable of acting hereunder, the Corporation shall forthwith appoint a new Trustee unless a new Trustee has already been appointed by the Unitholders.
(4)	Failure to Appoint. Failing such appointment by the Corporation, the retiring Trustee or any Unitholder may apply at the expense of the Corporation to the Superior Court of the Province of Quebec, on such notice as such Court directs, for the appointment of a new Trustee.
(5)	New Trustee. Any new Trustee appointed under this Section must be a corporation authorized to carry on the business of a trust company in Quebec and, if required by the Applicable Legislation of any other province, in such other province. On any such appointment the new Trustee shall be vested with the same powers, rights, duties and

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	responsibilities as if it had been originally named herein as Trustee without any further assurance, conveyance, act or deed, but there shall be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as, in the opinion of counsel, are necessary or advisable for the purpose of assuring the transfer of such powers, rights, duties and responsibilities to the new Trustee. Any new Trustee so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Unitholders and by the Corporation.
(6)	Notice of New Trustee. On the appointment of a new Trustee, the Corporation shall promptly give notice thereof to the Unitholders in accordance with Section 14.1 hereof.
(7)	Successor Trustee. A corporation into or with which the Trustee is merged or consolidated or amalgamated, or a corporation succeeding to the trust business of the Trustee, shall be the successor to the Trustee hereunder without any further act on its part or on the part of any party hereto if such corporation would be eligible for appointment as a new Trustee under Section 15.8(5) hereof.
(8)	Certificates. A Unit Certificate certified but not delivered by a predecessor Trustee may be delivered by the new or successor Trustee in the name of the predecessor Trustee or successor Trustee.

Section 15.9     Conflict of Interest.

     The Trustee represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists between its role as a fiduciary hereunder and its role in any other capacity and if a material conflict of interest arises hereafter it shall, within ten days after ascertaining that it has such material conflict of interest, either eliminate the conflict of interest or resign its trust hereunder.

Section 15.10     Trustee’s Authority to Carry on Business.

     The Trustee represents to the Corporation that at the date hereof it is authorized to carry on the business of a trust company in Quebec and each other province and territory of Canada. If, notwithstanding the provisions of this Section 15.10, the Trustee ceases to be authorized to carry on such business, the validity and enforceability of this Indenture and the interest of the Unitholders in the Units registered hereunder shall not be affected in any manner whatsoever by reason only of such event provided that the Trustee, within 30 days after ceasing to be authorized to carry on business, either becomes so authorized or resigns in the manner and with the effects specified in Section 15.8.

Section 15.11     Acceptance of Trust.

     The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform them on the terms and conditions herein set forth.

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ARTICLE 16

SUPPLEMENTAL INDENTURES

Section 16.1     Supplemental Indentures.

     From time to time the Trustee and, when authorized by a resolution of the Directors, the Corporation may and they shall, when required by this Indenture, execute, acknowledge and deliver by their proper officers deeds or indentures supplemental hereto, which thereafter shall form part hereof, for any one or more of the following purposes:

(a)	adding to the provisions hereof such additional covenants of the Corporation, enforcement provisions and other provisions for the protection of the Unitholders and/or providing for events of default in addition to those herein specified;
(b)	making such provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder, including the making of any modifications in the form of the Units which do not affect the substance thereof and which, in the opinion of the Trustee, it may be expedient to make, provided that the Trustee shall be of the opinion that such provisions and modifications will not be prejudicial to the interests of the Unitholders;
(c)	evidencing the succession, or successive successions, of other companies to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Indenture;
(d)	giving effect to any Extraordinary Resolution passed as provided in Article 13;
(e)	making any modification of any of the provisions of this Indenture or the Units which is of a formal, minor or technical nature;
(f)	making any additions to, deletions from or alterations of the provisions of this Indenture (including any of the terms and conditions of the Units) which, in the opinion of the Trustee, are not materially prejudicial to the interests of the Unitholders and which are necessary or advisable in order to incorporate, reflect or comply with Indenture Legislation;
(g)	adding to or altering the provisions hereof in respect of the transfer of Units, including provision for the exchange of Units of different denominations, and making any modification in the form of the Units which does not affect the substance thereof and which, in the opinion of the Trustee, is not materially prejudicial to the interests of the Unitholders;
(h)	correcting or rectifying any ambiguities, defective provisions, errors or omissions herein, provided that, in the opinion of the Trustee, the rights of the Trustee and the Unitholders are in no way prejudiced thereby;

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(i)	modifying, eliminating or adding to the provisions of this Indenture to such extent as shall be necessary or desirable as a result of the provisions of the Civil Code, provided such action pursuant to this Clause shall not, in the judgment of the Trustee, adversely affect the interests of the Unitholders in any material respect; and
(j)	any other purpose not inconsistent with the terms of this Indenture provided that, in the opinion of the Trustee, the rights of the Trustee and of the Unitholders are in no way prejudiced thereby.

     Notwithstanding anything to the contrary in this Indenture, no supplement or amendment to this Indenture or to the terms of the Notes may be made without the prior consent of each Canadian stock exchange on which the Units, Voting Shares and Non-Voting Shares are listed, or were listed in the year prior to the date that such supplement or amendment to the Indenture or the terms of the Notes is to be made.

ARTICLE 17

EXECUTION

Section 17.1     Counterparts and Formal Date.

     This Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to bear date as of May 30, 2003.

Section 17.2     Language of Indenture.

     The parties hereto have requested that this Indenture and all contracts, documents or notices relating thereto be drafted in the English language; les parties à cet acte ont exigé que cet acte et tout contrat, document ou avis y afférent soit rédigé en langue anglaise.

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     IN WITNESS WHEREOF, the parties hereto have executed this Indenture as of the date and as at the place first hereinabove mentioned.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté
	Vice President, Legal Affairs
COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

SCHEDULE 1.1

RESIDENCY DECLARATION

TO:    COMPUTERSHARE TRUST COMPANY OF CANADA

1. The undersigned, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered upon issuance, hereby DECLARES that the ultimate beneficial owner of Shares will be upon issuance:

the undersigned, OR

if other than the undersigned,

   (Name and Address)

2. The beneficial owner of the Shares to be issued will be a Canadian (as defined herein):

Yes       No

   For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2 (1) of the Citizenship Act (Canada) who is ordinarily resident in Canada;
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship;
(c)	a Canadian government, whether federal, provincial or local, or an agency thereof;
(d)	a corporation without share capital, where a majority of its directors or officers, as the case may be, are appointed or designated, either by their personal names or by their names of offices, by one or more of

(i)	a federal or provincial statute or regulations made under a federal or provincial statute;
(ii)	the Governor in Council or the lieutenant governor in Council of a province; or

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(iii) a minister of the Crown in right of Canada or of a province;

(e)	a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 662/3 per cent of the issued and outstanding voting shares of such corporation, and which is not otherwise controlled by non-Canadians;
(f)	a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80 per cent of the board and of each committee of its directors of which are individual Canadians;
(g)	a trust in which Canadians have not less than 662/3 per cent of the beneficial interest, and of which a majority of the trustees are Canadians;
(h)	a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate the Pension Fund Society of the Dominion Bank, S.C. 1887, c 55; S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; or
(i)	a partnership in which each of the partners is a Canadian within the meaning of paragraphs a) to h) above.

Dated the day of 2002

(Name)

(Address)

(Signature)

INSTRUCTIONS

1. This declaration is to be completed by the person (or duly authorized signatory thereof) in whose name shares in the capital of Microcell Telecommunications Inc. are to be registered.

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2. Please return completed declaration to:

Computershare Trust Company of Canada

100 University Avenue

9^th Floor

Toronto, Ontario

M5J 2Y1

Attention:     Corporate Actions

SCHEDULE 2.3 (A)

To the foregoing indenture made as of May 30, 2003 between Microcell Telecommunications Inc., Computershare Trust Company of Canada, as Trustee.

VOTING UNIT CERTIFICATE

NO. MICROCELL TELECOMMUNICATIONS INC. $

(Incorporated under the laws of Canada)

SECOND UNITS

Due May 1, 2013

This Unit Certificate is issued to l as the holder thereof (the « Holder”) in accordance with the provisions of the Unit Indenture dated May 30, 2003, (the “Indenture”) between the Corporation and Computershare Trust Company of Canada as Trustee (herein called “Trustee”, which term includes any successor trustee under the Indenture).

The Unit represented by this Unit Certificate evidences one Note (as defined in the Indenture) in the principal amount of $l and one Voting Share (as defined in the Indenture) which shall form together one and the same instrument and may not be detached nor be split, combined, exchanged or transferred separately from each other; such Unit is issued under the Indenture, to which reference is made for a full description of the rights of the Holders of the said Unit, of the Corporation and of the Trustee and of the terms and conditions upon which the Units are issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which provisions the Holder of this Unit, by acceptance hereof assents. In the event of a conflict between the terms of the Indenture and this Unit, the Indenture shall govern.

Subject to any conversion of the Unit evidenced by this Unit Certificate in accordance with the terms of the Indenture, Microcell Telecommunications Inc. hereby promises to satisfy, on May 1, 2013 (“Redemption Date”) or upon redemption of the Units evidenced by this Unit Certificate in accordance with the provisions of the Indenture, the Redemption Consideration (as defined in the Indenture) therefor, in cash or by way of the issuance of Class A Shares, on presentation and surrender of this Unit Certificate at the corporate actions trust office of the Trustee in Toronto (as defined in the Indenture).

No interest on the Note comprised in this Unit shall accrue and shall be paid to the Holder, other than as part of the Redemption Consideration. The Redemption Price of the Note comprised in this Unit (as defined in the Indenture) shall be increased on November 1^st and May 1^st of each year by the amount of accrued interest on the Note. Upon redemption of this Unit and, upon surrender of this Certificate, the Corporation shall forward or cause to be forwarded to the registered address of the Holder of the Unit, or in the case of joint Holders to the registered address of the joint Holder whose name first appears in the register, a cheque in

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the amount of the Redemption Consideration payable to the order of such Holder or Holders and negotiable at par or certificates representing Class A Shares registered in the name of the Holder or Holders, as the case may be. The forwarding of such sums or shares shall satisfy and discharge the liability for amounts due on redemption on this Unit unless, in the case of sums payable, the cheque therefor not be paid on presentation.

The Unit evidenced by this Unit Certificate and all other Units certified and issued under the Indenture rank pari passu without discrimination, preference or priority. The Units are subordinated obligations of the Corporation.

The Corporation shall withhold all applicable withholding taxes from all payments and deliveries under this Unit, whether in respect of principal, interest, amounts payable and property deliverable on redemption, exchange or maturity, or otherwise.

Units may be redeemed at the option of the Corporation in whole or in part at any time prior to the Maturity Date, upon payment of the Redemption Consideration in cash.

Units shall be redeemed by the Corporation on the Maturity Date. On the Maturity Date, the Redemption Consideration of the Units may be satisfied, at the option of the Corporation, by payment in cash or by delivery of Class A Shares of the Corporation. Units shall also be mandatorily redeemed in cash at any time upon the Corporation having Excess Cash Flow (as defined in the Indenture) available for such purpose.

Each Voting Unit is convertible into one Non-Voting Unit at any time upon presentation by the holder of a duly completed and executed conversion notice in the form of the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee at the corporate actions trust office of the Trustee in Toronto.

Each Unit is convertible into Class A Shares at any time, at the option of the Holder, prior to the redemption of such Unit, upon deposit of the Unit Certificate, with the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee, in either case duly executed by the Holder, at the corporate actions trust office of the Trustee in Toronto. Each Unit is also convertible into Class A Shares upon the occurrence of certain events as described in the Unit Indenture.

The Indenture contains provisions for the holding of meetings of Holders and rendering resolutions passed at such meetings and instruments in writing signed by the Holders of a specified majority of Units outstanding binding upon all Holders, subject to the provisions of the Indenture.

This Unit may be transferred only upon compliance with the conditions precedent in the Indenture on the register at the corporate actions trust office of the Trustee in Toronto, and may be exchanged at such places, by the Holder hereof or such Holder’s executors or administrators or other legal representatives or such Holder’s or their attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee, and upon compliance with such reasonable requirements as the Trustee and/or other registrar may prescribe, and such transfer shall be duly noted hereon by the Trustee or other registrar. The Class A Shares or cash to be delivered upon redemption or conversion or at maturity will be available for pick-up

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at the corporate actions trust office of the Trustee in Toronto on the relevant date specified in the Indenture or, at the option of the Holder, will be forwarded by the Trustee on such date. No Holder or transferee may require any transfer to be made on or during the ten Business Days (as defined in the Indenture) immediately prior to a scheduled redemption date.

This Unit shall not become obligatory for any purpose until it shall have been certified by the Trustee for the time being under the Indenture.

The holder of this Unit by receiving and holding same hereby accepts and agrees to be bound by the terms and to be entitled to the benefits of this Unit and of the Indenture and confirms the appointment of the Trustee as the fondé de pouvoir (holder of the power of attorney) of the holder of this Unit and to the extent necessary for the purposes hereof and of the Indenture, the whole in accordance with and subject to the respective provisions thereof.

Terms capitalized but not defined herein have the respective meanings assigned to them in the Indenture.

Dated as of the l day of l

MICROCELL TELECOMMUNICATIONS INC.

By:

TRUSTEE’S CERTIFICATE

This Unit Certificate is one of the Units referred to in the Indenture named above.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer

(reverse side of form)

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FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to l (whose address and social insurance number if applicable, are set forth below), this Unit of Microcell Telecommunications Inc. (the “Corporation”) standing in the name of the undersigned in the register maintained by the Corporation with respect to such Unit and does hereby irrevocably constitute and appoints the Trustee his/her attorneys to transfer such Unit in such register with full power of substitution in the premises.

Dated	(print or type above name of Holder as appearing on the register)
	by:

The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Unit in every particular without alteration or any change whatsoever. The signature of must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Notarized or witnessed signatures are not acceptable as guaranteed signatures.

(No writing hereon except by the Trustee.)

Date Registration In Whose Name Registered Signature of Trustee

FORM OF CONVERSION NOTICE

The undersigned Holder hereby notifies the Trustee and the Corporation that the Holder, by delivery hereof hereby irrevocably exercises the conversion right in respect of the Unit

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evidenced by this Unit Certificate providing for the conversion of such Units into Class A Shares of the Corporation.

Dated this l day of l

[print or type name exactly as appearing on face]
by:
	Name:
	Title:

SCHEDULE 2.3 (B)

To the foregoing indenture made as of May 30, 2003 between Microcell Telecommunications Inc., Computershare Trust Company of Canada, as Trustee.

NON-VOTING UNIT CERTIFICATE

NO. MICROCELL TELECOMMUNICATIONS INC. $

(Incorporated under the laws of Canada)

SECOND UNITS

Due May 1, 2013

This Unit Certificate is issued to l as the holder thereof (the « Holder”) in accordance with the provisions of the Unit Indenture dated May 30, 2003, (the “Indenture”) between the Corporation and Computershare Trust Company of Canada as Trustee (herein called “Trustee”, which term includes any successor trustee under the Indenture).

The Unit represented by this Unit Certificate evidences one Note (as defined in the Indenture) in the principal amount of $l and one Non-Voting Share (as defined in the Indenture) which shall form together one and the same instrument and may not be detached nor be split, combined, exchanged or transferred separately from each other; such Unit is issued under the Indenture, to which reference is made for a full description of the rights of the Holders of the said Unit, of the Corporation and of the Trustee and of the terms and conditions upon which the Units are issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which provisions the Holder of this Unit, by acceptance hereof assents. In the event of a conflict between the terms of the Indenture and this Unit, the Indenture shall govern.

Subject to any conversion of the Unit evidenced by this Unit Certificate in accordance with the terms of the Indenture, Microcell Telecommunications Inc. hereby promises to satisfy, on May 1, 2013 (“Redemption Date”) or upon redemption of the Units evidenced by this Unit Certificate in accordance with the provisions of the Indenture, the Redemption Consideration (as defined in the Indenture) therefor, in cash or by way of the issuance of Class B Shares, on presentation and surrender of this Unit Certificate at the corporate actions trust office of the Trustee in Toronto (as defined in the Indenture).

No interest on the Note comprised in this Unit shall accrue and shall be paid to the Holder, other than as part of the Redemption Consideration. The Redemption Price of the Note comprised in this Unit (as defined in the Indenture) shall be increased on November 1^st and May 1^st of each year by the amount of accrued interest on the Note. Upon redemption of this Unit and, upon surrender of this Certificate, the Corporation shall forward or cause to be forwarded to the registered address of the Holder of the Unit, or in the case of joint Holders to the registered address of the joint Holder whose name first appears in the register, a cheque in

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the amount of the Redemption Consideration payable to the order of such Holder or Holders and negotiable at par or certificates representing Class B Shares registered in the name of the Holder or Holders, as the case may be. The forwarding of such sums or shares shall satisfy and discharge the liability for amounts due on redemption on this Unit unless, in the case of sums payable, the cheque therefor not be paid on presentation.

The Unit evidenced by this Unit Certificate and all other Units certified and issued under the Indenture rank pari passu without discrimination, preference or priority. The Units are subordinated obligations of the Corporation.

The Corporation shall withhold all applicable withholding taxes from all payments and deliveries under this Unit, whether in respect of principal, interest, amounts payable and property deliverable on redemption, exchange or maturity, or otherwise.

Units may be redeemed at the option of the Corporation in whole or in part at any time prior to the Maturity Date, upon payment of the Redemption Consideration in cash.

Units shall be redeemed by the Corporation on the Maturity Date. On the Maturity Date, the Redemption Consideration of the Units may be satisfied, at the option of the Corporation, by payment in cash or by delivery of Class B Shares of the Corporation. Units shall also be mandatorily redeemed in cash at any time upon the Corporation having Excess Cash Flow (as defined in the Indenture) available for such purpose.

Each Non-Voting Unit is convertible into one Voting Unit at any time upon presentation by the holder of a duly completed and executed Residency Declaration in prescribed form, together with a duly completed and executed conversion notice in the form of the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee at the corporate actions trust office of the Trustee in Toronto.

Each Unit is convertible into Class B Shares at any time, at the option of the Holder, prior to the redemption of such Unit, upon deposit of the Unit Certificate, with the conversion form on the back hereof or any other form of written notice satisfactory to the Trustee, in either case duly executed by the Holder, at the corporate actions trust office of the Trustee in Toronto. Each Unit is also convertible into Class B Shares upon the occurrence of certain events as described in the Unit Indenture.

The Indenture contains provisions for the holding of meetings of Holders and rendering resolutions passed at such meetings and instruments in writing signed by the Holders of a specified majority of Units outstanding binding upon all Holders, subject to the provisions of the Indenture.

This Unit may be transferred only upon compliance with the conditions precedent in the Indenture on the register at the corporate actions trust office of the Trustee in Toronto, and may be exchanged at such places, by the Holder hereof or such Holder’s executors or administrators or other legal representatives or such Holder’s or their attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee, and upon compliance with such reasonable requirements as the Trustee and/or other registrar may prescribe, and such transfer shall be duly noted hereon by the Trustee or other registrar. The Class B Shares or

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cash to be delivered upon redemption or conversion or at maturity will be available for pick-up at the corporate actions trust office of the Trustee in Toronto on the relevant date specified in the Indenture or, at the option of the Holder, will be forwarded by the Trustee on such date. No Holder or transferee may require any transfer to be made on or during the ten Business Days (as defined in the Indenture) immediately prior to a scheduled redemption date.

This Unit shall not become obligatory for any purpose until it shall have been certified by the Trustee for the time being under the Indenture.

The holder of this Unit by receiving and holding same hereby accepts and agrees to be bound by the terms and to be entitled to the benefits of this Unit and of the Indenture and confirms the appointment of the Trustee as the fondé de pouvoir (holder of the power of attorney) of the holder of this Unit and to the extent necessary for the purposes hereof and of the Indenture, the whole in accordance with and subject to the respective provisions thereof.

Terms capitalized but not defined herein have the respective meanings assigned to them in the Indenture.

Dated as of the l day of l

MICROCELL TELECOMMUNICATIONS INC.

By:

TRUSTEE’S CERTIFICATE

This Unit Certificate is one of the Units referred to in the Indenture named above.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer

(reverse side of form)

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FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to l (whose address and social insurance number if applicable, are set forth below), this Unit of Microcell Telecommunications Inc. (the “Corporation”) standing in the name of the undersigned in the register maintained by the Corporation with respect to such Unit and does hereby irrevocably constitute and appoints the Trustee his/her attorneys to transfer such Unit in such register with full power of substitution in the premises.

Dated

(print or type above name of Holder as appearing on the register)

by:

The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Unit in every particular without alteration or any change whatsoever. The signature of must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Notarized or witnessed signatures are not acceptable as guaranteed signatures.

(No writing hereon except by the Trustee.)

Date Registration In Whose Name Registered Signature of Trustee

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FORM OF CONVERSION NOTICE

The undersigned Holder hereby notifies the Trustee and the Corporation that the Holder, by delivery hereof hereby irrevocably exercises the conversion right in respect of the Unit evidenced by this Unit Certificate providing for the conversion of such Units into Class B Shares of the Corporation.

Dated this l of l

[print or type name exactly as appearing on face]
by:
	Name:
	Title:

EX-2.3 7 m10142orexv2w3.htm EX-2.3

Exhibit 2.3

MICROCELL TELECOMMUNICATIONS INC.

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Trustee

WARRANT INDENTURE

PROVIDING FOR THE ISSUE OF 2005 WARRANTS

Dated May 1, 2003

STIKEMAN ELLIOTT LLP

WARRANT INDENTURE – 2005 WARRANTS

     THIS INDENTURE made this 1st day of May, 2003 among MICROCELL TELECOMMUNICATIONS INC., a corporation incorporated under the Canada Business Corporations Act (the “Corporation”) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (the “Trustee”).

     WHEREAS 2861399 Canada Inc. (formerly Microcell Telecommunications Inc.) received the sanction of the Superior Court of the Province of Quebec on March 18, 2003 in respect of a plan of reorganization and of compromise and arrangement filed under the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act in respect of such corporation and certain of its subsidiaries (“Plan”);

     WHEREAS the Plan provides for an issuance by the Corporation of the Warrants (as hereinafter defined) on the date of implementation of the Plan;

     WHEREAS the Corporation has proposed to create and issue Warrants in the manner herein set forth;

     WHEREAS each Warrant entitles the Holder (as hereinafter defined) thereof to purchase from the Corporation one Class A Share (as hereinafter defined) or one Class B Share (as hereinafter defined), as the case may be, subject to adjustment in the manner herein set forth;

     WHEREAS for such purpose the Corporation deems it necessary to create and issue the Warrants constituted and issued in the manner herein;

     WHEREAS the Corporation is duly authorized to create and issue the Warrants as herein provided and complete the transactions contemplated herein;

     WHEREAS all things necessary have been done and performed to make the Warrant Certificates (as hereinafter defined), when certified by the Trustee and issued and delivered as herein provided, legal, valid and binding obligations of the Corporation with the benefits of and subject to the terms of this Indenture;

     WHEREAS the foregoing recitals are made as representations by the Corporation and not by the Trustee;

     WHEREAS the Trustee has agreed to enter into this Indenture and to hold all rights, interests and benefits contained herein for and on behalf of those Persons (as hereinafter defined) who from time to time become Holders of Warrants issued pursuant to this Indenture;

     NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given, the receipt and sufficiency of which, by each of the Corporation and the Trustee, are hereby acknowledged, the Corporation hereby appoints the Trustee as trustee for the Warrantholders, to hold all rights, interests and benefits contained herein for and on behalf of those Persons who from time to time become Holders

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of Warrants issued pursuant to this Indenture, and the parties hereby covenant, agree and declare as follows:

ARTICLE 1
INTERPRETATION

Section 1.1     Definitions.

     In this Indenture and in the Warrant Certificates, the following terms shall have the following meaning unless otherwise indicated:

“Adjustment Period” has the meaning set forth in Section 4.9(1);

“Applicable Legislation” means such provisions of any statute of Canada or of a province thereof, and of regulations under any such statute, relating to trust indentures or to the rights, duties and obligations of corporations and of trustees under trust indentures, as are from time to time in force and applicable to this Indenture;

“Business Day” means a day on which chartered banks are normally open for business in the City of Montreal and the City of Toronto, excluding Saturdays, Sundays and any statutory or civic holiday;

“Canadian” means a Canadian within the meaning ascribed to such term in the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time;

“Canadian Securities Regulatory Authorities” means the securities commissions and similar securities regulatory authorities of all Canadian provinces and territories;

“Class A Shares” means the Class A Restricted Voting Shares in the capital of the Corporation;

“Class B Shares” means the Class B Non-Voting Shares in the capital of the Corporation;

“Corporation” means Microcell Telecommunications Inc., a corporation incorporated under the laws of Canada and includes any successor corporation to or of the Corporation which shall have complied with the provisions of Section 8.2;

“Corporation’s Auditors” means the auditors of the Corporation appointed from time to time in accordance with the provisions of the Canada Business Corporations Act;

“Court” has the meaning set forth in Section 9.8(4);

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“Current Market Price” means the closing trading prices per share of Class A Shares and Class B Shares, respectively, on any particular date (and if such date is not a Business Day, the last Business Day before such date);

“Director” means a director of the Corporation and reference to action by the directors means action by the directors of the Corporation as a board or, whenever duly empowered, action by a committee of the board;

“Effective Date” means May 1, 2003;

“Exercise Date” means with respect to any Warrant exercised by the Holder thereof pursuant to Section 4.1(1), any day after the U.S. Registration Date, on which the Warrant Certificate evidencing such Warrant is surrendered to the Trustee in accordance with the provisions of Section 4.1;

“Exercise Price” means an amount of $19.91, subject to adjustment as herein provided;

“Expiry Date” means, with respect to a Warrant, May 1, 2005, subject to Section 4.10;

“Expiry Time” means 5:00 p.m. (Montreal time) on the Expiry Date;

“Extraordinary Resolution” has the meaning attributed thereto in Section 7.12 and Section 7.15;

“Fundamental Transaction” has the meaning set forth in Section 4.9(3)(a);

“Indenture” means the present Warrant Indenture, as amended from time to time in accordance with its terms;

“Ordinary Course Dividend” means any dividend (payable in cash or securities, property or assets of equivalent value) declared payable on the Shares in any fiscal year of the Corporation and not exceeding, on an aggregate basis, the greater of (i) 10% of the equity of the holders of the Shares at the end of the fiscal year preceding the dividend declaration date and (ii) 150% of the average amount of dividends paid on the Shares in the preceding three (3) fiscal years.

“Person” means an individual, corporation, partnership, trustee or unincorporated organization;

“Registration Statement” means a registration statement filed by the Corporation with the SEC in respect of the Shares issuable upon exercise of the Warrants pursuant to the U.S. Securities Act;

“Residency Declaration” means a declaration by a Warrantholder whether he is Canadian or non-Canadian, in the form annexed as Schedule “A”;

“Share” means a Class A Share or Class B Share, as the case may be;

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“Share Rate” has the meaning set forth in Section 4.9(1);

“SEC” means the U.S. Securities and Exchange Commission;

“Subsidiary” means any corporation or entity of which voting securities or interests carrying more than 50% of the votes attached to all outstanding voting securities or interests of such corporation or entity are owned, directly or indirectly, other than by way of security only, by one or more of the Corporation and any Subsidiary, provided that the Corporation or such Subsidiary is not contractually or otherwise prohibited or restricted from exercising sufficient of the voting rights attached to such voting securities or interests to elect at least a majority of the directors of such corporation;

“Trustee” means Computershare Trust Company of Canada, and its successors;

“U.S.” means the United States of America, its territories or possessions, any state thereof or the District of Columbia collectively;

“U.S. Person” has the meaning ascribed thereto in Regulation S adopted pursuant to the U.S. Securities Act;

“U.S. Registration Date” means the fifth Business Day following the date upon which the Registration Statement has been declared effective by the SEC;

“U.S. Securities Act” means the U.S. Securities Act of 1933, as amended;

“Warrant Certificate” means a certificate evidencing one or more Warrants, substantially in the form attached hereto as Schedule “B”;

“Warrantholders” or “Holders” means the Persons for the time being entered in a register of holders described in Section 3.1 as holders of Warrants;

“Warrantholders’ Request” means an instrument, signed in one or more counterparts by Warrantholders who hold in the aggregate not less than 20% of the total number of Warrants then outstanding, requesting the Trustee to take some action or proceeding specified therein;

“Warrants” means, collectively, the warrants of the Corporation created and issued pursuant to this Indenture entitling registered Holders thereof to receive one Class A Share or one Class B Share, as the case may be (subject to adjustment), upon the exercise of such Warrant pursuant to Article 4;

“Written Order of the Corporation”, “Written Request of the Corporation”, “Written Consent of the Corporation”, “Written Direction of the Corporation” and “Certificate of the Corporation” mean, respectively, a written order, request, consent, direction and certificate signed in the name of the Corporation by any director or officer of the Corporation or by any other individual to whom such signing authority is delegated by the directors from time to time, and may consist of one or more instruments so executed.

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Section 1.2     Words Importing the Singular.

Words importing the singular include the plural and vice versa and words importing a particular gender include both genders.

Section 1.3     Interpretation Not Affected by Headings, Etc.

     The division of this Indenture into Articles, Sections, Subsections, paragraphs, subparagraphs, clauses and subclauses, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture or the Warrants.

Section 1.4     Day Not a Business Day.

     If the day on or before which any action that would otherwise be required to be taken hereunder is not a Business Day in the place where the action is required to be taken, that action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day.

Section 1.5     Time of the Essence.

     Time shall be of the essence in all respects in this Indenture and the Warrant Certificates.

Section 1.6     Currency.

     Except as otherwise stated, all dollar amounts herein and in the Warrant Certificates are expressed in Canadian dollars.

Section 1.7     Applicable Law.

     This Indenture and the Warrant Certificates shall be construed and enforced in accordance with the laws of the Province of Quebec and the federal laws of Canada applicable therein and shall be treated in all respects as Quebec contracts.

Section 1.8     Severability.

     In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect such determination shall not affect such provision in any other respect or any other provision hereof, all of which shall remain in full force and effect.

Section 1.9     Conflicts.

     In the event there is any conflict between this Indenture and any Warrant Certificates or Schedules to this Indenture, the provisions of this Indenture shall govern and prevail.

Section 1.10     Meaning of “Outstanding”.

     Subject to Section 7.17, every Warrant represented by a Warrant Certificate countersigned and delivered by the Trustee hereunder shall be deemed to be outstanding until it shall be cancelled or delivered to the Trustee for cancellation or until the Expiry Time; provided that where a new Warrant Certificate has been issued pursuant to Section 2.7 to replace one which has been mutilated, lost, stolen or destroyed, the Warrants

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represented by only one of such Warrant Certificates shall be counted for the purpose of determining the aggregate number of Warrants outstanding.

Section 1.11     Schedules.

     The following Schedules, attached hereto, form part of this Indenture:

Schedule A	- -	Form of Residency Declaration
Schedule B	- -	Form of Warrant Certificate

ARTICLE 2
THE WARRANTS

Section 2.1     Creation and Issue of Warrants.

(1)	Creation of Warrants. A maximum of 3,987,937 Warrants entitling the Holders thereof to be issued, subject to adjustment in accordance with Section 4.9, a maximum aggregate number of 3,987,937 Class A Shares and/or Class B Shares on the terms and subject to the conditions herein provided, are hereby created and authorized for issue.
(2)	Issuance of Warrants. The Corporation will issue the Warrants to Warrantholders as of the Effective Date.
(3)	Certification of Warrants. As of the Effective Date, upon the issue of the Warrants, Warrant Certificates shall be executed by the Corporation and delivered to the Trustee, certified by the Trustee upon the Written Order of the Corporation and delivered by the Trustee pursuant to a Written Direction of the Corporation, without any further act of or formality on the part of the Corporation and without the Trustee receiving any consideration therefor.

Section 2.2     Terms of Warrants.

(1)	Exercise Terms. At any time commencing after the U.S. Registration Date and terminating at the Expiry Time, each Warrant issued hereunder shall entitle the Holder thereof, upon the exercise thereof and the payment of the Exercise Price in accordance with the provisions of Article 4, to be issued one Class A Share or one Class B Share, as the case may be, subject to adjustment as provided herein.
(2)	Adjustment. The number of Shares which may be issued upon exercise of the Warrants will be adjusted in the events and in the manner specified in Section 4.9 hereof.
(3)	Purchase by Corporation. The Corporation or any Subsidiary may, from time to time, purchase Warrants in the open market, by private agreement or otherwise, and any such purchase may be made in such manner, from such Persons, at such prices and on such terms as the Corporation or such Subsidiary in its sole discretion may determine. The Corporation shall instruct the Trustee, by a Written Direction of the Corporation, to cancel the Warrants so purchased.

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Section 2.3     Form of Warrant Certificates.

(1)	Form. The Warrant Certificates will be in the form attached hereto as Schedule “B”, will be dated as of the Effective Date, will bear such distinguishing letters and numbers as the Corporation, with the approval of the Trustee, may prescribe and such legends as the Corporation may prescribe and will be issuable in whole number denomination only.
(2)	Production. The Warrant Certificates may be engraved, lithographed or printed (the expression “printed” including for purposes hereof both original typewritten material as well as mimeographed, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Corporation may determine.
(3)	Warrant Certificates Legends. Upon the original issuance of Warrant Certificates and until the U.S. Registration Date, the Warrant Certificates, shall bear the following legend:

“THE SECURITIES ISSUABLE UPON THE EXERCISE OF THE WARRANTS EVIDENCED BY THE PRESENT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“U.S. SECURITIES ACT”). WARRANTS EVIDENCED BY THIS WARRANT CERTIFICATE MAY NOT BE EXERCISED UNTIL THE FIFTH BUSINESS DAY FOLLOWING THE DATE A REGISTRATION STATEMENT IN RESPECT OF THE SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS FILED PURSUANT TO THE U.S. SECURITIES ACT IS DECLARED EFFECTIVE BY THE U.S. SECURITIES AND EXCHANGE COMMISSION.”

Section 2.4     Signing of Warrant Certificates.

(1)	Signing Officers. The Warrant Certificates will be signed by one of the President, Chief Financial Officer, a Vice-President or Secretary of the Corporation or by any other individual to whom such signing authority is delegated by the directors of the Corporation from time to time.
(2)	Signatures. The signatures of any of the officers or individuals referred to in Section 2.4(1) may be manual signatures, engraved, lithographed or printed in facsimile and Warrant Certificates bearing such facsimile signatures will, subject to Section 2.5, be binding on the Corporation as if they had been manually signed by such officers or individuals.
(3)	No Longer Officer. Notwithstanding that any Person whose manual or facsimile signature appears on a Warrant Certificate as one of the officers or individuals referred to in Section 2.4(1) no longer holds the same or any other office with the Corporation at the date of issue of any Warrant Certificate or at the date of certification or delivery thereof, such Warrant Certificate will, subject to Section 2.5, be valid and binding on the Corporation.

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Section 2.5     Certification by Trustee.

(1)

Certification. No Warrant Certificate will be issued or, if issued, will be valid or entitle the Holder to the benefits hereof until it has been certified by signature (which may be manual, engraved, lithographed or printed in facsimile) by or on behalf of the Trustee in the form of Warrant Certificate attached hereto as Schedule “B”. The certification by the Trustee on a Warrant Certificate will be conclusive evidence as against the Corporation that such Warrant Certificate has been issued hereunder and that the Holder thereof is entitled to the benefits hereof.

(2)

Certification No Representation. The certification by the Trustee on any Warrant Certificate issued hereunder will not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or such Warrant Certificate (except the due certification thereof) or as to the performance by the Corporation of its obligations under this Indenture and the Trustee will in no respect be liable or answerable for the use made of any Warrant Certificate or of the consideration therefor, except as otherwise specified herein.

Section 2.6     Warrants to Rank Pari Passu.

     All Warrants will rank pari passu, irrespective of the actual dates of issue of the Warrant Certificates by which they are evidenced.

Section 2.7     Issue in Substitution for Lost Certificates, Etc.

(1)

Substitution. If any Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to Section 2.7(2), will issue, and thereupon the Trustee will certify and deliver, a new Warrant Certificate of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and on surrender and cancellation of such mutilated certificate or in lieu of and in substitution for such lost, destroyed or stolen certificate.

(2)

Cost and Conditions of Substitution. The applicant for the issue of a new Warrant Certificate pursuant to this Section 2.7 will bear the reasonable cost of the issue thereof and in the case of loss, destruction or theft will, as a condition precedent to the issue thereof:

(a)	furnish to the Corporation and to the Trustee such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate to be replaced as is satisfactory to the Corporation and to the Trustee in their discretion, acting reasonably;
(b)	if so requested, furnish an indemnity in amount and form satisfactory to the Corporation and to the Trustee in their discretion, acting reasonably; and
(c)	pay the reasonable charges of the Corporation and the Trustee in connection therewith.

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Section 2.8     Cancellation of Surrendered Warrants.

     All Warrant Certificates surrendered to the Trustee in accordance with the provisions of this Indenture will be cancelled by the Trustee and, if requested in writing in advance by the Corporation, the Trustee will furnish the Corporation with a cancellation certificate identifying each Warrant Certificate so cancelled and the number of Warrants evidenced thereby.

Section 2.9     Warrantholder not a Shareholder.

     Nothing in this Indenture or in the holding of a Warrant evidenced by a Warrant Certificate, or otherwise, will be construed as conferring on any Warrantholder any right or interest whatsoever in the Shares to be issued as a shareholder of the Corporation, including but not limited to any right to vote at, to receive notice of, or to attend any meeting of shareholders or any other proceeding of the Corporation or any right to receive any dividend or other distribution in respect of the Shares.

ARTICLE 3
REGISTRATION, TRANSFER, EXCHANGE AND
OWNERSHIP OF WARRANTS

Section 3.1     Registration and Transfer of Warrants.

(1) Register. The Corporation will cause to be kept by the Trustee, at the principal corporate actions trust office in Toronto of the Trustee and in such additional place or places as the Corporation, with the approval of the Trustee, may determine:

(a)	a register of Holders in which shall be entered in alphabetical order the names and addresses of the Holders of Warrants and particulars of the Warrants held by them; and
(b)	a register of transfers in which all transfers of Warrants and the date and other particulars of each such transfer shall be entered.

(2)

Transfer. No transfer of any Warrant will be valid unless entered on the register of transfers referred to in Section 3.1(1), or on any branch registers maintained pursuant to Section 3.1(7), upon surrender to the Trustee of the Warrant Certificate evidencing such Warrant, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee executed by the Holder or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee, and, upon compliance with such requirements and such other reasonable requirements as the Trustee and the Corporation may prescribe, such transfer will be duly noted on one of such registers of transfers by the Trustee.

(3)

Register of Transfers. The transferee of any Warrant will, after surrender to the Trustee of the Warrant Certificate evidencing such Warrant as required by Section 3.1(2) and upon compliance with all other conditions in respect thereof required by this Indenture or by law, be entitled to be entered on the register of Holders referred to in Section 3.1(1), or on any branch registers of Holders

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	maintained pursuant to Section 3.1(7), as the owner of such Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the transferor or any previous Holder of such Warrant, except in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.
(4)	Refusal of Registration. The Corporation will be entitled, and may direct the Trustee, to refuse to recognize any transfer, or enter the name of any transferee, of any Warrant on the registers referred to in Section 3.1(1), or on any branch registers maintained pursuant to Section 3.1(7), if such transfer would constitute a violation of the securities laws of any jurisdiction or the rules, regulations or policies of any regulatory authority having jurisdiction.
(5)	No Notice of Trusts. Subject to applicable law, neither the Corporation nor the Trustee will be bound to take notice of or see to the execution of any trust, whether express, implied or constructive, in respect of any Warrant, and may transfer any Warrant on the direction of the Person registered as the Holder thereof, whether named as trustee or otherwise, as though that Person were the beneficial owner thereof.
(6)	Inspection. The registers referred to in Section 3.1(1), and any branch registers maintained pursuant to Section 3.1(7), will at all reasonable times be open for inspection by the Corporation and any Warrantholder. The Trustee will from time to time when requested to do so in writing by the Corporation or any Warrantholder (upon payment of the Trustee’s reasonable charges), furnish the Corporation or such Warrantholder, as the case may be, with a list of the names and addresses of Holders of Warrants entered on such registers and showing the number of Warrants held by each such Holder.
(7)	Location of Registers. The Corporation may, at any time and from time to time, change the place at which the registers referred to in Section 3.1(1) are kept, cause branch registers of Holders or transfers to be kept at other places (including in the U.S.) and close such branch registers or change the place at which such branch registers are kept, in each case subject to the approval of the Trustee if same relates to registers kept by the Trustee. Notice of all such changes or closures shall be given by the Corporation to the Trustee and to Holders of Warrants in accordance with Section 10.2.

Section 3.2     Exchange of Warrant Certificates.

(1)	Exchange. One or more Warrant Certificates may, on compliance with the reasonable requirements of the Trustee, be exchanged for one or more Warrant Certificates of different denominations evidencing in the aggregate the same number of Warrants entitling the Holder thereof to be issued the same aggregate number of Shares as the Warrant Certificate or Warrant Certificates being exchanged.
(2)	Place of Exchange. Warrant Certificates may be exchanged only at the principal corporate actions trust office in Toronto of the Trustee or at any other place designated by the Corporation with the approval of the Trustee.

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(3)	Cancellation. Any Warrant Certificate tendered for exchange pursuant to Section 3.2 shall be surrendered to the Trustee and cancelled.
(4)	Execution. The Corporation will sign all Warrant Certificates necessary to carry out exchanges pursuant to Section 3.2 and such Warrant Certificates will be certified by the Trustee.

Section 3.3     No Charges for Transfer or Exchange.

     No charge will be levied on a presenter of a Warrant Certificate pursuant to this Indenture for the transfer of any Warrant or the exchange of any Warrant Certificate.

Section 3.4     Ownership of Warrants.

(1)

Owner. The Corporation and the Trustee may deem and treat the Person or Persons in whose name any Warrant is registered as the absolute owner (or joint-owners, as the case may be) of such Warrant for all purposes, and such Person or Persons will for all purposes of this Indenture be and be deemed to be the absolute owner thereof, and the Corporation and the Trustee will not be affected by any notice or knowledge to the contrary except as required by statute or by order of a court of competent jurisdiction.

(2)

Rights of Registered Holder. The registered Holder of any Warrant will be entitled to the rights evidenced thereby free from all equities and rights of set-off or counterclaim between the Corporation and the original or any intermediate Holder thereof and all Persons may act accordingly, and the issue and delivery to any such registered Holder of the Shares issuable pursuant thereto will be a good discharge to the Corporation and the Trustee therefor and neither the Corporation nor the Trustee will be bound to inquire into the title of any such registered Holder.

ARTICLE 4
EXERCISE OF WARRANTS

Section 4.1     Exercise.

(1) Exercise. Subject to the limitations set forth in Section 4.1(6) and Section 4.8, the Holder of any Warrant may, at any time after the U.S. Registration Date but on or before the Expiry Time, exercise the right thereby conferred to be issued Class A Shares or Class B Shares, as the case may be, by surrendering to the Trustee, at the principal corporate actions trust office in Toronto of the Trustee, or to any other Person or at any other place designated by the Corporation with the approval of the Trustee, during normal business hours on a Business Day at such place, the Warrant Certificate evidencing such Warrant, accompanied by (i) a duly completed and executed notice of exercise substantially in the form set out in such Warrant Certificate; (ii) a certified cheque or bank draft to the order of the Corporation in the amount of the aggregate Exercise Price payable on account of the Warrants exercised; and (iii) a duly completed and executed Residency Declaration in the form attached as Schedule “A”, certifying whether the Warrantholder is Canadian or non-Canadian. Warrantholders which fail to provide duly completed and executed Residency Declarations shall be deemed not to be a Canadian. Upon exercise,

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	Canadian Warrantholders shall be entitled to be issued Class A Shares and non-Canadian Warrantholders shall be entitled to be issued Class B Shares.
(2)	Notice of U.S. Registration Date. As soon as practicable after the Registration Statement has been declared effective by the SEC, the Corporation shall give notice in writing to the Trustee of the U.S. Registration Date and shall issue a press release announcing the U.S. Registration Date.
(3)	Surrender of Warrant Certificates. Any Warrant Certificate accompanied by the documents referred to in Section 4.1(1) will be deemed to have been surrendered to the Trustee only on personal delivery thereof to, or, if sent by mail or other means of transmission, on actual receipt thereof by, the Trustee or one of the other Persons at the office or one of the other places specified in Section 4.1(1).
(4)	Notice of Exercise. Any notice of exercise referred to in Section 4.1(1) must be signed by the Warrantholder, or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee, acting reasonably, and, if any Shares thereby issuable are to be issued to a Person or Persons other than the Warrantholder, must specify the name or names and the address or addresses of each such Person or Persons and the number of Shares to be issued to each such Person if more than one is so specified and accompanied by a duly completed and executed Residency Declaration of each Person to whom Shares are to be issued. If Shares are to be issued to more than one Person and if all Residency Declarations certify that all such Persons are Canadians, Class A Shares shall be issued to all such Persons; in any other case, Class B Shares shall be issued to all such Persons.
(5)	Exercise of Less than All. A Warrantholder who wishes to exercise the Warrants evidenced by any Warrant Certificate may exercise less than all of such Warrants and in the case of any such partial exercise shall be entitled to receive a Warrant Certificate, in form, signed and certified in accordance with the provisions of Article 2, evidencing the number of Warrants held by the Warrantholder which remain unexercised.
(6)	No Exercise before U.S. Registration Date. The Warrants may not be exercised, nor will certificates representing Shares be registered or delivered to any Warrantholder, before the U.S. Registration Date has occurred. Any notice of exercise of Warrants received before the U.S. Registration Date has occurred will be returned (together with all documentation accompanying such notice pursuant to Section 4.1(1)) to the Warrantholder who sent such notice if held by the Corporation for a period in excess of ten (10) Business Days.

Section 4.2     Effect of Exercise.

(1) Effect of Exercise. Upon the exercise of any Warrants in accordance with Section 4.1, the Shares thereby issuable shall be deemed to have been issued, and the Person or Persons to whom such Shares are to be issued shall be deemed to have become the holder or holders of record thereof, on the Exercise Date, unless the transfer registers for the Shares are closed on that date, in which case such Shares shall be deemed to

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	have been issued and such Person or Persons shall be deemed to have become the holder or holders of record thereof on the date on which such transfer registers are reopened, but such Shares shall be issued on the basis of the number of Shares to which such Person or Persons were entitled on the Exercise Date.
(2)	Mailing of Certificates. As soon as reasonably practicable (and, in any event, within five Business Days) after the surrender to the Trustee of the Warrant Certificates in accordance with Section 4.1(3), the Corporation shall, subject to the provisions of Section 4.7, cause the Trustee to mail to the Person or Persons in whose name or names the Shares thereby issued have been issued, at his or their respective addresses, or, if so specified, cause to be delivered to such Person or Persons at the place where the Warrant Certificates evidencing such Warrants were surrendered, certificates representing the Shares so issued.
(3)	Issuance to Person other than Holder. If any Shares issuable pursuant to any Warrants are to be issued to a Person or Persons other than the Warrantholder, the Warrantholder must pay to the Corporation or to the Trustee on its behalf an amount equal to all eligible transfer taxes or other government charges, and neither the Corporation nor the Trustee will be required to issue or deliver any certificates representing any such Shares unless or until such amount has been so paid or the Warrantholder has established to the satisfaction of the Corporation that such taxes and charges have been paid or that no such taxes or charges are owing.
(4)	Restrictions. If at the time of exercise of the Warrants there remain trading restrictions on the Shares pursuant to applicable securities legislation, the Corporation or the Trustee may, upon the advice of counsel, endorse any Shares to such effect.

Section 4.3     No Fractional Shares.

     The Corporation shall not be required to issue fractional Shares in satisfaction of its obligations hereunder. To the extent that a Holder of Warrants would otherwise have been entitled to receive on the exercise of the Warrants a fraction of a Share, such Shares shall be rounded down to the nearest whole number without any compensation therefor.

Section 4.4     Warrants Void After Expiry Time.

     After the Expiry Time, no Holder of a Warrant Certificate representing a Warrant which has not been validly exercised as set forth herein has any rights either under this Indenture or the Warrant Certificate, and the Warrants are void and of no value or effect. All provisions of this Indenture are subject to this Section.

Section 4.5     Notice of Expiry Time.

     At least twenty (20), and not more than thirty (30) Business Days prior to the Expiry Time, the Trustee shall provide notice to each registered Holder of unexercised Warrants that the Warrants held by such Holder will expire at the Expiry Date which notice shall be prepared by the Corporation and delivered to the Trustee for its distribution to Warrantholders. The notice shall provide for (i) the Expiry Time; (ii) the manner in which the Warrants may be exercised by the Holder thereof; and (iii) the consequences of non-exercise by the Holder prior to the Expiry Time.

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Section 4.6     Recording.

     The Trustee shall record particulars of each Warrant exercised, which particulars shall include the name and address of each Person to whom Shares are thereby issued, the number of Shares so issued and the Exercise Date in respect thereof. Within three Business Days after each Exercise Date, the Trustee shall provide such particulars in writing to the Corporation.

Section 4.7     Postponement of Delivery of Certificates.

     The Corporation shall not be required to deliver certificates for Shares during the period when the transfer books of the Corporation are closed by law and, in the event that the Exercise Date occurs during such period, the delivery of certificates may be postponed for a period not exceeding five Business Days after the date of the re-opening of the transfer books.

Section 4.8     Securities Restrictions.

     The certificates representing the Shares thereby issued will bear such legends as may, in the opinion of counsel to the Corporation, be necessary or advisable in order to avoid a violation of any securities laws of any applicable jurisdiction or to comply with the requirements of any stock exchange on which the Shares are listed, provided that if, at any time, in the opinion of counsel to the Corporation, such legends are no longer necessary or advisable in order to avoid a violation of any such laws or requirements, such legended certificate may thereafter be surrendered to the Corporation in exchange without charge for a certificate which does not bear such legend.

Section 4.9     Adjustments.

(1)

Adjustment. The rights of the Warrantholders, including in relation to the number of Shares issuable upon the exercise of a Warrant, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Section, and for such purposes and as used in this Section, (i) “Adjustment Period” means the period commencing immediately after the Effective Date and ending at the Expiry Time, and (ii) “Share Rate” means the rate at which the Shares are issuable upon the exercise of a Warrant, which rate, subject to adjustment pursuant to this Section will be one Share for each Warrant as of and from the date hereof.

(2)

Share Rate. The Share Rate in effect at any date will be subject to adjustment from time to time as follows:

(a) If and whenever at any time during the Adjustment Period, the Corporation shall:

(i)	subdivide or redivide the outstanding Shares into a greater number of Shares;
(ii)	consolidate, combine or reduce the outstanding Shares into a lesser number of Shares; or

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(iii)	issue Shares to all or substantially all of the holders of Shares by way of a stock dividend or other distribution (other than an Ordinary Course Dividend),
then, in each such event, the Share Rate will, on the effective date of or the record date for such event, be adjusted by multiplying the Share Rate in effect immediately prior to such date by a fraction:
(i)	the numerator of which shall be the total number of Shares outstanding on such date after giving effect to such event; and
(ii)	the denominator of which shall be the total number of Shares outstanding on such date before giving effect to such event.
Such adjustment will be made successively whenever any such event shall occur. Any such issue of Shares by way of a stock dividend or other distribution shall be deemed to have been made on the record date for such stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under paragraph 4.9(2)(b) and paragraph 4.9(2)(c).

(b) If and whenever, at any time during the Adjustment Period, the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of Shares entitling the holders thereof, within a period expiring not more than 50 days after the record date for such issue, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such issuance, then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)	the numerator of which shall be the total number of Shares outstanding on such record date plus the total number of additional Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable); and
(ii)	the denominator of which shall be the aggregate of (A) the number of Shares outstanding on such record date and (B) a number determined by dividing the aggregate subscription or purchase price of the total number of additional Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by the Current Market Price as of the applicable record date.
Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such

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computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon the number of Shares (or securities convertible into or exchangeable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

(c) If and whenever at any time during the Adjustment Period the Corporation shall fix a record date for the making of a distribution to all or substantially all of the holders of Shares of:

(i)	shares of any class other than Shares, whether of the Corporation or any other corporation;
(ii)	rights, options or warrants other than rights options or warrants referred to in paragraph Section 4.9(2)(b);
(iii)	evidence of indebtedness; or
(iv)	cash, securities or other property or assets (other than an Ordinary Course Dividend);

then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)	the numerator of which shall be the total number of Shares outstanding on such record date multiplied by the Current Market Price on such record date; and
(ii)	the denominator of which shall be (A) the product of the number of Shares outstanding on such record date and the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such distribution reduced by (B) the aggregate fair market value (as determined by the directors at the time such distribution is authorized) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets to be so distributed.
Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date

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	had not been fixed or to the Share Rate which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be.
(d)	In the absence of a resolution of the directors fixing a record date for any event referred to in this Section, the Corporation shall be deemed to have fixed as the record date therefor the earlier of the date on which holders of record of Shares are determined for the purpose of participating in such event and the date on which such event becomes effective.
(e)	If whenever at any time after the Effective Date and ending at the Expiry Time, any of the events referred to in Section 4.9(2)(a), (b) or (c) occurs and if such event results in an adjustment to the Share Rate, the Exercise Price shall be adjusted contemporaneously with each such adjustment of the Share Rate (including, for greater certainty, any readjustment of the Share Rate if and to the extent that a distribution or issuance of securities or exercise of rights, warrants or options pursuant to Section 4.9(2)(b) or (c) is not completed) by multiplying the Exercise Price in effect immediately prior to the occurrence of such event by a fraction:

(i)	the numerator of which shall be the number of Shares outstanding immediately before giving effect to such event; and
(ii)	the denominator of which shall be the number of Shares outstanding immediately after giving effect to such event.

(3) Fundamental Transactions.

(a) If and whenever at any time during the Adjustment Period, there is (i) any reclassification of the Shares at any time outstanding or any change of the Shares into other shares, securities or property of the Corporation, or any other capital reorganization of the Corporation of similar effect (other than as described in Section 4.9(2)), (ii) any amalgamation, arrangement, merger or other form of business combination of the Corporation with or into any other corporation resulting in any reclassification of the outstanding Shares or change of the Shares into other shares, securities or property of the Corporation or such other corporation, or (iii) any sale, lease, exchange or transfer all or substantially all of the undertaking or assets of the Corporation and/or the Subsidiaries of the Corporation to another corporation or entity not wholly-owned by the Corporation (each of the transactions contemplated in (i), (ii) and (iii), hereinafter, a “Fundamental Transaction”), then, in each such event, each Holder of any Warrant which is thereafter exercised will be entitled to receive, and shall accept, in lieu of the number of Shares to which such Warrantholder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such

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	Holder would have been entitled to receive as a result of the Fundamental Transaction if, on the effective date thereof, such Warrantholder had been the registered holder of the number of Shares to which such Warrantholder was theretofore entitled upon such exercise.
(b)	If and whenever at any time during the Adjustment Period, there is a Fundamental Transaction which provides for holders of the outstanding Shares to receive consideration solely in the form of cash, each Warrantholder shall be deemed (i) where such cash consideration is, on a per Share basis, in an amount greater than the Exercise Price, to exercise its Warrants and such Warrantholder shall be entitled to receive, upon such deemed exercise, the cash consideration which such holder would have been entitled to receive had such exercise of Warrants taken place immediately prior to such Fundamental Transaction, less the Exercise Price thereof or (ii) where the cash consideration is, on a per Share basis, equal to or less than the Exercise Price, to surrender its Warrants, without payment of any consideration. Following such deemed exercise, all Warrants shall be cancelled and of no further value or effect.
If necessary as a result of any Fundamental Transaction, appropriate adjustments will be made in the application of the provisions set forth in this Section with respect to the rights and interests thereafter of the Holders of Warrants to the end that the provisions set forth in this Section will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares or other securities or property thereafter deliverable upon the exercise of any Warrant. Any such adjustments will be made by and set forth in an indenture supplemental hereto approved by the directors and by the Trustee and shall for all purposes be conclusively deemed to be an appropriate adjustment.

(4)

Deferral of Adjustment. In any case in which this Section shall require that an adjustment shall become effective immediately after a record date for or an effective date of an event referred to herein, the Corporation may defer, until the occurrence and consummation of such event, issuing to the Holder of any Warrant exercised after such record date or effective date and before the occurrence and consummation of such event the additional Shares or other shares, securities or property issuable upon such exercise by reason of the adjustment required by such event, provided, however, that the Corporation will deliver to such Holder an appropriate instrument evidencing such Holder’s right to receive such additional Shares or other shares, securities or property upon the occurrence and consummation of such event and the right to receive any dividend or other distribution in respect of such additional Shares or other shares, securities or property declared in favour of the holders of record of Shares or of such other shares, securities or property on or after the Exercise Date or such later date as such holder would, but for the provisions of this Subsection, have become the holder of record of such additional Shares or of such other shares, securities or property pursuant hereto.

(5)

Adjustments Cumulative. The adjustments provided for in this Section are cumulative, shall, in the case of any adjustment to the Share Rate, be computed to

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	the nearest one one-hundredth of a Share and will apply (without duplication) to successive subdivisions, consolidations, distributions, issuances or other events resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, no adjustment of the Share Rate will be required (i) unless such adjustment would require an increase or decrease of at least 1% in the Share Rate then in effect (provided, however, that any adjustment which by reason of this Subsection is not required to be made will be carried forward and taken into account in any subsequent adjustment), (ii) if, in respect of any event described in this Section (other than the events referred to in Section 4.9(2)(a)(i), Section 4.9(2)(a)(ii) and Section 4.9(3)), the Holders of Warrants are entitled to participate in such event, or are entitled to participate within 45 days in a comparable event, on the same terms, mutatis mutandis as if the Warrants had been exercised prior to or on the effective date of or record date for such event, (iii) in respect of any Shares issuable or issued pursuant to any stock option or stock purchase plan in force from time to time for directors, officers or employees of the Corporation or of a Subsidiary or pursuant to the Warrants, (iv) in respect of any Shares issued on the exercise of any other stock options issued by the Corporation and outstanding on the date hereof, or (v) in respect of Shares issued on the conversion into Shares of preferred shares in the capital of the Corporation outstanding on the date hereof.
(6)	Resolution of Questions. In the event of any question arising with respect to the adjustments provided for in this Section, such questions shall be conclusively determined by the Corporation’s Auditors or, if they are unable or unwilling to act, by such firm of chartered accountants as is appointed by the Corporation and acceptable to the Trustee. Such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Trustee and the Warrantholders. If any such determination is made, the Corporation shall forthwith deliver a certificate to the Trustee describing such determination and give notice to the Warrantholders of such determination.
(7)	Other Actions. If and whenever at any time during the Adjustment Period, the Corporation shall take any action affecting or relating to the Shares, other than any action described in this Section, which in the opinion of the directors, acting reasonably, would prejudicially affect the rights of any Holders of Warrants, the Share Rate will be adjusted by the directors in such manner, if any, and at such time, as the directors may in their sole discretion determine to be equitable in the circumstances to such Holders.
(8)	Additional Actions. As a condition precedent to the taking of any action which would require an adjustment in any of the rights under the Warrants, the Corporation will take any action which may, in the opinion of counsel to the Corporation be necessary in order that the Corporation, or any successor to the Corporation or successor to the undertaking or assets of the Corporation, will be obligated to and may validly and legally issue all of the Shares or other shares, securities or property which the Holders of Warrants would be entitled to receive thereafter on the exercise thereof in accordance with the provisions hereof.

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(9) Notice to Trustee. As soon as possible after the effective date of or record date for any event referred to in this Section that requires or might require an adjustment in any of the rights under the Warrants, the Corporation will:

(a)	file with the Trustee, a Certificate of the Corporation specifying the particulars of such event and, to the extent determinable, any adjustment required and the computation of such adjustment; and
(b)	give notice to the Warrantholders of the particulars of such event and, to the extent determinable, any adjustment required.
Such notice need only set forth such particulars as have been determined at the date such notice is given. If any adjustment for which such notice is given is not then determinable, promptly after such adjustment is determinable the Corporation will:

(i)	file with the Trustee a Certificate of the Corporation showing the computation of such adjustment; and
(ii)	give notice to the Warrantholders of such adjustment.
The Trustee may act and rely, for all purposes, upon the certificate and any other documents filed by the Corporation pursuant to this Section.

(10)	Closing Transfer Books, etc. The Corporation will not close its transfer books or take any other corporate action which might deprive the Holder of a Warrant of the opportunity of exercising its right of acquisition pursuant thereto during the period of ten Business Days after the giving of any notice required by Section 4.9(9).
(11)	No Duty of Trustee. The Trustee:

(a)	shall not at any time be under any duty or responsibility to any Warrantholder to determine whether any facts exist which may require any adjustment in the Share Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making same;
(b)	shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or of any other shares, securities or property which may at any time be issued or delivered upon the exercise of any Warrant; and
(c)	shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or share or warrant certificates upon the surrender of any Warrant for the purpose of exercise, or to comply with any of the covenants contained in this Section.

(12) Post-Adjustment. After any adjustment pursuant to this Section, the term “Shares” where used in this Indenture shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, the Warrantholder is entitled to receive upon the exercise of its

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Warrants, and the number of Shares indicated in any exercise made pursuant to a Warrant shall be interpreted to mean the number of securities and other property and assets which, as a result of such adjustment and all prior adjustments pursuant to this Section 4.9, a Warrantholder is entitled to receive upon the exercise of a Warrant.

Section 4.10     Extension by Corporation.

     The directors of the Corporation may, from time to time and at any time prior to the Expiry Time, extend the Expiry Date hereunder without the consent of the Warrantholders or the Trustee, by giving notice in writing to the Trustee of a date which shall thereafter be the “Expiry Date” for all purposes hereunder. The Expiry Date shall be deemed so extended from and after delivery of the said notice.

ARTICLE 5
COVENANTS OF THE CORPORATION

Section 5.1     Covenants of the Corporation.

     The Corporation covenants with the Trustee that until the Expiry Time:

(1)	Maintenance. The Corporation will at all times maintain its corporate existence (subject to Section 8.2), carry on and conduct its business, and that of its material Subsidiaries, in a proper, efficient and business-like manner and keep or cause to be kept proper books of account in accordance with generally accepted accounting practice.
(2)	Reservation of Shares. The Corporation will reserve and keep available sufficient unissued Class A Shares and Class B Shares to enable it to satisfy its obligations on the exercise of the Warrants.
(3)	Warrants and Issue of Shares. The Warrants shall, when countersigned and registered as herein provided, be valid and enforceable against the Corporation and, subject to the provisions of the Indenture, the Corporation will cause the Shares from time to time issued pursuant to the exercise of the Warrants, and the certificates representing such Shares, to be issued and delivered in accordance with the Warrants and the terms hereof and all Shares that are issued on exercise of the Warrants will be fully paid and non-assessable shares.
(4)	Open Registers. The Corporation will cause the Trustee to keep open the registers of Holders and registers of transfers referred to in Section 3.1 as required by such Section and will not take any action or omit to take any action which would have the effect of preventing the Warrantholders from exercising any of the Warrants or receiving any of the Shares upon such exercise.
(5)	Further Assurances. The Corporation will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances as the Trustee may reasonably require for better accomplishing and affecting the provisions of this Indenture.

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(6)

Trustee’s Remuneration. The Corporation shall pay (and shall be responsible for the payment thereof) to the Trustee, reasonable remuneration agreed to in writing for its services hereunder and will repay to the Trustee, upon delivery of original invoices therefor, the amount of all reasonable out-of-pocket expenditures that the Trustee reasonably incurs in the execution of its obligations hereunder with respect to the Warrants without duplication of any amounts otherwise claimed or paid to the Trustee, including reasonable fees and disbursement reasonably incurred by counsel and all other advisors reasonably retained by the Trustee in connection herewith.

(7)

Filings.

(a)	The Corporation will prepare and file, on a date not earlier than six months and not later than seven months from the date hereof, the Registration Statement, will use its reasonable commercial efforts to have the SEC declare the Registration Statement effective as soon as possible thereafter, and will use its commercially reasonable efforts to cause the Registration Statement to remain effective until the applicable Expiry Date, unless the Corporation delivers to the Trustee an opinion of a nationally-recognized U.S. securities counsel to the effect that continued effectiveness of the Registration Statement is not required in order for the Corporation to permit exercises of Warrants in compliance with the U.S. Securities Act;
(b)	The Corporation will prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the applicable Expiry Date (subject to Section 5.1(7)(a)); and
(c)	If required under securities or “blue sky” laws of any applicable jurisdiction, the Corporation will use commercially reasonable efforts to register or qualify for distribution the Shares issued upon the exercise of the Warrants in such jurisdiction, provided that the Corporation will not be required in connection therewith to file a general consent to service of process, qualify as a foreign corporation doing business in such jurisdiction or comply with any other requirement reasonably deemed by the Corporation to be unduly burdensome.

(8)	Listing. The Corporation will use its reasonable commercial efforts to maintain the listing of the Warrants and the Shares on the Toronto Stock Exchange.
(9)	General Performance. The Corporation will perform and carry out all acts and things to be done by it as provided in this Indenture.

Section 5.2     Performance of Covenants by Trustee.

     If the Corporation fails to perform any of its obligations under this Indenture, the Trustee may notify the Warrantholders of such failure or may itself perform any of such obligations capable of being performed by it, but will not be bound to do so or to notify the Warrantholders that it is so doing. All reasonable sums expended or advanced by the Trustee in performance of its rights provided for in this Section 5.2 shall be repayable by the

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Corporation in pro rata proportions based on the sums expended that are attributable to its failure to perform hereunder, upon presentation by the Trustee of receipts therefore. No such performance, expenditure or advance by the Trustee shall be deemed to relieve the Corporation of any default hereunder.

ARTICLE 6
ENFORCEMENT

Section 6.1     Suits by Warrantholders.

     All or any of the rights conferred on the Holder of any Warrant by the terms of the Warrant Certificate evidencing such Warrant or of this Indenture may be enforced by such Holder by appropriate legal proceedings but without prejudice to the right which is hereby conferred on the Trustee to proceed in its own name or on behalf of the Holders of Warrants to enforce each and every provision herein contained for the benefit of the Warrantholders.

ARTICLE 7
MEETINGS OF WARRANTHOLDERS

Section 7.1     Right to Convene Meetings.

(1)	Convening of Meeting. The Trustee may at any time and from time to time convene a meeting of the Warrantholders, and will do so on receipt of a Written Request of the Corporation or a Warrantholders’ Request and on being funded and indemnified to its reasonable satisfaction by the Corporation or by one or more of the Warrantholders signing such Warrantholders’ Request against the costs which it may incur in connection with calling and holding such meeting.
(2)	Failure to Convene. If the Trustee fails, within 15 Business Days after receipt of such Written Request of the Corporation or Warrantholders’ Request, funding and indemnification, to give notice convening a meeting, the Corporation or any of such Warrantholders, as the case may be, may convene such meeting.
(3)	Place of Meeting. Every such meeting shall be held in Montreal, Quebec, or such other place as is approved or determined by the Trustee and the Corporation.

Section 7.2     Notice.

(1)

Notice. At least ten Business Days’ notice of any meeting must be given to the Warrantholders, to the Trustee (unless the meeting has been called by it) and to the Corporation (unless the meeting has been called by it).

(2)

Contents. The notice of the meeting must state the time when and the place where the meeting is to be held, state briefly the general nature of the business to be transacted thereat and shall contain such information as is reasonably necessary to enable the Warrantholders to make an informed decision on such matter(s), but it shall not be necessary for the notice to set out the terms of any resolution to be proposed or any of the provisions of this Article.

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Section 7.3     Chairperson.

     Some Person (who need not be a Warrantholder) designated in writing by the Trustee shall be chairperson of the meeting or, if no Person is so designated or the Person so designated is not present within 30 minutes after the time fixed for the holding of the meeting, the Warrantholders present in Person or by proxy may choose some Person present to be chairperson.

Section 7.4     Quorum.

(1)	Quorum. Subject to the provisions of Section 7.12, at any meeting of Warrantholders a quorum shall consist of Warrantholders present either in person or by proxy at the commencement of the meeting holding in the aggregate not less than 20% of the total number of Warrants then outstanding.
(2)	No Quorum. If a quorum of Warrantholders is not present within 30 minutes after the time fixed for holding a meeting, the meeting, if summoned by Warrantholders or on a Warrantholders’ Request, shall be dissolved, but, subject to Section 7.12, in any other case shall be adjourned to the fifth following Business Day at the same time and place and three Business Days’ notice of the adjourned meeting shall be given to the Warrantholders.
(3)	Adjourned Meeting. At the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum and may transact any business for which the meeting was originally convened notwithstanding the number of Warrants that they hold.

Section 7.5     Power to Adjourn.

     The chairperson of a meeting at which a quorum of the Warrantholders is present may, with the consent of the meeting, adjourn the meeting, and no notice of such adjournment need be given except as the meeting prescribes.

Section 7.6     Show of Hands.

     Every question submitted to a meeting, other than an Extraordinary Resolution, shall be decided in the first place by a majority of the votes given on a show of hands and, unless a poll is duly demanded as herein provided, a declaration by the chairperson that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact. In the case of an equality of votes on a show of hands, the chairperson shall not have a casting vote.

Section 7.7     Poll.

(1)	Extraordinary Resolution. On every Extraordinary Resolution, and on every other question submitted to a meeting on which a poll is directed by the chairperson or requested by one or more Warrantholders acting in Person or by proxy, a poll shall be taken in such manner as the chairperson directs.
(2)	Other. Questions other than those required to be determined by Extraordinary Resolution shall be decided by a majority of the votes cast on the poll.

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Section 7.8     Voting.

     On a show of hands each Person present and entitled to vote, whether as a Warrantholder or as proxy for one or more absent Warrantholders, or both, shall have one vote, and on a poll each Warrantholder present in person or represented by a proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each Warrant held by such Holder. A proxy need not be a Warrantholder. The chairperson of any meeting shall be entitled to vote in respect of any Warrants and proxies held by him or her.

Section 7.9     Regulations.

(1) Ability to Make. The Trustee, or the Corporation with the approval of the Trustee, may from time to time make or vary such regulations not contrary to the provisions of this Indenture, as it thinks fit:

(a)	for the form of instrument appointing a proxy, the manner in which it must be executed and verification of the authority of a Person who executes it on behalf of a Warrantholder;
(b)	governing the places at which and the times by which voting certificates or instruments appointing proxies must be deposited;
(c)	generally for the calling of meetings of Warrantholders and the conduct of business thereat; and
(d)	for the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxies to be sent by mail, cable, telex or other means of prepaid, transmitted or recorded communication before the meeting to the Corporation or to the Trustee at the place where the meeting is to be held and for voting pursuant to instruments appointing proxies so deposited as though the instruments themselves were produced at the meeting.
Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted.

(2) Recognition. Except as such regulations provide, the only Persons who shall be recognized at a meeting as the Holders of any Warrants, or as entitled to vote or, subject to Section 7.10, to be present at the meeting in respect thereof, shall be the registered Holders of such Warrants or Persons holding proxies on their behalf.

Section 7.10     The Corporation, Warrantholders and Trustee may be Represented.

     The Corporation, Warrantholders and the Trustee by their respective employees, officers or directors, and the counsel of the Corporation, Warrantholders and the Trustee, may attend any meeting of Warrantholders, but shall have no vote as such.

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Section 7.11     Powers Exercisable by Extraordinary Resolution.

     In addition to all other powers conferred on them by the other provisions of this Indenture or by law, the Warrantholders at a meeting shall have the power, exercisable from time to time by Extraordinary Resolution:

(1)	to assent to or sanction any amendment, modification, abrogation, alteration, compromise or arrangement of any right of the Warrantholders or, with the reasonable consent of the Trustee, of the Trustee in its capacity as Trustee hereunder or on behalf of the Warrantholders against the Corporation, whether such right arises under this Indenture or otherwise, which shall be agreed to by the Corporation, and to authorize the Trustee to concur in and execute any indenture supplemental hereto in connection therewith;
(2)	to amend, alter or repeal any Extraordinary Resolution previously passed;
(3)	subject to arrangements as to financing and indemnity satisfactory to the Trustee, to direct or authorize the Trustee to enforce any obligation of the Corporation under this Indenture or to enforce any right of the Warrantholders in any manner specified in the Extraordinary Resolution;
(4)	to direct or authorize the Trustee to refrain from enforcing any obligation or right referred to in Section 7.11(3);
(5)	to waive and direct the Trustee to waive any default by the Corporation in complying with any provision of this Indenture, either unconditionally or on any condition specified in the Extraordinary Resolution;
(6)	to appoint a committee with power and authority to exercise, and to direct the Trustee to exercise, on behalf of the Warrantholders, such of the powers of the Warrantholders as are exercisable by Extraordinary Resolution;
(7)	to restrain any Warrantholder from taking or instituting any suit, action or proceeding against the Corporation for the enforcement of any obligation of the Corporation under this Indenture or to enforce any right of the Warrantholders;
(8)	to direct any Warrantholder who, as such, has brought any suit, action or proceeding, to stay or discontinue or otherwise deal therewith on payment of the costs, charges and expenses reasonably and properly incurred by him in connection therewith;
(9)	to assent to any change in or omission from the provisions contained in the Warrant Certificates and this Indenture or any ancillary or supplemental instrument which may be agreed to by the Corporation, and to authorize the Warrantholders to concur in and execute any ancillary or supplemental indenture embodying the change or omission;
(10)	to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation; and

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(11) from time to time and at any time to remove the Trustee and appoint a successor Trustee.

Section 7.12     Meaning of “Extraordinary Resolution”.

(1)	Meaning. The expression “Extraordinary Resolution” when used in this Indenture means, subject to the provisions of this Section and of Section 7.15 and Section 7.16, a motion proposed at a meeting of Warrantholders duly convened for that purpose and held in accordance with the provisions of this Article at which there are present in person or by proxy Warrantholders holding in the aggregate more than 30% of the total number of Warrants then outstanding and passed by the affirmative votes of Warrantholders who hold in the aggregate not less than 66 2/3% of the total number of Warrants represented at the meeting and voted on the motion.
(2)	Quorum. If, at a meeting called for the purpose of passing an Extraordinary Resolution, the quorum required by Section 7.12(1) is not present within 30 minutes after the time appointed for the meeting, the meeting, if convened by Warrantholders or on a Warrantholders’ Request, shall be dissolved, but in any other case shall stand adjourned to such day, being not less than five Business Days or more than ten Business Days later, and to such place and time, as is appointed by the chairperson.
(3)	Notice. Not less than three Business Days’ notice must be given to the Warrantholders of the time and place of such adjourned meeting.
(4)	Form of Notice. The notice must state that at the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars.
(5)	Quorum at Adjourned Meeting. At the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum and may transact any business for which the meeting was originally convened, and a motion proposed at such adjourned meeting and passed by the requisite vote as provided in Section 7.12(1) shall be an Extraordinary Resolution within the meaning of this Indenture notwithstanding that Warrantholders holding in the aggregate 30% of the total number of Warrants outstanding may not be present.
(6)	Poll. Votes on an Extraordinary Resolution must always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

Section 7.13     Powers Cumulative.

     Any one or more of the powers, and any combination of the powers, in this Indenture stated to be exercisable by the Warrantholders by Extraordinary Resolution or otherwise, may be exercised from time to time, and the exercise of any one or more of such powers or any combination of such powers from time to time shall not prevent the Warrantholders from exercising such power or powers or combination of powers thereafter from time to time.

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Section 7.14     Minutes.

     Minutes of all resolutions passed and proceedings taken at every meeting of the Warrantholders shall be made and duly entered in books from time to time provided for such purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chairperson of the meeting at which such resolutions were passed or such proceedings were taken, shall be prima facie evidence of the matters therein stated, and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes have been so made, entered and signed shall be deemed to have been duly convened and held, and all resolutions passed and proceedings taken thereat to have been duly passed and taken.

Section 7.15     Instruments in Writing.

     Any action that may be taken and any power that may be exercised by Warrantholders at a meeting held as provided in this Article may also be taken and exercised by Warrantholders who hold in the aggregate not less than 50% of the total number of Warrants at the time outstanding or in the case of an Extraordinary Resolution, Warrantholders who hold in the aggregate not less than 66 2/3% of the total number of Warrants at the time outstanding, by their signing, each in person or by attorney duly appointed in writing, an instrument in writing in one or more counterparts, and the expression “Extraordinary Resolution” when used in this Indenture includes a resolution embodied in an instrument so signed.

Section 7.16     Binding Effect of Resolutions.

     Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article at a meeting of Warrantholders shall be binding on all Warrantholders, whether present at or absent from the meeting and whether voting for or against the resolution or abstaining, and every instrument in writing signed by Warrantholders in accordance with Section 7.15 shall be binding on all Warrantholders, whether signatories thereto or not, and every Warrantholder and the Trustee (subject to the provisions for its indemnity herein contained) shall be bound to give effect accordingly to every such resolution and instrument in writing. In the case of an instrument in writing, the Trustee shall give notice of the effect of such instrument in writing to all Warrantholders not signatory thereto and to the Corporation as soon as reasonably practicable.

Section 7.17     Holdings by the Corporation and Subsidiaries Disregarded.

     In determining whether Warrantholders holding the required total number of Warrants are present in person or by proxy for the purpose of constituting a quorum, or have voted or consented to a resolution, Extraordinary Resolution, consent, waiver, Warrantholders’ Request or other action under this Indenture, a Warrant held by the Corporation or by a Subsidiary shall be deemed to be not outstanding. The Corporation shall provide the Trustee with a Certificate of the Corporation providing details of any Warrants held by the Corporation or by a Subsidiary upon the written request of the Trustee.

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ARTICLE 8
SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS

Section 8.1     Provision for Supplemental Indentures for Certain Purposes.

     From time to time the Corporation (when authorized by the directors) and the Trustee may, subject to the provisions hereof, and shall when so directed hereby, execute and deliver by their proper officers indentures or instruments supplemental hereto, which thereafter shall form part hereof, for any or all of the following purposes:

(1)	adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of counsel acceptable to the Trustee, are necessary or advisable, provided that the same are not, in the reasonable opinion of the Trustee, prejudicial to the interests of the Warrantholders;
(2)	giving effect to any Extraordinary Resolution;
(3)	making such provisions not inconsistent with this Indenture as may be necessary or desirable in the opinion of counsel acceptable to the Trustee with respect to matters or questions arising hereunder, provided that such provisions are not, in the reasonable opinion of the Trustee, prejudicial to the interests of the Warrantholders;
(4)	evidencing any succession, or successive successions, to the Corporation and the assumption by any successor of the covenants of the Corporation, herein and in the Warrants contained as provided hereafter in this Article; and
(5)	for any other purpose not inconsistent with the terms of this Indenture, including the correction or rectification of any ambiguities, defective provisions, errors or omissions herein in accordance with advice of counsel acceptable to the Trustee, provided that, in the reasonable opinion of the Trustee, the rights of the Trustee and of the Warrantholders are not prejudiced thereby.

Section 8.2     Successor Corporations.

     Subject to Section 4.9(3), in the event of any Fundamental Transaction, the successor corporation resulting from such Fundamental Transaction (if not the Corporation) shall be bound by the provisions hereof and for the due and punctual performance and observance of each and every covenant and obligation contained in this Indenture to be performed by the Corporation and will execute and deliver to the Trustee a supplemental indenture and such other instruments as are satisfactory in form to the Trustee and in the opinion of counsel are necessary or advisable to evidence the express assumption by the successor corporation of such obligations.

ARTICLE 9
CONCERNING THE TRUSTEE

Section 9.1     Trust Indenture Legislation.

     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of Applicable Legislation, the mandatory requirement shall

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prevail. The Corporation and the Trustee each shall at all times in relation to this Indenture and any action to be taken hereunder observe and comply with and be entitled to the benefits of Applicable Legislation.

Section 9.2     Rights and Duties of Trustee.

(1)	Duty of Trustee. In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good faith with a view to the best interests of the Warrantholders, and shall exercise that degree of care, diligence and skill that a reasonably prudent Trustee would exercise in comparable circumstances. The Trustee shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required so to do under the terms hereof; nor shall the Trustee be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee and in the absence of any such notice the Trustee may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Trustee to determine whether or not the Trustee shall take action with respect to any default.
(2)	No Relief From Liability. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent act, negligent failure to act, wilful misconduct or bad faith.
(3)	Actions. The obligation of the Trustee to commence or continue any act, action or proceeding in connection herewith, including without limitation, for the purpose of enforcing any right of the Trustee or the Warrantholders hereunder is on the conditions that the Trustee shall have received a Warrantholders’ Request specifying the act, action or proceeding which the Trustee is requested to take and, when required by notice to the Warrantholders by the Trustee, the Trustee is furnished by one or more Warrantholders with sufficient funds to commence or continue such act, action or proceeding and an indemnity reasonably satisfactory to the Trustee to protect and hold it harmless against the costs, charges, expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof.
(4)	Funding. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless it is so indemnified.
(5)	Deposit of Warrants. The Trustee may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Warrantholders at whose instance it is acting to deposit with the Trustee the Warrant Certificates held by them, for which certificates the Trustee shall issue receipts.
(6)	Restriction. Every provision of this Indenture that relieves the Trustee of liability or entitles it to rely on any evidence submitted to it is subject to the provisions of Applicable Legislation, of this Section and of Section 9.3.

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Section 9.3     Evidence, Experts and Advisers.

(1)	Evidence. In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Trustee such additional evidence of compliance with any provision hereof, and in such form, as is prescribed by Applicable Legislation or as the Trustee reasonably requires by written notice to the Corporation.
(2)	Reliance by Trustee. In the exercise of any right or duty hereunder the Trustee, if it is acting in good faith, may act and rely, as to the truth of any statement or the accuracy of any opinion expressed therein, on any statutory declaration, opinion, report, certificate or other evidence furnished to the Trustee pursuant to a provision hereof or of Applicable Legislation or pursuant to a request of the Trustee, if such evidence complies with Applicable Legislation and the Trustee examines such evidence and determines that it complies with the applicable requirements of this Indenture.
(3)	Statutory Declaration. Whenever Applicable Legislation requires that evidence referred to in Section 9.3(1) be in the form of a statutory declaration, the Trustee may accept such statutory declaration in lieu of a Certificate of the Corporation required by any provision hereof. Any such statutory declaration may be made by any one or more of the President, Vice-President, Secretary or Assistant Secretary of the Corporation or by any other officer(s) or director(s) of the Corporation to whom such authority is delegated by the directors from time to time. In addition, the Trustee may act and rely and shall be protected in acting and relying upon any resolution, certificate, direction, instruction, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram, cablegram or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties.
(4)	Proof of Execution. Proof of the execution of any document or instrument in writing, including a Warrantholders’ Request, by a Warrantholder may be made by the certificate of a notary public, or other officer with similar powers, that the Person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution, or in any other manner that the Trustee considers adequate.
(5)	Experts. The Trustee may employ or retain such counsel, accountants, engineers, appraisers, or other experts or advisers as it reasonably requires for the purpose of determining and discharging its rights and duties hereunder and may pay the reasonable remuneration and disbursements for all services so performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct or negligence on the part of any of them who has been selected with due care by the Trustee. Any remuneration so paid by the Trustee shall be repaid to the Trustee by the Corporation in accordance with Section 5.1(6). The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant or other expert or advisor, whether retained or employed by the Corporation or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.

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Section 9.4     Documents, Money etc. Held by Trustee.

(1)	Safekeeping. Any security, document of title or other instrument that may at any time be held by the Trustee subject to the trusts hereof may be placed in the deposit vaults of the Trustee or of any Canadian chartered bank or trust company or deposited for safekeeping with any such bank or trust company.
(2)	Holding of Funds. Unless herein otherwise expressly provided, any money held by the Trustee pending the application or withdrawal thereof under any provision of this Indenture may be deposited in trust in an account with the Trustee or in the name of the Trustee in any Canadian chartered bank or trust company at the rate (if any) then current on similar deposits.
(3)	Interest. All interest or other income received by the Trustee in respect of such deposits and investments shall belong to the Corporation.

Section 9.5     Action by Trustee to Protect Interests.

     The Trustee shall have power to institute and to maintain such actions and proceedings as it considers necessary or expedient to protect or enforce its interests and the interests of the Warrantholders.

Section 9.6     Trustee not Required to Give Security.

     The Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture.

Section 9.7     Protection of Trustee.

(1) Protection. By way of supplement to the provisions of any law for the time being relating to Trustees, it is expressly declared and agreed that:

(a)	the Trustee shall not be liable for or by reason of, or required to substantiate, any statement of fact, representation or recital in this Indenture or in the Warrant Certificates (except the representation contained in Section 9.9 or in the certificate of the Trustee on the Warrant Certificates), but all such statements or recitals are and shall be deemed to be made by the Corporation;
(b)	nothing herein contained shall impose on the Trustee any obligation to see to, or to require evidence of, the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;
(c)	the Trustee shall not be bound to give notice to any Person of the execution hereof;
(d)	the Trustee shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach by the Corporation of any obligation or warranty herein contained or of any act of any director, officer, employee or agent of the Corporation;

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(e)	the Trustee, in its personal or any other capacity, may buy, lend upon and deal in securities of the Corporation and in the Warrants and generally may contract and enter into financial transactions with the Corporation or any related corporation without being liable to account for any profit made thereby;
(f)	the Trustee shall incur no liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail, or any other means; and
(g)	the Trustee shall not be responsible for ensuring compliance with any securities laws applicable to the issuance, transfer, exercise or exchange of any Warrants or underlying Class A Shares or Class B Shares. The Trustee shall be entitled to conclusively rely on the Residency Declaration provided to it with respect to the proper entitlement and issuance of underlying Class A Shares or Class B Shares.

(2) Indemnity. In addition to and without limiting any protection of the Trustee hereunder or otherwise by law, the Corporation hereby indemnifies the Trustee and saves it and its officers, directors, employees and agents harmless from all liabilities, suits, damages, costs, expenses and actions which may be brought against or suffered by it arising out of or connected with the performance by it of its duties hereunder except to the extent that such liabilities, suits, damages, costs and actions are attributable to the negligence or wilful misconduct of the Trustee. Notwithstanding any other provision hereof, this indemnity shall survive any removal or resignation of the Trustee, discharge of this Indenture and termination of any trusts hereunder.

Section 9.8     Replacement of Trustee.

(1)	Resignation. The Trustee may resign its trust and be discharged from all further duties and liabilities hereunder, except as provided in this Section, by giving to the Corporation and the Warrantholders not less than 30 days’ notice in writing or, if a new Trustee has been appointed, such shorter notice as the Corporation accepts as sufficient.
(2)	Removal. The Warrantholders by Extraordinary Resolution may at any time remove the Trustee and appoint a new Trustee.
(3)	Appointment of New Trustee. If the Trustee so resigns or is so removed or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable of acting hereunder, the Corporation shall forthwith appoint a new Trustee unless a new Trustee has already been appointed by the Warrantholders.
(4)	Failure to Appoint. Failing such appointment by the Corporation, the retiring Trustee or any Warrantholder may apply at the expense of the Corporation to the Superior Court of Quebec (“Court”), on such notice as such Court directs, for the appointment of a new Trustee.

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(5)	New Trustee. Any new Trustee appointed under this Section must be a corporation authorized to carry on the business of a trust company in Quebec and, if required by the Applicable Legislation of any other province, in such other province. On any such appointment the new Trustee shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Trustee without any further assurance, conveyance, act or deed, but there shall be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as, in the opinion of counsel, are necessary or advisable for the purpose of assuring the transfer of such powers, rights, duties and responsibilities to the new Trustee. Any new Trustee so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Warrantholders and by the Corporation.
(6)	Notice of New Trustee. On the appointment of a new Trustee, the Corporation shall promptly give notice thereof to the Warrantholders in accordance with Section 10.2(1).
(7)	Successor Trustee. A corporation into or with which the Trustee is merged or consolidated or amalgamated, or a corporation succeeding to the trust business of the Trustee, shall be the successor to the Trustee hereunder without any further act on its part or on the part of any party hereto if such corporation would be eligible for appointment as a new Trustee under Section 9.8(5).
(8)	Certificates. A Warrant Certificate certified but not delivered by a predecessor Trustee may be delivered by the new or successor Trustee in the name of the predecessor Trustee or successor Trustee.

Section 9.9     Conflict of Interest.

     The Trustee represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists between its role as a fiduciary hereunder and its role in any other capacity and if a material conflict of interest arises hereafter it shall, within ten days after ascertaining that it has such material conflict of interest, either eliminate the conflict of interest or resign its trust hereunder.

Section 9.10     Trustee’s Authority to Carry on Business.

     The Trustee represents to the Corporation that at the date hereof it is authorized to carry on the business of a trust company in Quebec and each other province and territory of Canada. If, notwithstanding the provisions of this Section 9.10, the Trustee ceases to be authorized to carry on such business, the validity and enforceability of this Indenture and the interest of the Warrantholders in the Warrants registered hereunder shall not be affected in any manner whatsoever by reason only of such event provided that the Trustee, within 30 days after ceasing to be authorized to carry on business, either becomes so authorized or resigns in the manner and with the effects specified in Section 9.8.

Section 9.11     Acceptance of Trust.

     The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform them on the terms and conditions herein set forth.

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Section 9.12     Trust Provisions.

     For greater certainty, notwithstanding any other provisions of this Indenture or any references in this Indenture, or in any Warrant, to the Trustee as a trustee or acting as trustee, no trust within the meaning of Chapter II of Title Six of Book Four of the Civil Code of Quebec is intended to be or is established by this Indenture, except for any trust which may be established for the purposes of, and solely to the extent contemplated by Section 9.4. All references in this Indenture or in any Warrant to the word “trust” or “trustee” or to the expression “in trust” or other similar word or expression shall only refer to any trust which may be established under Section 9.4. Any such trust shall be deemed to be established by the mere transfer or the taking of possession by the Trustee of the property subject to, and for the purposes of, such trust. In addition, the provisions of this Indenture in respect of the administration of the property of others, including, without limitation, in the case of the Trustee, Article 11, shall apply in lieu of the provisions of Title Seven of Book Four of the Civil Code of Quebec.

ARTICLE 10
GENERAL

Section 10.1     Notice to the Corporation and Trustee.

(1) Subject to the terms and provisions of this Indenture, any notice, direction or other communication hereunder shall be in writing and shall be given by delivery or by facsimile transmission (if receipt of such transmission is confirmed):

(a)	if to the Corporation at:
	Microcell Telecommunications Inc.
	800 de La Gauchetière Street West
	Suite 4000
	Montreal, Quebec
	H5A 1K3

Attention:	Vice President, Legal Affairs
Facsimile:	(514) 846-6928

(b)	if to the Trustee at:
	Computershare Trust Company of Canada
	1500 University Street
	Suite 700
	Montreal, Quebec
	H3A 3S8

Attention:	Manager, Corporate Trust
Telecopier:	(514) 982-7677

Any such notice shall be deemed to have been given if delivered by courier during normal business hours of the recipient on a Business Day, on the day following the

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	date of delivery and if sent by facsimile transmission, on the Business Day so sent provided that any delivery made or sent by facsimile after 4:00 p.m. (Montreal time) on a Business Day, shall be deemed to be received on the next following Business Day.
(2)	Change of Address. The Corporation or the Trustee, as the case may be, may from time to time notify the other in the manner provided in Section 10.1(1) of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Corporation or the Trustee, as the case may be, for all purposes of this Indenture.

Section 10.2     Notice to Warrantholders.

(1)

Notice. Unless otherwise expressly provided herein, a notice to be given hereunder to Warrantholders will be deemed to be validly given if the notice is sent by ordinary surface or air mail, postage prepaid, addressed to the Warrantholders or delivered (or so mailed to certain Warrantholders and so delivered to the other Warrantholders) at their respective addresses appearing on any of the registers of Holders described in Section 3.1, provided, however, that if, by reason of a strike, lockout or other work stoppage, actual or threatened, involving Canadian postal employees, the notice could reasonably be considered unlikely to reach or likely to be delayed in reaching its destination, the notice will be valid and effective only if it is so delivered or is given by publication twice in the Report on Business Section in the national edition of The Globe and Mail newspaper or any other newspaper published in Toronto and Montreal.

(2)

Date of Notice. A notice so given by mail or so delivered will be deemed to have been given on the first Business Day after it has been mailed or on the day on which it has been delivered, as the case may be, and a notice so given by publication will be deemed to have been given on the day on which it has been published as required. In determining under any provision hereof the date when notice of a meeting or other event must be given, the date of giving notice will be included and the date of the meeting or other event will be excluded. Accidental error or omission in giving notice or accidental failure to mail notice to any Warrantholder will not invalidate any action or proceeding founded thereon.

Section 10.3     Satisfaction and Discharge of Indenture.

On the earlier of:
(a)	the date by which there has been delivered to the Trustee for exercise, exchange or surrender for cancellation all Warrant Certificates theretofore certified hereunder; or
(b)	the Expiry Date;

and if all certificates representing Shares required to be issued in compliance with the provisions hereof have been issued and delivered hereunder in accordance with such provisions, if all payments required to be made in compliance with the provisions of this Indenture have been made in accordance with such provisions and payment to the Trustee

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of the fees and other remuneration payable to the Trustee, this Indenture shall cease to be of further effect and, on demand of and at the cost and expense of the Corporation and on delivery to the Trustee of a Certificate of the Corporation stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with and on payment to the Trustee of the fees and other remuneration payable to the Trustee, the Trustee shall execute proper instruments acknowledging satisfaction of and discharging this Indenture.

Section 10.4     Sole Benefit of Parties and Warrantholders.

     Nothing in this Indenture or the Warrant Certificates, expressed or implied, shall give or be construed to give to any Person other than the parties hereto and the Warrantholders, as the case may be, any legal or equitable right, remedy or claim under this Indenture or the Warrant Certificates, or under any covenant or provision herein or therein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Warrantholders.

Section 10.5     Discretion of Directors.

     Any matter provided herein to be determined by the directors shall be determined by the directors in their sole discretion, acting in good faith, and a determination so made shall be conclusive.

Section 10.6     Language.

     The parties hereby acknowledge that they have expressly required this Indenture and all notices, statements of account and other documents required or permitted to be given or entered into pursuant hereto to be drawn up in the English language only. Les parties reconnaissent avoir expressément demandées que la présente convention ainsi que tout avis, tout état de compte et tout autre document à être ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.

Section 10.7     Counterparts.

     This Indenture may be executed in any number of counterparts, which taken together shall form one and the same instrument.

[The remainder of this page was intentionally left blank.]

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     IN WITNESS WHEREOF the parties hereto have executed this Indenture as of the day and year first above written.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté
	Vice President, Legal Affairs
COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

SCHEDULE “A”
Form of Residency Declaration

TO: Computershare Trust Company of Canada

1.	In connection with the Warrants of Microcell Telecommunications Inc. issued pursuant to a certain Indenture dated May 1, 2003, the undersigned, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered upon exercise of the Warrants, hereby DECLARES and REPRESENTS that the ultimate beneficial owner of the Shares issued upon exercise will be:
	o   the undersigned, OR
	o  if other than the undersigned,

(Name and Address)

2.	The beneficial owner of the Shares issued upon exercise will be a Canadian (as defined herein):
	o  Yes    o  No
	For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2(1) of the Citizenship Act (Canada) who is ordinarily resident in Canada;
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship;
(c)	a Canadian government, whether federal, provincial or local, or an agency thereof;
(d)	a corporation without share capital, where a majority of its directors or officers, as the case may be, are appointed or designated, either by their personal names or by their names of offices, by one or more of:

(i) a federal or provincial statute or regulations made under a federal or provincial statute;

- 2 -

(ii)	the Governor in Council or the lieutenant governor in Council of a province; or
(iii)	a minister of the Crown in right of Canada or of a province;

(e)	a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3% of the issued and outstanding voting shares of such corporation, and which is not otherwise controlled by non-Canadians;
(f)	a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80% of the board and of each committee of its directors of which are individual Canadians;
(g)	a trust in which Canadians have not less than 66 2/3% of the beneficial interest, and of which a majority of the trustees are Canadians;
(h)	a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate the Pension Fund Society of the Dominion Bank, S.C. 1887, c 55, S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; or
(i)	a partnership in which each of the partners is a Canadian within the meaning of paragraphs (a) to (h) above.

DATED the	day of	20
	(Name)
	(Address)
	(Signature)

SCHEDULE “B”
Form of Warrant Certificate

THE SECURITIES ISSUABLE UPON THE EXERCISE OF THE WARRANTS EVIDENCED BY THE PRESENT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“U.S. SECURITIES ACT”). WARRANTS EVIDENCED BY THIS WARRANT CERTIFICATE MAY NOT BE EXERCISED UNTIL THE FIFTH BUSINESS DAY FOLLOWING THE DATE A REGISTRATION STATEMENT IN RESPECT OF THE SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS FILED PURSUANT TO THE U.S. SECURITIES ACT IS DECLARED EFFECTIVE BY THE U.S. SECURITIES AND EXCHANGE COMMISSION.

WARRANT CERTIFICATE

MICROCELL TELECOMMUNICATIONS INC.
(incorporated under the laws of Canada)

CERTIFICATE NUMBER 2005 WARRANTS
(each Warrant entitling the Holder thereof
to acquire, subject to adjustment, one
Class A Restricted Voting Share or one
Class B Non-Voting Share)

THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE EXERCISED BY ANY PERSON OTHER THAN THE REGISTERED HOLDER HEREOF.

THE WARRANTS REPRESENTED HEREBY WILL BE VOID AFTER THE EXPIRY TIME PURSUANT TO THE TERMS OF THE WARRANT INDENTURE (AS DESCRIBED BELOW). DO NOT DESTROY THIS CERTIFICATE.

          THIS IS TO CERTIFY that, for value received,

          [Insert name and address of Holder here]

(herein called the “Warrantholder” or “Holder”) is the registered holder of the number of warrants (the “Warrants”) specified above of Microcell Telecommunications Inc. (the “Corporation”), each Warrant entitling the Holder to subscribe for one fully paid Class A Restricted Voting Share or one fully paid Class B Non-Voting Share, as the case may be (in each case, a “Share”) of the Corporation, upon payment of an exercise price of Cdn.$19.91 per Warrant and completion of other formalities set forth herein for the exercise of Warrants, at any time after the U.S. Registration Date (as defined in the Indenture (as

- 2 -

defined below)) but on or before the Expiry Time (as defined in the Indenture) and on the basis, subject to adjustment, of one Share for each Warrant.

          The Warrants represented by this certificate are issued under and pursuant to a certain warrant indenture (herein called the “Warrant Indenture” or “Indenture”) made as of May 1, 2003 between the Corporation and Computershare Trust Company of Canada, as Trustee (“Trustee”), to which Indenture and any instruments supplemental or ancillary thereto or in amendment thereof reference is hereby made for a full description of the rights of the Holders of the Warrants and the terms and conditions upon which such Warrants are, or are to be, issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental or ancillary thereto or in amendment thereof were herein set forth, to all of which provisions the Holder of these Warrants by acceptance hereof assents.

          Unless otherwise defined herein, all terms defined in the Indenture are used herein as so defined. In the event of any conflict or inconsistency between the provisions of the Indenture and the provisions of this Warrant Certificate, the provisions of the Indenture shall prevail. The Trustee will furnish to the Holder of this Warrant Certificate, upon request and upon payment of reasonable photocopying and delivery charges, a copy of the Indenture.

          Exercise Period

          The Warrants represented by this Warrant Certificate may be exercised by the Holder (including, if applicable, any agent under any power of attorney granted by such Holder) at any time after the U.S. Registration Date but on or before the Expiry Time.

          Effect of Exercise of Warrants

          A Warrantholder may, at any time after the U.S. Registration Date but on or before the Expiry Time, exercise all or any number of the then outstanding Warrants held by it, by surrendering this Warrant Certificate to the Trustee at its principal corporate actions trust office in Toronto, or to any other person or at any other place designated by the Corporation with the approval of the Trustee, during normal business hours on a Business Day at such place, with a duly completed and executed notice of exercise in the form set forth herein accompanied by duly executed Residency Declaration(s) for the person or persons to whom Shares shall be issued and payment of the Exercise Price in respect of the Warrants so exercised. A Warrantholder which fails to provide a duly completed and executed Residency Declaration shall be deemed non-Canadian. Upon exercise, Canadian Warrantholders shall be entitled to be issued Class A Shares and non-Canadian Warrantholders shall be entitled to be issued Class B Shares.

          Surrender of this Warrant Certificate will be deemed to have been effected only on personal delivery thereof to, or, if sent by mail or other means of transmission, on actual receipt thereof by, the Trustee at its principal corporate actions trust office in Toronto, or to such other person or at such other place as provided in the Indenture.

          Any notice of exercise in the form set forth herein must be signed by the Warrantholder, or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner

- 3 -

satisfactory to the Trustee, acting reasonably, and, if any Shares thereby issuable are to be issued to a person or persons other than the Warrantholder, must specify the name or names and the address or addresses of each such person or persons and the number of Shares to be issued to each such person if more than one is so specified and be accompanied by the Residency Declaration(s) of such person(s).

          The Holder may in certain circumstances exercise less than all of the Warrants evidenced by this Warrant Certificate.

          Upon the exercise of any Warrants, the Shares thereby issuable shall be deemed to have been issued, and the person or persons to whom such Shares are to be issued shall be deemed to have become the Holder or Holders of record thereof, on the day on which this Warrant Certificate is surrendered in accordance with the terms of the Indenture (the “Exercise Date”), unless the transfer registers for the Shares are closed on that date, in which case such Shares shall be deemed to have been issued and such person or persons shall be deemed to have become the Holder or Holders of record thereof on the date on which such transfer registers are reopened, but such Shares shall be issued on the basis of the number of Shares to which such person or persons were entitled on the Exercise Date.

          As soon as reasonably practicable (and, in any event, within five (5) Business Days) after the surrender to the Trustee of the Warrant Certificates in accordance with the provisions of the Indenture, the Corporation shall, subject to certain exceptions set forth in the Indenture, cause the Trustee to mail to the person or persons in whose name or names the Shares thereby issued have been issued, at his or their respective addresses, or, if so specified, cause to be delivered to such person or persons at the place where the Warrant Certificates evidencing such Warrants were surrendered, certificates representing the Shares so issued.

          If any Shares issuable pursuant to any Warrants are to be issued to a person or persons other than the Warrantholder, the Warrantholder must pay to the Corporation or to the Trustee on its behalf an amount equal to all eligible transfer taxes or other government charges, and neither the Corporation nor the Trustee will be required to issue or deliver any certificates representing any such Shares unless or until such amount has been so paid or the Warrantholder has established to the satisfaction of the Corporation that such taxes and charges have been paid or that no such taxes or charges are owing.

          If at the time of exercise of the Warrants there remain trading restrictions on the Shares pursuant to applicable securities legislation, the Corporation or the Trustee may, upon the advice of counsel, endorse any Shares to such effect.

Warrants Void After Expiry Time

          After the Expiry Time, no Holder of a Warrant Certificate representing a Warrant which has not been validly exercised shall have any rights either under the Indenture or a Warrant, and the Warrants shall thereafter be void and of no value or effect.

- 4 -

Other Provisions

          The Corporation will not be obligated to issue any fraction of Shares on the exercise of any Warrant. To the extent that any Warrant evidenced hereby confers the right to be issued a fraction of Shares, such Shares shall be rounded down to the nearest whole number without any compensation therefor.

          The Indenture provides for adjustments to the rights of the Holders of Warrants, including the number of Shares issuable upon the exercise thereof, on the happening of certain stated events, including the subdivision or consolidation of the outstanding Shares, certain distributions of Shares, or of securities convertible into or exchangeable for Shares or of other securities or assets of the Corporation, certain offerings of rights, warrants or options and certain capital reorganizations.

          The Indenture contains provisions making binding on all Holders of Warrants outstanding thereunder resolutions passed at meetings of such Holders held in accordance with such provisions and instruments in writing signed by Holders of a specified majority of all outstanding Warrants.

          On presentation at the principal corporate actions trust office of the Trustee in Toronto, subject to the provisions of the Indenture and on compliance with the reasonable requirements of the Trustee, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates of different denominations evidencing in the aggregate the same number of Warrants as the Warrant Certificate or Warrant Certificates being exchanged.

          The Warrants evidenced by this Warrant Certificate may only be transferred upon compliance with the conditions prescribed in the Indenture, on the register of transfers to be kept at the principal corporate actions trust office of the Trustee in Toronto, by the Holder or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee and, upon compliance with such requirements and such other reasonable requirements as the Trustee and the Corporation may prescribe, such transfer will be recorded on such register of transfers by the Trustee. Notwithstanding the foregoing, the Corporation will be entitled, and may direct the Trustee, to refuse to record any transfer of any Warrant on such register if such transfer would constitute a violation of the securities laws of any jurisdiction.

          The holding of this Warrant Certificate will not constitute the Holder a shareholder of the Corporation or entitle such Holder to any right or interest in respect thereof except as otherwise provided in the Indenture.

          This Warrant Certificate will not be valid for any purpose until it has been certified by or on behalf of the Trustee for the time being under the Indenture.

          Time is of the essence hereof.

          This Warrant Certificate will be construed in accordance with the laws of the Province of Quebec and of Canada applicable therein.

- 5 -

          The parties hereby acknowledge that they have expressly required this Warrant Certificate and all notices and other documents required or permitted to be given or entered into pursuant hereto to be drawn up in the English language only. Les parties reconnaissent avoir expressément demandé que le présent certificat ainsi que tout avis et autre document à être ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.

          To exercise your rights hereunder, please complete and execute the notice of exercise attached hereto as Exhibit “1” and deliver this Warrant Certificate to the Trustee accompanied by duly executed Residency Declaration(s) for the person or persons to whom Shares shall be issued and payment of the Exercise Price in respect of the Warrants so exercised.

- 6 -

          IN WITNESS WHEREOF THE CORPORATION has caused this Warrant Certificate to be signed by its officer or other individual authorized in that behalf as of May 1, 2003.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté Vice President, Legal Affairs
COMPUTERSHARE TRUST COMPANY OF CANADA
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

          This Warrant Certificate is one of the Warrant Certificates referred to in the Indenture.

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer

Exhibit “1”

TO:	MICROCELL TELECOMMUNICATIONS INC. (the “Corporation”)
AND TO:	COMPUTERSHARE TRUST COMPANY OF CANADA (the “Trustee”)

NOTICE OF EXERCISE

          The undersigned Holder of the Warrants evidenced by this Warrant Certificate hereby exercises the right of such Holder to be issued, and hereby subscribes for, the Shares that are issuable pursuant to the exercise of such Warrants on the terms specified in such Warrant Certificate and in the Indenture.

          The undersigned hereby acknowledges that the undersigned is aware that the Shares received on exercise may be subject to restrictions on resale under applicable securities legislation.

          The undersigned hereby irrevocably directs that the said Shares be issued, registered and delivered as follows:

Name(s) in Full and Social
Insurance Number(s)
(if applicable)




Address(es)




Number of Shares

Taxpayer Identification Number, if applicable:

          Please print full name in which certificates representing the Shares are to be issued. If any Shares are to be issued to a person or persons other than the Holder, the Holder must pay to the Trustee all exigible transfer taxes or other government charges. The signature of the Holder must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

          IF NOT EXERCISED ON OR PRIOR TO 5:00 P.M. (MONTREAL TIME) ON THE EXPIRY DATE (AS DEFINED IN THE WARRANT INDENTURE), THE WARRANTS EVIDENCED BY THIS CERTIFICATE WILL BE CANCELLED AND BECOME ABSOLUTELY VOID.

- 2 -

          It is understood that the Corporation may require evidence to verify the foregoing representation.

DATED this day of                      , 200      .

	)
	)
	)
	)	Signature of Registered Holder
	)
	)
	)
	)
Witness	)	Name of Registered Holder

[  ] Please check if the certificates representing the Shares are to be delivered at the office where this Warrant Certificate is surrendered, failing which such certificates will be mailed to the address set out above. Certificates will be delivered or mailed as soon as practicable after the surrender of this Warrant Certificate to the Trustee.

FORM OF TRANSFER

          FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to

(insert name and address of transferee) the Warrants represented by this Warrant Certificate and hereby appoints                                    as its attorney with full power of substitution to transfer the Warrants on the appropriate register of the Trustee.

DATED this            day of                             , 20       

	)
	)
	)
	)	Signature of Transferor
	)
	)
	)
	)
Witness	)	Name of Transferor

The signature of the Transferor must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Except as pursuant to alternative arrangements satisfactory to the Trustee and Microcell Telecommunications Inc., the signature of Transferor must be guaranteed by a Canadian chartered bank or a trust company or by a member firm of The Toronto Stock Exchange, any of whose signatures must be on file with the Trustee.

EX-2.4 8 m10142orexv2w4.htm EX-2.4

Exhibit 2.4

MICROCELL TELECOMMUNICATIONS INC.

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Trustee

WARRANT INDENTURE

PROVIDING FOR THE ISSUE OF 2008 Warrants

Dated May 1, 2003

STIKEMAN ELLIOTT LLP

WARRANT INDENTURE - 2008 Warrants

     THIS INDENTURE made this 1^st day of May, 2003 among MICROCELL TELECOMMUNICATIONS INC., a corporation incorporated under the Canada Business Corporations Act (the “Corporation”) and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (the “Trustee”).

     WHEREAS 2861399 Canada Inc. (formerly Microcell Telecommunications Inc.) received the sanction of the Superior Court of the Province of Quebec on March 18, 2003 in respect of a plan of reorganization and of compromise and arrangement filed under the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act in respect of such corporation and certain of its subsidiaries (“Plan”);

     WHEREAS the Plan provides for an issuance by the Corporation of the Warrants (as hereinafter defined) on the date of implementation of the Plan;

     WHEREAS the Corporation has proposed to create and issue Warrants in the manner herein set forth;

     WHEREAS each Warrant entitles the Holder (as hereinafter defined) thereof to purchase from the Corporation one Class A Share (as hereinafter defined) or one Class B Share (as hereinafter defined), as the case may be, subject to adjustment in the manner herein set forth;

     WHEREAS for such purpose the Corporation deems it necessary to create and issue the Warrants constituted and issued in the manner herein;

     WHEREAS the Corporation is duly authorized to create and issue the Warrants as herein provided and complete the transactions contemplated herein;

     WHEREAS all things necessary have been done and performed to make the Warrant Certificates (as hereinafter defined), when certified by the Trustee and issued and delivered as herein provided, legal, valid and binding obligations of the Corporation with the benefits of and subject to the terms of this Indenture;

     WHEREAS the foregoing recitals are made as representations by the Corporation and not by the Trustee;

     WHEREAS the Trustee has agreed to enter into this Indenture and to hold all rights, interests and benefits contained herein for and on behalf of those Persons (as hereinafter defined) who from time to time become Holders of Warrants issued pursuant to this Indenture;

     NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given, the receipt and sufficiency of which, by each of the Corporation and the Trustee, are hereby acknowledged, the Corporation hereby appoints the Trustee as trustee for the Warrantholders, to hold all rights, interests and benefits contained herein for and on behalf of those Persons who from time to time become Holders

- 2 -

of Warrants issued pursuant to this Indenture, and the parties hereby covenant, agree and declare as follows:

ARTICLE 1

INTERPRETATION

Section 1.1 Definitions.

         In this Indenture and in the Warrant Certificates, the following terms shall have the following meaning unless otherwise indicated:

“Adjustment Period” has the meaning set forth in Section 4.9(1);

“Applicable Legislation” means such provisions of any statute of Canada or of a province thereof, and of regulations under any such statute, relating to trust indentures or to the rights, duties and obligations of corporations and of trustees under trust indentures, as are from time to time in force and applicable to this Indenture;

“Business Day” means a day on which chartered banks are normally open for business in the City of Montreal and the City of Toronto, excluding Saturdays, Sundays and any statutory or civic holiday;

“Canadian” means a Canadian within the meaning ascribed to such term in the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time;

“Canadian Securities Regulatory Authorities” means the securities commissions and similar securities regulatory authorities of all Canadian provinces and territories;

“Class A Shares” means the Class A Restricted Voting Shares in the capital of the Corporation;

“Class B Shares” means the Class B Non-Voting Shares in the capital of the Corporation;

“Corporation” means Microcell Telecommunications Inc., a corporation incorporated under the laws of Canada and includes any successor corporation to or of the Corporation which shall have complied with the provisions of Section 8.2;

“Corporation’s Auditors” means the auditors of the Corporation appointed from time to time in accordance with the provisions of the Canada Business Corporations Act;

“Court” has the meaning set forth in Section 9.8(4);

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“Current Market Price” means the closing trading prices per share of Class A Shares and Class B Shares, respectively, on any particular date (and if such date is not a Business Day, the last Business Day before such date);

“Director” means a director of the Corporation and reference to action by the directors means action by the directors of the Corporation as a board or, whenever duly empowered, action by a committee of the board;

“Effective Date” means May 1, 2003;

“Exercise Date” means with respect to any Warrant exercised by the Holder thereof pursuant to Section 4.1(1), any day after the U.S. Registration Date, on which the Warrant Certificate evidencing such Warrant is surrendered to the Trustee in accordance with the provisions of Section 4.1;

“Exercise Price” means an amount of $20.69, subject to adjustment as herein provided;

“Expiry Date” means, with respect to a Warrant, May 1, 2008, subject to Section 4.10;

“Expiry Time” means 5:00 p.m. (Montreal time) on the Expiry Date;

“Extraordinary Resolution” has the meaning attributed thereto in Section 7.12 and Section 7.15;

“Fundamental Transaction” has the meaning set forth in Section 4.9(3)(a);

“Indenture” means the present Warrant Indenture, as amended from time to time in accordance with its terms;

“Ordinary Course Dividend” means any dividend (payable in cash or securities, property or assets of equivalent value) declared payable on the Shares in any fiscal year of the Corporation and not exceeding, on an aggregate basis, the greater of (i) 10% of the equity of the holders of the Shares at the end of the fiscal year preceding the dividend declaration date and (ii) 150% of the average amount of dividends paid on the Shares in the preceding three (3) fiscal years.

“Person” means an individual, corporation, partnership, trustee or unincorporated organization;

“Registration Statement” means a registration statement filed by the Corporation with the SEC in respect of the Shares issuable upon exercise of the Warrants pursuant to the U.S. Securities Act;

“Residency Declaration” means a declaration by a Warrantholder whether he is Canadian or non-Canadian, in the form annexed as Schedule “A”;

“Share” means a Class A Share or Class B Share, as the case may be;

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“Share Rate” has the meaning set forth in Section 4.9(1);

“SEC” means the U.S. Securities and Exchange Commission;

“Subsidiary” means any corporation or entity of which voting securities or interests carrying more than 50% of the votes attached to all outstanding voting securities or interests of such corporation or entity are owned, directly or indirectly, other than by way of security only, by one or more of the Corporation and any Subsidiary, provided that the Corporation or such Subsidiary is not contractually or otherwise prohibited or restricted from exercising sufficient of the voting rights attached to such voting securities or interests to elect at least a majority of the directors of such corporation;

“Trustee” means Computershare Trust Company of Canada, and its successors;

“U.S.” means the United States of America, its territories or possessions, any state thereof or the District of Columbia collectively;

“U.S. Person” has the meaning ascribed thereto in Regulation S adopted pursuant to the U.S. Securities Act;

“U.S. Registration Date” means the fifth Business Day following the date upon which the Registration Statement has been declared effective by the SEC;

“U.S. Securities Act” means the U.S. Securities Act of 1933, as amended;

“Warrant Certificate” means a certificate evidencing one or more Warrants, substantially in the form attached hereto as Schedule “B”;

“Warrantholders” or “Holders” means the Persons for the time being entered in a register of holders described in Section 3.1 as holders of Warrants;

“Warrantholders’ Request” means an instrument, signed in one or more counterparts by Warrantholders who hold in the aggregate not less than 20% of the total number of Warrants then outstanding, requesting the Trustee to take some action or proceeding specified therein;

“Warrants” means, collectively, the warrants of the Corporation created and issued pursuant to this Indenture entitling registered Holders thereof to receive one Class A Share or one Class B Share, as the case may be (subject to adjustment), upon the exercise of such Warrant pursuant to Article 4;

“Written Order of the Corporation”, “Written Request of the Corporation”, “Written Consent of the Corporation”, “Written Direction of the Corporation” and “Certificate of the Corporation” mean, respectively, a written order, request, consent, direction and certificate signed in the name of the Corporation by any director or officer of the Corporation or by any other individual to whom such signing authority is delegated by the directors from time to time, and may consist of one or more instruments so executed.

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Section 1.2     Words Importing the Singular.

     Words importing the singular include the plural and vice versa and words importing a particular gender include both genders.

Section 1.3     Interpretation Not Affected by Headings, Etc.

     The division of this Indenture into Articles, Sections, Subsections, paragraphs, subparagraphs, clauses and subclauses, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture or the Warrants.

Section 1.4     Day Not a Business Day.

     If the day on or before which any action that would otherwise be required to be taken hereunder is not a Business Day in the place where the action is required to be taken, that action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day.

Section 1.5     Time of the Essence.

     Time shall be of the essence in all respects in this Indenture and the Warrant Certificates.

Section 1.6     Currency.

     Except as otherwise stated, all dollar amounts herein and in the Warrant Certificates are expressed in Canadian dollars.

Section 1.7     Applicable Law.

     This Indenture and the Warrant Certificates shall be construed and enforced in accordance with the laws of the Province of Quebec and the federal laws of Canada applicable therein and shall be treated in all respects as Quebec contracts.

Section 1.8     Severability.

     In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect such determination shall not affect such provision in any other respect or any other provision hereof, all of which shall remain in full force and effect.

Section 1.9     Conflicts.

     In the event there is any conflict between this Indenture and any Warrant Certificates or Schedules to this Indenture, the provisions of this Indenture shall govern and prevail.

Section 1.10     Meaning of “Outstanding”.

     Subject to Section 7.17, every Warrant represented by a Warrant Certificate countersigned and delivered by the Trustee hereunder shall be deemed to be outstanding until it shall be cancelled or delivered to the Trustee for cancellation or until the Expiry Time; provided that where a new Warrant Certificate has been issued pursuant to Section 2.7 to replace one which has been mutilated, lost, stolen or destroyed, the Warrants

- 6 -

represented by only one of such Warrant Certificates shall be counted for the purpose of determining the aggregate number of Warrants outstanding.

Section 1.11     Schedules.

The following Schedules, attached hereto, form part of this Indenture:

Schedule A	- -	Form of Residency Declaration
Schedule B	- -	Form of Warrant Certificate

ARTICLE 2

THE WARRANTS

Section 2.1      Creation and Issue of Warrants.

(1)	Creation of Warrants. A maximum of 6,646,562 Warrants entitling the Holders thereof to be issued, subject to adjustment in accordance with Section 4.9, a maximum aggregate number of 6,646,562 Class A Shares and/or Class B Shares on the terms and subject to the conditions herein provided, are hereby created and authorized for issue.
(2)	Issuance of Warrants. The Corporation will issue the Warrants to Warrantholders as of the Effective Date.
(3)	Certification of Warrants. As of the Effective Date, upon the issue of the Warrants, Warrant Certificates shall be executed by the Corporation and delivered to the Trustee, certified by the Trustee upon the Written Order of the Corporation and delivered by the Trustee pursuant to a Written Direction of the Corporation, without any further act of or formality on the part of the Corporation and without the Trustee receiving any consideration therefor.

Section 2.2      Terms of Warrants.

(1)	Exercise Terms. At any time commencing after the U.S. Registration Date and terminating at the Expiry Time, each Warrant issued hereunder shall entitle the Holder thereof, upon the exercise thereof and the payment of the Exercise Price in accordance with the provisions of Article 4, to be issued one Class A Share or one Class B Share, as the case may be, subject to adjustment as provided herein.
(2)	Adjustment. The number of Shares which may be issued upon exercise of the Warrants will be adjusted in the events and in the manner specified in Section 4.9 hereof.
(3)	Purchase by Corporation. The Corporation or any Subsidiary may, from time to time, purchase Warrants in the open market, by private agreement or otherwise, and any such purchase may be made in such manner, from such Persons, at such prices and on such terms as the Corporation or such Subsidiary in its sole discretion may determine. The Corporation shall instruct the Trustee, by a Written Direction of the Corporation, to cancel the Warrants so purchased.

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Section 2.3      Form of Warrant Certificates.

(1)	Form. The Warrant Certificates will be in the form attached hereto as Schedule “B”, will be dated as of the Effective Date, will bear such distinguishing letters and numbers as the Corporation, with the approval of the Trustee, may prescribe and such legends as the Corporation may prescribe and will be issuable in whole number denomination only.
(2)	Production. The Warrant Certificates may be engraved, lithographed or printed (the expression “printed” including for purposes hereof both original typewritten material as well as mimeographed, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Corporation may determine.
(3)	Warrant Certificates Legends. Upon the original issuance of Warrant Certificates and until the U.S. Registration Date, the Warrant Certificates, shall bear the following legend:

“THE SECURITIES ISSUABLE UPON THE EXERCISE OF THE WARRANTS EVIDENCED BY THE PRESENT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“U.S. SECURITIES ACT”). WARRANTS EVIDENCED BY THIS WARRANT CERTIFICATE MAY NOT BE EXERCISED UNTIL THE FIFTH BUSINESS DAY FOLLOWING THE DATE A REGISTRATION STATEMENT IN RESPECT OF THE SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS FILED PURSUANT TO THE U.S. SECURITIES ACT IS DECLARED EFFECTIVE BY THE U.S. SECURITIES AND EXCHANGE COMMISSION.”

Section 2.4      Signing of Warrant Certificates.

(1)	Signing Officers. The Warrant Certificates will be signed by one of the President, Chief Financial Officer, a Vice-President or Secretary of the Corporation or by any other individual to whom such signing authority is delegated by the directors of the Corporation from time to time.
(2)	Signatures. The signatures of any of the officers or individuals referred to in Section 2.4(1) may be manual signatures, engraved, lithographed or printed in facsimile and Warrant Certificates bearing such facsimile signatures will, subject to Section 2.5, be binding on the Corporation as if they had been manually signed by such officers or individuals.
(3)	No Longer Officer. Notwithstanding that any Person whose manual or facsimile signature appears on a Warrant Certificate as one of the officers or individuals referred to in Section 2.4(1) no longer holds the same or any other office with the Corporation at the date of issue of any Warrant Certificate or at the date of certification or delivery thereof, such Warrant Certificate will, subject to Section 2.5, be valid and binding on the Corporation.

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Section 2.5     Certification by Trustee.

(1)

Certification. No Warrant Certificate will be issued or, if issued, will be valid or entitle the Holder to the benefits hereof until it has been certified by signature (which may be manual, engraved, lithographed or printed in facsimile) by or on behalf of the Trustee in the form of Warrant Certificate attached hereto as Schedule “B”. The certification by the Trustee on a Warrant Certificate will be conclusive evidence as against the Corporation that such Warrant Certificate has been issued hereunder and that the Holder thereof is entitled to the benefits hereof.

(2)

Certification No Representation. The certification by the Trustee on any Warrant Certificate issued hereunder will not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or such Warrant Certificate (except the due certification thereof) or as to the performance by the Corporation of its obligations under this Indenture and the Trustee will in no respect be liable or answerable for the use made of any Warrant Certificate or of the consideration therefor, except as otherwise specified herein.

Section 2.6     Warrants to Rank Pari Passu.

(1) All Warrants will rank pari passu, irrespective of the actual dates of issue of the Warrant Certificates by which they are evidenced.

Section 2.7     Issue in Substitution for Lost Certificates, Etc.

(1)

Substitution. If any Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to Section 2.7(2), will issue, and thereupon the Trustee will certify and deliver, a new Warrant Certificate of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and on surrender and cancellation of such mutilated certificate or in lieu of and in substitution for such lost, destroyed or stolen certificate.

(2)

Cost and Conditions of Substitution. The applicant for the issue of a new Warrant Certificate pursuant to this Section 2.7 will bear the reasonable cost of the issue thereof and in the case of loss, destruction or theft will, as a condition precedent to the issue thereof:

(a)	furnish to the Corporation and to the Trustee such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate to be replaced as is satisfactory to the Corporation and to the Trustee in their discretion, acting reasonably;
(b)	if so requested, furnish an indemnity in amount and form satisfactory to the Corporation and to the Trustee in their discretion, acting reasonably; and
(c)	pay the reasonable charges of the Corporation and the Trustee in connection therewith.

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Section 2.8     Cancellation of Surrendered Warrants.

     All Warrant Certificates surrendered to the Trustee in accordance with the provisions of this Indenture will be cancelled by the Trustee and, if requested in writing in advance by the Corporation, the Trustee will furnish the Corporation with a cancellation certificate identifying each Warrant Certificate so cancelled and the number of Warrants evidenced thereby.

Section 2.9     Warrantholder not a Shareholder.

     Nothing in this Indenture or in the holding of a Warrant evidenced by a Warrant Certificate, or otherwise, will be construed as conferring on any Warrantholder any right or interest whatsoever in the Shares to be issued as a shareholder of the Corporation, including but not limited to any right to vote at, to receive notice of, or to attend any meeting of shareholders or any other proceeding of the Corporation or any right to receive any dividend or other distribution in respect of the Shares.

ARTICLE 3
REGISTRATION, TRANSFER, EXCHANGE AND
OWNERSHIP OF WARRANTS

Section 3.1     Registration and Transfer of Warrants.

(1) Register. The Corporation will cause to be kept by the Trustee, at the principal corporate actions trust office in Toronto of the Trustee and in such additional place or places as the Corporation, with the approval of the Trustee, may determine:

(a)	a register of Holders in which shall be entered in alphabetical order the names and addresses of the Holders of Warrants and particulars of the Warrants held by them; and
(b)	a register of transfers in which all transfers of Warrants and the date and other particulars of each such transfer shall be entered.

(2)

Transfer. No transfer of any Warrant will be valid unless entered on the register of transfers referred to in Section 3.1(1), or on any branch registers maintained pursuant to Section 3.1(7), upon surrender to the Trustee of the Warrant Certificate evidencing such Warrant, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee executed by the Holder or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee, and, upon compliance with such requirements and such other reasonable requirements as the Trustee and the Corporation may prescribe, such transfer will be duly noted on one of such registers of transfers by the Trustee.

(3)

Register of Transfers. The transferee of any Warrant will, after surrender to the Trustee of the Warrant Certificate evidencing such Warrant as required by Section 3.1(2) and upon compliance with all other conditions in respect thereof required by this Indenture or by law, be entitled to be entered on the register of Holders referred to in Section 3.1(1), or on any branch registers of Holders

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	maintained pursuant to Section 3.1(7), as the owner of such Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the transferor or any previous Holder of such Warrant, except in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.
(4)	Refusal of Registration. The Corporation will be entitled, and may direct the Trustee, to refuse to recognize any transfer, or enter the name of any transferee, of any Warrant on the registers referred to in Section 3.1(1), or on any branch registers maintained pursuant to Section 3.1(7), if such transfer would constitute a violation of the securities laws of any jurisdiction or the rules, regulations or policies of any regulatory authority having jurisdiction.
(5)	No Notice of Trusts. Subject to applicable law, neither the Corporation nor the Trustee will be bound to take notice of or see to the execution of any trust, whether express, implied or constructive, in respect of any Warrant, and may transfer any Warrant on the direction of the Person registered as the Holder thereof, whether named as trustee or otherwise, as though that Person were the beneficial owner thereof.
(6)	Inspection. The registers referred to in Section 3.1(1), and any branch registers maintained pursuant to Section 3.1(7), will at all reasonable times be open for inspection by the Corporation and any Warrantholder. The Trustee will from time to time when requested to do so in writing by the Corporation or any Warrantholder (upon payment of the Trustee’s reasonable charges), furnish the Corporation or such Warrantholder, as the case may be, with a list of the names and addresses of Holders of Warrants entered on such registers and showing the number of Warrants held by each such Holder.
(7)	Location of Registers. The Corporation may, at any time and from time to time, change the place at which the registers referred to in Section 3.1(1) are kept, cause branch registers of Holders or transfers to be kept at other places (including in the U.S.) and close such branch registers or change the place at which such branch registers are kept, in each case subject to the approval of the Trustee if same relates to registers kept by the Trustee. Notice of all such changes or closures shall be given by the Corporation to the Trustee and to Holders of Warrants in accordance with Section 10.2.

Section 3.2     Exchange of Warrant Certificates.

(1)	Exchange. One or more Warrant Certificates may, on compliance with the reasonable requirements of the Trustee, be exchanged for one or more Warrant Certificates of different denominations evidencing in the aggregate the same number of Warrants entitling the Holder thereof to be issued the same aggregate number of Shares as the Warrant Certificate or Warrant Certificates being exchanged.
(2)	Place of Exchange. Warrant Certificates may be exchanged only at the principal corporate actions trust office in Toronto of the Trustee or at any other place designated by the Corporation with the approval of the Trustee.

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(3)	Cancellation. Any Warrant Certificate tendered for exchange pursuant to Section 3.2 shall be surrendered to the Trustee and cancelled.
(4)	Execution. The Corporation will sign all Warrant Certificates necessary to carry out exchanges pursuant to Section 3.2 and such Warrant Certificates will be certified by the Trustee.

Section 3.3      No Charges for Transfer or Exchange.

          No charge will be levied on a presenter of a Warrant Certificate pursuant to this Indenture for the transfer of any Warrant or the exchange of any Warrant Certificate.

Section 3.4      Ownership of Warrants.

(1)

Owner. The Corporation and the Trustee may deem and treat the Person or Persons in whose name any Warrant is registered as the absolute owner (or joint-owners, as the case may be) of such Warrant for all purposes, and such Person or Persons will for all purposes of this Indenture be and be deemed to be the absolute owner thereof, and the Corporation and the Trustee will not be affected by any notice or knowledge to the contrary except as required by statute or by order of a court of competent jurisdiction.

(2)

Rights of Registered Holder. The registered Holder of any Warrant will be entitled to the rights evidenced thereby free from all equities and rights of set-off or counterclaim between the Corporation and the original or any intermediate Holder thereof and all Persons may act accordingly, and the issue and delivery to any such registered Holder of the Shares issuable pursuant thereto will be a good discharge to the Corporation and the Trustee therefor and neither the Corporation nor the Trustee will be bound to inquire into the title of any such registered Holder.

ARTICLE 4
EXERCISE OF WARRANTS

Section 4.1      Exercise.

(1) Exercise. Subject to the limitations set forth in Section 4.1(6) and Section 4.8, the Holder of any Warrant may, at any time after the U.S. Registration Date but on or before the Expiry Time, exercise the right thereby conferred to be issued Class A Shares or Class B Shares, as the case may be, by surrendering to the Trustee, at the principal corporate actions trust office in Toronto of the Trustee, or to any other Person or at any other place designated by the Corporation with the approval of the Trustee, during normal business hours on a Business Day at such place, the Warrant Certificate evidencing such Warrant, accompanied by (i) a duly completed and executed notice of exercise substantially in the form set out in such Warrant Certificate; (ii) a certified cheque or bank draft to the order of the Corporation in the amount of the aggregate Exercise Price payable on account of the Warrants exercised; and (iii) a duly completed and executed Residency Declaration in the form attached as Schedule “A”, certifying whether the Warrantholder is Canadian or non-Canadian. Warrantholders which fail to provide duly completed and executed Residency Declarations shall be deemed not to be a Canadian. Upon exercise,

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	Canadian Warrantholders shall be entitled to be issued Class A Shares and non-Canadian Warrantholders shall be entitled to be issued Class B Shares.
(2)	Notice of U.S. Registration Date. As soon as practicable after the Registration Statement has been declared effective by the SEC, the Corporation shall give notice in writing to the Trustee of the U.S. Registration Date and shall issue a press release announcing the U.S. Registration Date.
(3)	Surrender of Warrant Certificates. Any Warrant Certificate accompanied by the documents referred to in Section 4.1(1) will be deemed to have been surrendered to the Trustee only on personal delivery thereof to, or, if sent by mail or other means of transmission, on actual receipt thereof by, the Trustee or one of the other Persons at the office or one of the other places specified in Section 4.1(1).
(4)	Notice of Exercise. Any notice of exercise referred to in Section 4.1(1) must be signed by the Warrantholder, or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee, acting reasonably, and, if any Shares thereby issuable are to be issued to a Person or Persons other than the Warrantholder, must specify the name or names and the address or addresses of each such Person or Persons and the number of Shares to be issued to each such Person if more than one is so specified and accompanied by a duly completed and executed Residency Declaration of each Person to whom Shares are to be issued. If Shares are to be issued to more than one Person and if all Residency Declarations certify that all such Persons are Canadians, Class A Shares shall be issued to all such Persons; in any other case, Class B Shares shall be issued to all such Persons.
(5)	Exercise of Less than All. A Warrantholder who wishes to exercise the Warrants evidenced by any Warrant Certificate may exercise less than all of such Warrants and in the case of any such partial exercise shall be entitled to receive a Warrant Certificate, in form, signed and certified in accordance with the provisions of Article 2, evidencing the number of Warrants held by the Warrantholder which remain unexercised.
(6)	No Exercise before U.S. Registration Date. The Warrants may not be exercised, nor will certificates representing Shares be registered or delivered to any Warrantholder, before the U.S. Registration Date has occurred. Any notice of exercise of Warrants received before the U.S. Registration Date has occurred will be returned (together with all documentation accompanying such notice pursuant to Section 4.1(1)) to the Warrantholder who sent such notice if held by the Corporation for a period in excess of ten (10) Business Days.

Section 4.2      Effect of Exercise.

(1) Effect of Exercise. Upon the exercise of any Warrants in accordance with Section 4.1, the Shares thereby issuable shall be deemed to have been issued, and the Person or Persons to whom such Shares are to be issued shall be deemed to have become the holder or holders of record thereof, on the Exercise Date, unless the transfer registers for the Shares are closed on that date, in which case such Shares shall be deemed to

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	have been issued and such Person or Persons shall be deemed to have become the holder or holders of record thereof on the date on which such transfer registers are reopened, but such Shares shall be issued on the basis of the number of Shares to which such Person or Persons were entitled on the Exercise Date.
(2)	Mailing of Certificates. As soon as reasonably practicable (and, in any event, within five Business Days) after the surrender to the Trustee of the Warrant Certificates in accordance with Section 4.1(3), the Corporation shall, subject to the provisions of Section 4.7, cause the Trustee to mail to the Person or Persons in whose name or names the Shares thereby issued have been issued, at his or their respective addresses, or, if so specified, cause to be delivered to such Person or Persons at the place where the Warrant Certificates evidencing such Warrants were surrendered, certificates representing the Shares so issued.
(3)	Issuance to Person other than Holder. If any Shares issuable pursuant to any Warrants are to be issued to a Person or Persons other than the Warrantholder, the Warrantholder must pay to the Corporation or to the Trustee on its behalf an amount equal to all eligible transfer taxes or other government charges, and neither the Corporation nor the Trustee will be required to issue or deliver any certificates representing any such Shares unless or until such amount has been so paid or the Warrantholder has established to the satisfaction of the Corporation that such taxes and charges have been paid or that no such taxes or charges are owing.
(4)	Restrictions. If at the time of exercise of the Warrants there remain trading restrictions on the Shares pursuant to applicable securities legislation, the Corporation or the Trustee may, upon the advice of counsel, endorse any Shares to such effect.

Section 4.3      No Fractional Shares.

     The Corporation shall not be required to issue fractional Shares in satisfaction of its obligations hereunder. To the extent that a Holder of Warrants would otherwise have been entitled to receive on the exercise of the Warrants a fraction of a Share, such Shares shall be rounded down to the nearest whole number without any compensation therefor.

Section 4.4      Warrants Void After Expiry Time.

     After the Expiry Time, no Holder of a Warrant Certificate representing a Warrant which has not been validly exercised as set forth herein has any rights either under this Indenture or the Warrant Certificate, and the Warrants are void and of no value or effect. All provisions of this Indenture are subject to this Section.

Section 4.5      Notice of Expiry Time.

     At least twenty (20), and not more than thirty (30) Business Days prior to the Expiry Time, the Trustee shall provide notice to each registered Holder of unexercised Warrants that the Warrants held by such Holder will expire at the Expiry Date which notice shall be prepared by the Corporation and delivered to the Trustee for its distribution to Warrantholders. The notice shall provide for (i) the Expiry Time; (ii) the manner in which the Warrants may be exercised by the Holder thereof; and (iii) the consequences of non-exercise by the Holder prior to the Expiry Time.

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Section 4.6      Recording.

     The Trustee shall record particulars of each Warrant exercised, which particulars shall include the name and address of each Person to whom Shares are thereby issued, the number of Shares so issued and the Exercise Date in respect thereof. Within three Business Days after each Exercise Date, the Trustee shall provide such particulars in writing to the Corporation.

Section 4.7      Postponement of Delivery of Certificates.

     The Corporation shall not be required to deliver certificates for Shares during the period when the transfer books of the Corporation are closed by law and, in the event that the Exercise Date occurs during such period, the delivery of certificates may be postponed for a period not exceeding five Business Days after the date of the re-opening of the transfer books.

Section 4.8      Securities Restrictions.

     The certificates representing the Shares thereby issued will bear such legends as may, in the opinion of counsel to the Corporation, be necessary or advisable in order to avoid a violation of any securities laws of any applicable jurisdiction or to comply with the requirements of any stock exchange on which the Shares are listed, provided that if, at any time, in the opinion of counsel to the Corporation, such legends are no longer necessary or advisable in order to avoid a violation of any such laws or requirements, such legended certificate may thereafter be surrendered to the Corporation in exchange without charge for a certificate which does not bear such legend.

Section 4.9      Adjustments.

(1)

Adjustment. The rights of the Warrantholders, including in relation to the number of Shares issuable upon the exercise of a Warrant, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Section, and for such purposes and as used in this Section, (i) “Adjustment Period” means the period commencing immediately after the Effective Date and ending at the Expiry Time, and (ii) “Share Rate” means the rate at which the Shares are issuable upon the exercise of a Warrant, which rate, subject to adjustment pursuant to this Section will be one Share for each Warrant as of and from the date hereof.

(2)

Share Rate. The Share Rate in effect at any date will be subject to adjustment from time to time as follows:

(a) If and whenever at any time during the Adjustment Period, the Corporation shall:

(i)	subdivide or redivide the outstanding Shares into a greater number of Shares;
(ii)	consolidate, combine or reduce the outstanding Shares into a lesser number of Shares; or

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(iii) issue Shares to all or substantially all of the holders of Shares by way of a stock dividend or other distribution (other than an Ordinary Course Dividend),

then, in each such event, the Share Rate will, on the effective date of or the record date for such event, be adjusted by multiplying the Share Rate in effect immediately prior to such date by a fraction:

(i)	the numerator of which shall be the total number of Shares outstanding on such date after giving effect to such event; and
(ii)	the denominator of which shall be the total number of Shares outstanding on such date before giving effect to such event.

Such adjustment will be made successively whenever any such event shall occur. Any such issue of Shares by way of a stock dividend or other distribution shall be deemed to have been made on the record date for such stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under paragraph 4.9(2)(b) and paragraph 4.9(2)(c).

(b) If and whenever, at any time during the Adjustment Period, the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of Shares entitling the holders thereof, within a period expiring not more than 50 days after the record date for such issue, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such issuance, then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)

the numerator of which shall be the total number of Shares outstanding on such record date plus the total number of additional Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable); and

(ii)

the denominator of which shall be the aggregate of (A) the number of Shares outstanding on such record date and (B) a number determined by dividing the aggregate subscription or purchase price of the total number of additional Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by the Current Market Price as of the applicable record date.

Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such

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computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date had not been fixed or to the Share Rate which would then be in effect based upon the number of Shares (or securities convertible into or exchangeable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

(c) If and whenever at any time during the Adjustment Period the Corporation shall fix a record date for the making of a distribution to all or substantially all of the holders of Shares of:

(i)	shares of any class other than Shares, whether of the Corporation or any other corporation;
(ii)	rights, options or warrants other than rights options or warrants referred to in paragraph Section 4.9(2)(b);
(iii)	evidence of indebtedness; or
(iv)	cash, securities or other property or assets (other than an Ordinary Course Dividend);

then, in each such case, the Share Rate will be adjusted immediately after such record date by multiplying the Share Rate in effect on such record date by a fraction:

(i)

the numerator of which shall be the total number of Shares outstanding on such record date multiplied by the Current Market Price on such record date; and

(ii)

the denominator of which shall be (A) the product of the number of Shares outstanding on such record date and the Current Market Price on the earlier of such record date and the date on which the Corporation announces its intention to make such distribution reduced by (B) the aggregate fair market value (as determined by the directors at the time such distribution is authorized) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets to be so distributed.

Any Shares owned by or held for the account of the Corporation or any Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. Such adjustments will be made successively whenever such a record date is fixed. To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Share Rate will then be readjusted to the Share Rate which would then be in effect if such record date

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had not been fixed or to the Share Rate which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be.

(d)

In the absence of a resolution of the directors fixing a record date for any event referred to in this Section, the Corporation shall be deemed to have fixed as the record date therefor the earlier of the date on which holders of record of Shares are determined for the purpose of participating in such event and the date on which such event becomes effective.

(e)

If whenever at any time after the Effective Date and ending at the Expiry Time, any of the events referred to in Section 4.9(2)(a), (b) or (c) occurs and if such event results in an adjustment to the Share Rate, the Exercise Price shall be adjusted contemporaneously with each such adjustment of the Share Rate (including, for greater certainty, any readjustment of the Share Rate if and to the extent that a distribution or issuance of securities or exercise of rights, warrants or options pursuant to Section 4.9(2)(b) or (c) is not completed) by multiplying the Exercise Price in effect immediately prior to the occurrence of such event by a fraction:

(i)	the numerator of which shall be the number of Shares outstanding immediately before giving effect to such event; and
(ii)	the denominator of which shall be the number of Shares outstanding immediately after giving effect to such event.

(3) Fundamental Transactions.

(a) If and whenever at any time during the Adjustment Period, there is (i) any reclassification of the Shares at any time outstanding or any change of the Shares into other shares, securities or property of the Corporation, or any other capital reorganization of the Corporation of similar effect (other than as described in Section 4.9(2)), (ii) any amalgamation, arrangement, merger or other form of business combination of the Corporation with or into any other corporation resulting in any reclassification of the outstanding Shares or change of the Shares into other shares, securities or property of the Corporation or such other corporation, or (iii) any sale, lease, exchange or transfer all or substantially all of the undertaking or assets of the Corporation and/or the Subsidiaries of the Corporation to another corporation or entity not wholly-owned by the Corporation (each of the transactions contemplated in (i), (ii) and (iii), hereinafter, a “Fundamental Transaction”), then, in each such event, each Holder of any Warrant which is thereafter exercised will be entitled to receive, and shall accept, in lieu of the number of Shares to which such Warrantholder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such

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Holder would have been entitled to receive as a result of the Fundamental Transaction if, on the effective date thereof, such Warrantholder had been the registered holder of the number of Shares to which such Warrantholder was theretofore entitled upon such exercise.

(b)

If and whenever at any time during the Adjustment Period, there is a Fundamental Transaction which provides for holders of the outstanding Shares to receive consideration solely in the form of cash, each Warrantholder shall be deemed (i) where such cash consideration is, on a per Share basis, in an amount greater than the Exercise Price, to exercise its Warrants and such Warrantholder shall be entitled to receive, upon such deemed exercise, the cash consideration which such holder would have been entitled to receive had such exercise of Warrants taken place immediately prior to such Fundamental Transaction, less the Exercise Price thereof or (ii) where the cash consideration is, on a per Share basis, equal to or less than the Exercise Price, to surrender its Warrants, without payment of any consideration. Following such deemed exercise, all Warrants shall be cancelled and of no further value or effect.

	If necessary as a result of any Fundamental Transaction, appropriate adjustments will be made in the application of the provisions set forth in this Section with respect to the rights and interests thereafter of the Holders of Warrants to the end that the provisions set forth in this Section will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares or other securities or property thereafter deliverable upon the exercise of any Warrant. Any such adjustments will be made by and set forth in an indenture supplemental hereto approved by the directors and by the Trustee and shall for all purposes be conclusively deemed to be an appropriate adjustment.
(4)	Deferral of Adjustment. In any case in which this Section shall require that an adjustment shall become effective immediately after a record date for or an effective date of an event referred to herein, the Corporation may defer, until the occurrence and consummation of such event, issuing to the Holder of any Warrant exercised after such record date or effective date and before the occurrence and consummation of such event the additional Shares or other shares, securities or property issuable upon such exercise by reason of the adjustment required by such event, provided, however, that the Corporation will deliver to such Holder an appropriate instrument evidencing such Holder’s right to receive such additional Shares or other shares, securities or property upon the occurrence and consummation of such event and the right to receive any dividend or other distribution in respect of such additional Shares or other shares, securities or property declared in favour of the holders of record of Shares or of such other shares, securities or property on or after the Exercise Date or such later date as such holder would, but for the provisions of this Subsection, have become the holder of record of such additional Shares or of such other shares, securities or property pursuant hereto.
(5)	Adjustments Cumulative. The adjustments provided for in this Section are cumulative, shall, in the case of any adjustment to the Share Rate, be computed to

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	the nearest one one-hundredth of a Share and will apply (without duplication) to successive subdivisions, consolidations, distributions, issuances or other events resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, no adjustment of the Share Rate will be required (i) unless such adjustment would require an increase or decrease of at least 1% in the Share Rate then in effect (provided, however, that any adjustment which by reason of this Subsection is not required to be made will be carried forward and taken into account in any subsequent adjustment), (ii) if, in respect of any event described in this Section (other than the events referred to in Section 4.9(2)(a)(i), Section 4.9(2)(a)(ii) and Section 4.9(3)), the Holders of Warrants are entitled to participate in such event, or are entitled to participate within 45 days in a comparable event, on the same terms, mutatis mutandis as if the Warrants had been exercised prior to or on the effective date of or record date for such event, (iii) in respect of any Shares issuable or issued pursuant to any stock option or stock purchase plan in force from time to time for directors, officers or employees of the Corporation or of a Subsidiary or pursuant to the Warrants, (iv) in respect of any Shares issued on the exercise of any other stock options issued by the Corporation and outstanding on the date hereof, or (v) in respect of Shares issued on the conversion into Shares of preferred shares in the capital of the Corporation outstanding on the date hereof.
(6)	Resolution of Questions. In the event of any question arising with respect to the adjustments provided for in this Section, such questions shall be conclusively determined by the Corporation’s Auditors or, if they are unable or unwilling to act, by such firm of chartered accountants as is appointed by the Corporation and acceptable to the Trustee. Such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Trustee and the Warrantholders. If any such determination is made, the Corporation shall forthwith deliver a certificate to the Trustee describing such determination and give notice to the Warrantholders of such determination.
(7)	Other Actions. If and whenever at any time during the Adjustment Period, the Corporation shall take any action affecting or relating to the Shares, other than any action described in this Section, which in the opinion of the directors, acting reasonably, would prejudicially affect the rights of any Holders of Warrants, the Share Rate will be adjusted by the directors in such manner, if any, and at such time, as the directors may in their sole discretion determine to be equitable in the circumstances to such Holders.
(8)	Additional Actions. As a condition precedent to the taking of any action which would require an adjustment in any of the rights under the Warrants, the Corporation will take any action which may, in the opinion of counsel to the Corporation be necessary in order that the Corporation, or any successor to the Corporation or successor to the undertaking or assets of the Corporation, will be obligated to and may validly and legally issue all of the Shares or other shares, securities or property which the Holders of Warrants would be entitled to receive thereafter on the exercise thereof in accordance with the provisions hereof.

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(9) Notice to Trustee. As soon as possible after the effective date of or record date for any event referred to in this Section that requires or might require an adjustment in any of the rights under the Warrants, the Corporation will:

(a)	file with the Trustee, a Certificate of the Corporation specifying the particulars of such event and, to the extent determinable, any adjustment required and the computation of such adjustment; and
(b)	give notice to the Warrantholders of the particulars of such event and, to the extent determinable, any adjustment required.

Such notice need only set forth such particulars as have been determined at the date such notice is given. If any adjustment for which such notice is given is not then determinable, promptly after such adjustment is determinable the Corporation will:

(i)	file with the Trustee a Certificate of the Corporation showing the computation of such adjustment; and
(ii)	give notice to the Warrantholders of such adjustment.

The Trustee may act and rely, for all purposes, upon the certificate and any other documents filed by the Corporation pursuant to this Section.

(10)	Closing Transfer Books, etc. The Corporation will not close its transfer books or take any other corporate action which might deprive the Holder of a Warrant of the opportunity of exercising its right of acquisition pursuant thereto during the period of ten Business Days after the giving of any notice required by Section 4.9(9).
(11)	No Duty of Trustee. The Trustee:

(a)	shall not at any time be under any duty or responsibility to any Warrantholder to determine whether any facts exist which may require any adjustment in the Share Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making same;
(b)	shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or of any other shares, securities or property which may at any time be issued or delivered upon the exercise of any Warrant; and
(c)	shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or share or warrant certificates upon the surrender of any Warrant for the purpose of exercise, or to comply with any of the covenants contained in this Section.

(12) Post-Adjustment. After any adjustment pursuant to this Section, the term “Shares” where used in this Indenture shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, the Warrantholder is entitled to receive upon the exercise of its

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Warrants, and the number of Shares indicated in any exercise made pursuant to a Warrant shall be interpreted to mean the number of securities and other property and assets which, as a result of such adjustment and all prior adjustments pursuant to this Section 4.9, a Warrantholder is entitled to receive upon the exercise of a Warrant.

Section 4.10      Extension by Corporation.

     The directors of the Corporation may, from time to time and at any time prior to the Expiry Time, extend the Expiry Date hereunder without the consent of the Warrantholders or the Trustee, by giving notice in writing to the Trustee of a date which shall thereafter be the “Expiry Date” for all purposes hereunder. The Expiry Date shall be deemed so extended from and after delivery of the said notice.

ARTICLE 5
COVENANTS OF THE CORPORATION

Section 5.1      Covenants of the Corporation.

	The Corporation covenants with the Trustee that until the Expiry Time:
(1)	Maintenance. The Corporation will at all times maintain its corporate existence (subject to Section 8.2), carry on and conduct its business, and that of its material Subsidiaries, in a proper, efficient and business-like manner and keep or cause to be kept proper books of account in accordance with generally accepted accounting practice.
(2)	Reservation of Shares. The Corporation will reserve and keep available sufficient unissued Class A Shares and Class B Shares to enable it to satisfy its obligations on the exercise of the Warrants.
(3)	Warrants and Issue of Shares. The Warrants shall, when countersigned and registered as herein provided, be valid and enforceable against the Corporation and, subject to the provisions of the Indenture, the Corporation will cause the Shares from time to time issued pursuant to the exercise of the Warrants, and the certificates representing such Shares, to be issued and delivered in accordance with the Warrants and the terms hereof and all Shares that are issued on exercise of the Warrants will be fully paid and non-assessable shares.
(4)	Open Registers. The Corporation will cause the Trustee to keep open the registers of Holders and registers of transfers referred to in Section 3.1 as required by such Section and will not take any action or omit to take any action which would have the effect of preventing the Warrantholders from exercising any of the Warrants or receiving any of the Shares upon such exercise.
(5)	Further Assurances. The Corporation will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances as the Trustee may reasonably require for better accomplishing and affecting the provisions of this Indenture.

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(6)

Trustee’s Remuneration. The Corporation shall pay (and shall be responsible for the payment thereof) to the Trustee, reasonable remuneration agreed to in writing for its services hereunder and will repay to the Trustee, upon delivery of original invoices therefor, the amount of all reasonable out-of-pocket expenditures that the Trustee reasonably incurs in the execution of its obligations hereunder with respect to the Warrants without duplication of any amounts otherwise claimed or paid to the Trustee, including reasonable fees and disbursement reasonably incurred by counsel and all other advisors reasonably retained by the Trustee in connection herewith.

(7)

Filings.

(a)	The Corporation will prepare and file, on a date not earlier than six months and not later than seven months from the date hereof, the Registration Statement, will use its reasonable commercial efforts to have the SEC declare the Registration Statement effective as soon as possible thereafter, and will use its commercially reasonable efforts to cause the Registration Statement to remain effective until the applicable Expiry Date, unless the Corporation delivers to the Trustee an opinion of a nationally-recognized U.S. securities counsel to the effect that continued effectiveness of the Registration Statement is not required in order for the Corporation to permit exercises of Warrants in compliance with the U.S. Securities Act;
(b)	The Corporation will prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the applicable Expiry Date (subject to Section 5.1(7)(a)); and
(c)	If required under securities or “blue sky” laws of any applicable jurisdiction, the Corporation will use commercially reasonable efforts to register or qualify for distribution the Shares issued upon the exercise of the Warrants in such jurisdiction, provided that the Corporation will not be required in connection therewith to file a general consent to service of process, qualify as a foreign corporation doing business in such jurisdiction or comply with any other requirement reasonably deemed by the Corporation to be unduly burdensome.

(8)	Listing. The Corporation will use its reasonable commercial efforts to maintain the listing of the Warrants and the Shares on the Toronto Stock Exchange.
(9)	General Performance. The Corporation will perform and carry out all acts and things to be done by it as provided in this Indenture.

Section 5.2      Performance of Covenants by Trustee.

     If the Corporation fails to perform any of its obligations under this Indenture, the Trustee may notify the Warrantholders of such failure or may itself perform any of such obligations capable of being performed by it, but will not be bound to do so or to notify the Warrantholders that it is so doing. All reasonable sums expended or advanced by the Trustee in performance of its rights provided for in this Section 5.2 shall be repayable by the

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Corporation in pro rata proportions based on the sums expended that are attributable to its failure to perform hereunder, upon presentation by the Trustee of receipts therefore. No such performance, expenditure or advance by the Trustee shall be deemed to relieve the Corporation of any default hereunder.

ARTICLE 6
ENFORCEMENT

Section 6.1      Suits by Warrantholders.

     All or any of the rights conferred on the Holder of any Warrant by the terms of the Warrant Certificate evidencing such Warrant or of this Indenture may be enforced by such Holder by appropriate legal proceedings but without prejudice to the right which is hereby conferred on the Trustee to proceed in its own name or on behalf of the Holders of Warrants to enforce each and every provision herein contained for the benefit of the Warrantholders.

ARTICLE 7
MEETINGS OF WARRANTHOLDERS

Section 7.1      Right to Convene Meetings.

(1)	Convening of Meeting. The Trustee may at any time and from time to time convene a meeting of the Warrantholders, and will do so on receipt of a Written Request of the Corporation or a Warrantholders’ Request and on being funded and indemnified to its reasonable satisfaction by the Corporation or by one or more of the Warrantholders signing such Warrantholders’ Request against the costs which it may incur in connection with calling and holding such meeting.
(2)	Failure to Convene. If the Trustee fails, within 15 Business Days after receipt of such Written Request of the Corporation or Warrantholders’ Request, funding and indemnification, to give notice convening a meeting, the Corporation or any of such Warrantholders, as the case may be, may convene such meeting.
(3)	Place of Meeting. Every such meeting shall be held in Montreal, Quebec, or such other place as is approved or determined by the Trustee and the Corporation.

Section 7.2      Notice.

(1)

Notice. At least ten Business Days’ notice of any meeting must be given to the Warrantholders, to the Trustee (unless the meeting has been called by it) and to the Corporation (unless the meeting has been called by it).

(2)

Contents. The notice of the meeting must state the time when and the place where the meeting is to be held, state briefly the general nature of the business to be transacted thereat and shall contain such information as is reasonably necessary to enable the Warrantholders to make an informed decision on such matter(s), but it shall not be necessary for the notice to set out the terms of any resolution to be proposed or any of the provisions of this Article.

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Section 7.3      Chairperson.

     Some Person (who need not be a Warrantholder) designated in writing by the Trustee shall be chairperson of the meeting or, if no Person is so designated or the Person so designated is not present within 30 minutes after the time fixed for the holding of the meeting, the Warrantholders present in Person or by proxy may choose some Person present to be chairperson.

Section 7.4      Quorum.

(1)	Quorum. Subject to the provisions of Section 7.12, at any meeting of Warrantholders a quorum shall consist of Warrantholders present either in person or by proxy at the commencement of the meeting holding in the aggregate not less than 20% of the total number of Warrants then outstanding.
(2)	No Quorum. If a quorum of Warrantholders is not present within 30 minutes after the time fixed for holding a meeting, the meeting, if summoned by Warrantholders or on a Warrantholders’ Request, shall be dissolved, but, subject to Section 7.12, in any other case shall be adjourned to the fifth following Business Day at the same time and place and three Business Days’ notice of the adjourned meeting shall be given to the Warrantholders.
(3)	Adjourned Meeting. At the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum and may transact any business for which the meeting was originally convened notwithstanding the number of Warrants that they hold.

Section 7.5      Power to Adjourn.

     The chairperson of a meeting at which a quorum of the Warrantholders is present may, with the consent of the meeting, adjourn the meeting, and no notice of such adjournment need be given except as the meeting prescribes.

Section 7.6      Show of Hands.

     Every question submitted to a meeting, other than an Extraordinary Resolution, shall be decided in the first place by a majority of the votes given on a show of hands and, unless a poll is duly demanded as herein provided, a declaration by the chairperson that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact. In the case of an equality of votes on a show of hands, the chairperson shall not have a casting vote.

Section 7.7      Poll.

(1)	Extraordinary Resolution. On every Extraordinary Resolution, and on every other question submitted to a meeting on which a poll is directed by the chairperson or requested by one or more Warrantholders acting in Person or by proxy, a poll shall be taken in such manner as the chairperson directs.
(2)	Other. Questions other than those required to be determined by Extraordinary Resolution shall be decided by a majority of the votes cast on the poll.

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Section 7.8      Voting.

     On a show of hands each Person present and entitled to vote, whether as a Warrantholder or as proxy for one or more absent Warrantholders, or both, shall have one vote, and on a poll each Warrantholder present in person or represented by a proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each Warrant held by such Holder. A proxy need not be a Warrantholder. The chairperson of any meeting shall be entitled to vote in respect of any Warrants and proxies held by him or her.

Section 7.9      Regulations.

(1) Ability to Make. The Trustee, or the Corporation with the approval of the Trustee, may from time to time make or vary such regulations not contrary to the provisions of this Indenture, as it thinks fit:

(a)	for the form of instrument appointing a proxy, the manner in which it must be executed and verification of the authority of a Person who executes it on behalf of a Warrantholder;
(b)	governing the places at which and the times by which voting certificates or instruments appointing proxies must be deposited;
(c)	generally for the calling of meetings of Warrantholders and the conduct of business thereat; and
(d)	for the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxies to be sent by mail, cable, telex or other means of prepaid, transmitted or recorded communication before the meeting to the Corporation or to the Trustee at the place where the meeting is to be held and for voting pursuant to instruments appointing proxies so deposited as though the instruments themselves were produced at the meeting.

Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted.

(2) Recognition. Except as such regulations provide, the only Persons who shall be recognized at a meeting as the Holders of any Warrants, or as entitled to vote or, subject to Section 7.10, to be present at the meeting in respect thereof, shall be the registered Holders of such Warrants or Persons holding proxies on their behalf.

Section 7.10      The Corporation, Warrantholders and Trustee may be Represented.

     The Corporation, Warrantholders and the Trustee by their respective employees, officers or directors, and the counsel of the Corporation, Warrantholders and the Trustee, may attend any meeting of Warrantholders, but shall have no vote as such.

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Section 7.11      Powers Exercisable by Extraordinary Resolution.

     In addition to all other powers conferred on them by the other provisions of this Indenture or by law, the Warrantholders at a meeting shall have the power, exercisable from time to time by Extraordinary Resolution:

(1)	to assent to or sanction any amendment, modification, abrogation, alteration, compromise or arrangement of any right of the Warrantholders or, with the reasonable consent of the Trustee, of the Trustee in its capacity as Trustee hereunder or on behalf of the Warrantholders against the Corporation, whether such right arises under this Indenture or otherwise, which shall be agreed to by the Corporation, and to authorize the Trustee to concur in and execute any indenture supplemental hereto in connection therewith;
(2)	to amend, alter or repeal any Extraordinary Resolution previously passed;
(3)	subject to arrangements as to financing and indemnity satisfactory to the Trustee, to direct or authorize the Trustee to enforce any obligation of the Corporation under this Indenture or to enforce any right of the Warrantholders in any manner specified in the Extraordinary Resolution;
(4)	to direct or authorize the Trustee to refrain from enforcing any obligation or right referred to in Section 7.11(3);
(5)	to waive and direct the Trustee to waive any default by the Corporation in complying with any provision of this Indenture, either unconditionally or on any condition specified in the Extraordinary Resolution;
(6)	to appoint a committee with power and authority to exercise, and to direct the Trustee to exercise, on behalf of the Warrantholders, such of the powers of the Warrantholders as are exercisable by Extraordinary Resolution;
(7)	to restrain any Warrantholder from taking or instituting any suit, action or proceeding against the Corporation for the enforcement of any obligation of the Corporation under this Indenture or to enforce any right of the Warrantholders;
(8)	to direct any Warrantholder who, as such, has brought any suit, action or proceeding, to stay or discontinue or otherwise deal therewith on payment of the costs, charges and expenses reasonably and properly incurred by him in connection therewith;
(9)	to assent to any change in or omission from the provisions contained in the Warrant Certificates and this Indenture or any ancillary or supplemental instrument which may be agreed to by the Corporation, and to authorize the Warrantholders to concur in and execute any ancillary or supplemental indenture embodying the change or omission;
(10)	to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation; and

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(11) from time to time and at any time to remove the Trustee and appoint a successor Trustee.

Section 7.12      Meaning of “Extraordinary Resolution”.

(1)	Meaning. The expression “Extraordinary Resolution” when used in this Indenture means, subject to the provisions of this Section and of Section 7.15 and Section 7.16, a motion proposed at a meeting of Warrantholders duly convened for that purpose and held in accordance with the provisions of this Article at which there are present in person or by proxy Warrantholders holding in the aggregate more than 30% of the total number of Warrants then outstanding and passed by the affirmative votes of Warrantholders who hold in the aggregate not less than 66 2/3% of the total number of Warrants represented at the meeting and voted on the motion.
(2)	Quorum. If, at a meeting called for the purpose of passing an Extraordinary Resolution, the quorum required by Section 7.12(1) is not present within 30 minutes after the time appointed for the meeting, the meeting, if convened by Warrantholders or on a Warrantholders’ Request, shall be dissolved, but in any other case shall stand adjourned to such day, being not less than five Business Days or more than ten Business Days later, and to such place and time, as is appointed by the chairperson.
(3)	Notice. Not less than three Business Days’ notice must be given to the Warrantholders of the time and place of such adjourned meeting.
(4)	Form of Notice. The notice must state that at the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars.
(5)	Quorum at Adjourned Meeting. At the adjourned meeting two Warrantholders present in person or by proxy shall form a quorum and may transact any business for which the meeting was originally convened, and a motion proposed at such adjourned meeting and passed by the requisite vote as provided in Section 7.12(1) shall be an Extraordinary Resolution within the meaning of this Indenture notwithstanding that Warrantholders holding in the aggregate 30% of the total number of Warrants outstanding may not be present.
(6)	Poll. Votes on an Extraordinary Resolution must always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

Section 7.13      Powers Cumulative.

     Any one or more of the powers, and any combination of the powers, in this Indenture stated to be exercisable by the Warrantholders by Extraordinary Resolution or otherwise, may be exercised from time to time, and the exercise of any one or more of such powers or any combination of such powers from time to time shall not prevent the Warrantholders from exercising such power or powers or combination of powers thereafter from time to time.

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Section 7.14      Minutes.

     Minutes of all resolutions passed and proceedings taken at every meeting of the Warrantholders shall be made and duly entered in books from time to time provided for such purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chairperson of the meeting at which such resolutions were passed or such proceedings were taken, shall be prima facie evidence of the matters therein stated, and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes have been so made, entered and signed shall be deemed to have been duly convened and held, and all resolutions passed and proceedings taken thereat to have been duly passed and taken.

Section 7.15      Instruments in Writing.

     Any action that may be taken and any power that may be exercised by Warrantholders at a meeting held as provided in this Article may also be taken and exercised by Warrantholders who hold in the aggregate not less than 50% of the total number of Warrants at the time outstanding or in the case of an Extraordinary Resolution, Warrantholders who hold in the aggregate not less than 66 2/3% of the total number of Warrants at the time outstanding, by their signing, each in person or by attorney duly appointed in writing, an instrument in writing in one or more counterparts, and the expression “Extraordinary Resolution” when used in this Indenture includes a resolution embodied in an instrument so signed.

Section 7.16      Binding Effect of Resolutions.

     Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article at a meeting of Warrantholders shall be binding on all Warrantholders, whether present at or absent from the meeting and whether voting for or against the resolution or abstaining, and every instrument in writing signed by Warrantholders in accordance with Section 7.15 shall be binding on all Warrantholders, whether signatories thereto or not, and every Warrantholder and the Trustee (subject to the provisions for its indemnity herein contained) shall be bound to give effect accordingly to every such resolution and instrument in writing. In the case of an instrument in writing, the Trustee shall give notice of the effect of such instrument in writing to all Warrantholders not signatory thereto and to the Corporation as soon as reasonably practicable.

Section 7.17      Holdings by the Corporation and Subsidiaries Disregarded.

     In determining whether Warrantholders holding the required total number of Warrants are present in person or by proxy for the purpose of constituting a quorum, or have voted or consented to a resolution, Extraordinary Resolution, consent, waiver, Warrantholders’ Request or other action under this Indenture, a Warrant held by the Corporation or by a Subsidiary shall be deemed to be not outstanding. The Corporation shall provide the Trustee with a Certificate of the Corporation providing details of any Warrants held by the Corporation or by a Subsidiary upon the written request of the Trustee.

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ARTICLE 8
SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS

Section 8.1      Provision for Supplemental Indentures for Certain Purposes.

     From time to time the Corporation (when authorized by the directors) and the Trustee may, subject to the provisions hereof, and shall when so directed hereby, execute and deliver by their proper officers indentures or instruments supplemental hereto, which thereafter shall form part hereof, for any or all of the following purposes:

(1)	adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of counsel acceptable to the Trustee, are necessary or advisable, provided that the same are not, in the reasonable opinion of the Trustee, prejudicial to the interests of the Warrantholders;
(2)	giving effect to any Extraordinary Resolution;
(3)	making such provisions not inconsistent with this Indenture as may be necessary or desirable in the opinion of counsel acceptable to the Trustee with respect to matters or questions arising hereunder, provided that such provisions are not, in the reasonable opinion of the Trustee, prejudicial to the interests of the Warrantholders;
(4)	evidencing any succession, or successive successions, to the Corporation and the assumption by any successor of the covenants of the Corporation, herein and in the Warrants contained as provided hereafter in this Article; and
(5)	for any other purpose not inconsistent with the terms of this Indenture, including the correction or rectification of any ambiguities, defective provisions, errors or omissions herein in accordance with advice of counsel acceptable to the Trustee, provided that, in the reasonable opinion of the Trustee, the rights of the Trustee and of the Warrantholders are not prejudiced thereby.

Section 8.2      Successor Corporations.

     Subject to Section 4.9(3), in the event of any Fundamental Transaction, the successor corporation resulting from such Fundamental Transaction (if not the Corporation) shall be bound by the provisions hereof and for the due and punctual performance and observance of each and every covenant and obligation contained in this Indenture to be performed by the Corporation and will execute and deliver to the Trustee a supplemental indenture and such other instruments as are satisfactory in form to the Trustee and in the opinion of counsel are necessary or advisable to evidence the express assumption by the successor corporation of such obligations.

ARTICLE 9
CONCERNING THE TRUSTEE

Section 9.1      Trust Indenture Legislation.

     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of Applicable Legislation, the mandatory requirement shall

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prevail. The Corporation and the Trustee each shall at all times in relation to this Indenture and any action to be taken hereunder observe and comply with and be entitled to the benefits of Applicable Legislation.

Section 9.2      Rights and Duties of Trustee.

(1)	Duty of Trustee. In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good faith with a view to the best interests of the Warrantholders, and shall exercise that degree of care, diligence and skill that a reasonably prudent Trustee would exercise in comparable circumstances. The Trustee shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required so to do under the terms hereof; nor shall the Trustee be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee and in the absence of any such notice the Trustee may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Trustee to determine whether or not the Trustee shall take action with respect to any default.
(2)	No Relief From Liability. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent act, negligent failure to act, wilful misconduct or bad faith.
(3)	Actions. The obligation of the Trustee to commence or continue any act, action or proceeding in connection herewith, including without limitation, for the purpose of enforcing any right of the Trustee or the Warrantholders hereunder is on the conditions that the Trustee shall have received a Warrantholders’ Request specifying the act, action or proceeding which the Trustee is requested to take and, when required by notice to the Warrantholders by the Trustee, the Trustee is furnished by one or more Warrantholders with sufficient funds to commence or continue such act, action or proceeding and an indemnity reasonably satisfactory to the Trustee to protect and hold it harmless against the costs, charges, expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof.
(4)	Funding. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless it is so indemnified.
(5)	Deposit of Warrants. The Trustee may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Warrantholders at whose instance it is acting to deposit with the Trustee the Warrant Certificates held by them, for which certificates the Trustee shall issue receipts.
(6)	Restriction. Every provision of this Indenture that relieves the Trustee of liability or entitles it to rely on any evidence submitted to it is subject to the provisions of Applicable Legislation, of this Section and of Section 9.3.

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Section 9.3      Evidence, Experts and Advisers.

(1)	Evidence. In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Trustee such additional evidence of compliance with any provision hereof, and in such form, as is prescribed by Applicable Legislation or as the Trustee reasonably requires by written notice to the Corporation.
(2)	Reliance by Trustee. In the exercise of any right or duty hereunder the Trustee, if it is acting in good faith, may act and rely, as to the truth of any statement or the accuracy of any opinion expressed therein, on any statutory declaration, opinion, report, certificate or other evidence furnished to the Trustee pursuant to a provision hereof or of Applicable Legislation or pursuant to a request of the Trustee, if such evidence complies with Applicable Legislation and the Trustee examines such evidence and determines that it complies with the applicable requirements of this Indenture.
(3)	Statutory Declaration. Whenever Applicable Legislation requires that evidence referred to in Section 9.3(1) be in the form of a statutory declaration, the Trustee may accept such statutory declaration in lieu of a Certificate of the Corporation required by any provision hereof. Any such statutory declaration may be made by any one or more of the President, Vice-President, Secretary or Assistant Secretary of the Corporation or by any other officer(s) or director(s) of the Corporation to whom such authority is delegated by the directors from time to time. In addition, the Trustee may act and rely and shall be protected in acting and relying upon any resolution, certificate, direction, instruction, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram, cablegram or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties.
(4)	Proof of Execution. Proof of the execution of any document or instrument in writing, including a Warrantholders’ Request, by a Warrantholder may be made by the certificate of a notary public, or other officer with similar powers, that the Person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution, or in any other manner that the Trustee considers adequate.
(5)	Experts. The Trustee may employ or retain such counsel, accountants, engineers, appraisers, or other experts or advisers as it reasonably requires for the purpose of determining and discharging its rights and duties hereunder and may pay the reasonable remuneration and disbursements for all services so performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct or negligence on the part of any of them who has been selected with due care by the Trustee. Any remuneration so paid by the Trustee shall be repaid to the Trustee by the Corporation in accordance with Section 5.1(6). The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant or other expert or advisor, whether retained or employed by the Corporation or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.

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Section 9.4      Documents, Money etc. Held by Trustee.

(1)	Safekeeping. Any security, document of title or other instrument that may at any time be held by the Trustee subject to the trusts hereof may be placed in the deposit vaults of the Trustee or of any Canadian chartered bank or trust company or deposited for safekeeping with any such bank or trust company.
(2)	Holding of Funds. Unless herein otherwise expressly provided, any money held by the Trustee pending the application or withdrawal thereof under any provision of this Indenture may be deposited in trust in an account with the Trustee or in the name of the Trustee in any Canadian chartered bank or trust company at the rate (if any) then current on similar deposits.
(3)	Interest. All interest or other income received by the Trustee in respect of such deposits and investments shall belong to the Corporation.

Section 9.5      Action by Trustee to Protect Interests.

     The Trustee shall have power to institute and to maintain such actions and proceedings as it considers necessary or expedient to protect or enforce its interests and the interests of the Warrantholders.

Section 9.6      Trustee not Required to Give Security.

     The Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture.

Section 9.7      Protection of Trustee.

(1) Protection. By way of supplement to the provisions of any law for the time being relating to Trustees, it is expressly declared and agreed that:

(a)	the Trustee shall not be liable for or by reason of, or required to substantiate, any statement of fact, representation or recital in this Indenture or in the Warrant Certificates (except the representation contained in Section 9.9 or in the certificate of the Trustee on the Warrant Certificates), but all such statements or recitals are and shall be deemed to be made by the Corporation;
(b)	nothing herein contained shall impose on the Trustee any obligation to see to, or to require evidence of, the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;
(c)	the Trustee shall not be bound to give notice to any Person of the execution hereof;
(d)	the Trustee shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach by the Corporation of any obligation or warranty herein contained or of any act of any director, officer, employee or agent of the Corporation;

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(e)	the Trustee, in its personal or any other capacity, may buy, lend upon and deal in securities of the Corporation and in the Warrants and generally may contract and enter into financial transactions with the Corporation or any related corporation without being liable to account for any profit made thereby;
(f)	the Trustee shall incur no liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail, or any other means; and
(g)	the Trustee shall not be responsible for ensuring compliance with any securities laws applicable to the issuance, transfer, exercise or exchange of any Warrants or underlying Class A Shares or Class B Shares. The Trustee shall be entitled to conclusively rely on the Residency Declaration provided to it with respect to the proper entitlement and issuance of underlying Class A Shares or Class B Shares.

(2) Indemnity. In addition to and without limiting any protection of the Trustee hereunder or otherwise by law, the Corporation hereby indemnifies the Trustee and saves it and its officers, directors, employees and agents harmless from all liabilities, suits, damages, costs, expenses and actions which may be brought against or suffered by it arising out of or connected with the performance by it of its duties hereunder except to the extent that such liabilities, suits, damages, costs and actions are attributable to the negligence or wilful misconduct of the Trustee. Notwithstanding any other provision hereof, this indemnity shall survive any removal or resignation of the Trustee, discharge of this Indenture and termination of any trusts hereunder.

Section 9.8      Replacement of Trustee.

(1)	Resignation. The Trustee may resign its trust and be discharged from all further duties and liabilities hereunder, except as provided in this Section, by giving to the Corporation and the Warrantholders not less than 30 days’ notice in writing or, if a new Trustee has been appointed, such shorter notice as the Corporation accepts as sufficient.
(2)	Removal. The Warrantholders by Extraordinary Resolution may at any time remove the Trustee and appoint a new Trustee.
(3)	Appointment of New Trustee. If the Trustee so resigns or is so removed or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable of acting hereunder, the Corporation shall forthwith appoint a new Trustee unless a new Trustee has already been appointed by the Warrantholders.
(4)	Failure to Appoint. Failing such appointment by the Corporation, the retiring Trustee or any Warrantholder may apply at the expense of the Corporation to the Superior Court of Quebec (“Court”), on such notice as such Court directs, for the appointment of a new Trustee.

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(5)	New Trustee. Any new Trustee appointed under this Section must be a corporation authorized to carry on the business of a trust company in Quebec and, if required by the Applicable Legislation of any other province, in such other province. On any such appointment the new Trustee shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Trustee without any further assurance, conveyance, act or deed, but there shall be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as, in the opinion of counsel, are necessary or advisable for the purpose of assuring the transfer of such powers, rights, duties and responsibilities to the new Trustee. Any new Trustee so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Warrantholders and by the Corporation.
(6)	Notice of New Trustee. On the appointment of a new Trustee, the Corporation shall promptly give notice thereof to the Warrantholders in accordance with Section 10.2(1).
(7)	Successor Trustee. A corporation into or with which the Trustee is merged or consolidated or amalgamated, or a corporation succeeding to the trust business of the Trustee, shall be the successor to the Trustee hereunder without any further act on its part or on the part of any party hereto if such corporation would be eligible for appointment as a new Trustee under Section 9.8(5).
(8)	Certificates. A Warrant Certificate certified but not delivered by a predecessor Trustee may be delivered by the new or successor Trustee in the name of the predecessor Trustee or successor Trustee.

Section 9.9      Conflict of Interest.

     The Trustee represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists between its role as a fiduciary hereunder and its role in any other capacity and if a material conflict of interest arises hereafter it shall, within ten days after ascertaining that it has such material conflict of interest, either eliminate the conflict of interest or resign its trust hereunder.

Section 9.10      Trustee’s Authority to Carry on Business.

     The Trustee represents to the Corporation that at the date hereof it is authorized to carry on the business of a trust company in Quebec and each other province and territory of Canada. If, notwithstanding the provisions of this Section 9.10, the Trustee ceases to be authorized to carry on such business, the validity and enforceability of this Indenture and the interest of the Warrantholders in the Warrants registered hereunder shall not be affected in any manner whatsoever by reason only of such event provided that the Trustee, within 30 days after ceasing to be authorized to carry on business, either becomes so authorized or resigns in the manner and with the effects specified in Section 9.8.

Section 9.11      Acceptance of Trust.

     The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform them on the terms and conditions herein set forth.

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Section 9.12      Trust Provisions.

     For greater certainty, notwithstanding any other provisions of this Indenture or any references in this Indenture, or in any Warrant, to the Trustee as a trustee or acting as trustee, no trust within the meaning of Chapter II of Title Six of Book Four of the Civil Code of Quebec is intended to be or is established by this Indenture, except for any trust which may be established for the purposes of, and solely to the extent contemplated by Section 9.4. All references in this Indenture or in any Warrant to the word “trust” or “trustee” or to the expression “in trust” or other similar word or expression shall only refer to any trust which may be established under Section 9.4. Any such trust shall be deemed to be established by the mere transfer or the taking of possession by the Trustee of the property subject to, and for the purposes of, such trust. In addition, the provisions of this Indenture in respect of the administration of the property of others, including, without limitation, in the case of the Trustee, Article 11, shall apply in lieu of the provisions of Title Seven of Book Four of the Civil Code of Quebec.

ARTICLE 10
GENERAL

Section 10.1      Notice to the Corporation and Trustee.

(1) Subject to the terms and provisions of this Indenture, any notice, direction or other communication hereunder shall be in writing and shall be given by delivery or by facsimile transmission (if receipt of such transmission is confirmed):

(a)	if to the Corporation at:
	Microcell Telecommunications Inc. 800 de La Gauchetière Street West Suite 4000 Montreal, Quebec H5A 1K3
	Attention:  Vice President, Legal Affairs Facsimile:  (514) 846-6928
(b)	if to the Trustee at:
	Computershare Trust Company of Canada 1500 University Street Suite 700 Montreal, Quebec H3A 3S8
	Attention:    Manager, Corporate Trust Telecopier:  (514) 982-7677

Any such notice shall be deemed to have been given if delivered by courier during normal business hours of the recipient on a Business Day, on the day following the

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	date of delivery and if sent by facsimile transmission, on the Business Day so sent provided that any delivery made or sent by facsimile after 4:00 p.m. (Montreal time) on a Business Day, shall be deemed to be received on the next following Business Day.
(2)	Change of Address. The Corporation or the Trustee, as the case may be, may from time to time notify the other in the manner provided in Section 10.1(1) of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Corporation or the Trustee, as the case may be, for all purposes of this Indenture.

Section 10.2      Notice to Warrantholders.

(1)

Notice. Unless otherwise expressly provided herein, a notice to be given hereunder to Warrantholders will be deemed to be validly given if the notice is sent by ordinary surface or air mail, postage prepaid, addressed to the Warrantholders or delivered (or so mailed to certain Warrantholders and so delivered to the other Warrantholders) at their respective addresses appearing on any of the registers of Holders described in Section 3.1, provided, however, that if, by reason of a strike, lockout or other work stoppage, actual or threatened, involving Canadian postal employees, the notice could reasonably be considered unlikely to reach or likely to be delayed in reaching its destination, the notice will be valid and effective only if it is so delivered or is given by publication twice in the Report on Business Section in the national edition of The Globe and Mail newspaper or any other newspaper published in Toronto and Montreal.

(2)

Date of Notice. A notice so given by mail or so delivered will be deemed to have been given on the first Business Day after it has been mailed or on the day on which it has been delivered, as the case may be, and a notice so given by publication will be deemed to have been given on the day on which it has been published as required. In determining under any provision hereof the date when notice of a meeting or other event must be given, the date of giving notice will be included and the date of the meeting or other event will be excluded. Accidental error or omission in giving notice or accidental failure to mail notice to any Warrantholder will not invalidate any action or proceeding founded thereon.

Section 10.3      Satisfaction and Discharge of Indenture.

On the earlier of:

(a)	the date by which there has been delivered to the Trustee for exercise, exchange or surrender for cancellation all Warrant Certificates theretofore certified hereunder; or
(b)	the Expiry Date;

and if all certificates representing Shares required to be issued in compliance with the provisions hereof have been issued and delivered hereunder in accordance with such provisions, if all payments required to be made in compliance with the provisions of this Indenture have been made in accordance with such provisions and payment to the Trustee

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of the fees and other remuneration payable to the Trustee, this Indenture shall cease to be of further effect and, on demand of and at the cost and expense of the Corporation and on delivery to the Trustee of a Certificate of the Corporation stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with and on payment to the Trustee of the fees and other remuneration payable to the Trustee, the Trustee shall execute proper instruments acknowledging satisfaction of and discharging this Indenture.

Section 10.4      Sole Benefit of Parties and Warrantholders.

     Nothing in this Indenture or the Warrant Certificates, expressed or implied, shall give or be construed to give to any Person other than the parties hereto and the Warrantholders, as the case may be, any legal or equitable right, remedy or claim under this Indenture or the Warrant Certificates, or under any covenant or provision herein or therein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Warrantholders.

Section 10.5      Discretion of Directors.

     Any matter provided herein to be determined by the directors shall be determined by the directors in their sole discretion, acting in good faith, and a determination so made shall be conclusive.

Section 10.6      Language.

     The parties hereby acknowledge that they have expressly required this Indenture and all notices, statements of account and other documents required or permitted to be given or entered into pursuant hereto to be drawn up in the English language only. Les parties reconnaissent avoir expressément demandées que la présente convention ainsi que tout avis, tout état de compte et tout autre document à être ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.

Section 10.7      Counterparts.

     This Indenture may be executed in any number of counterparts, which taken together shall form one and the same instrument.

[The remainder of this page was intentionally left blank.]

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     IN WITNESS WHEREOF the parties hereto have executed this Indenture as of the day and year first above written.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté Vice President, Legal Affairs

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

SCHEDULE “A”
Form of Residency Declaration

TO: Computershare Trust Company of Canada

1.	In connection with the Warrants of Microcell Telecommunications Inc. issued pursuant to a certain Indenture dated May 1, 2003, the undersigned, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered upon exercise of the Warrants, hereby DECLARES and REPRESENTS that the ultimate beneficial owner of the Shares issued upon exercise will be:
	o the undersigned, OR
	o if other than the undersigned,

(Name and Address)

2.	The beneficial owner of the Shares issued upon exercise will be a Canadian (as defined herein):
	o Yes      o No

For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2(1) of the Citizenship Act (Canada) who is ordinarily resident in Canada;
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship;
(c)	a Canadian government, whether federal, provincial or local, or an agency thereof;
(d)	a corporation without share capital, where a majority of its directors or officers, as the case may be, are appointed or designated, either by their personal names or by their names of offices, by one or more of:

(i) a federal or provincial statute or regulations made under a federal or provincial statute;

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(ii)	the Governor in Council or the lieutenant governor in Council of a province; or
(iii)	a minister of the Crown in right of Canada or of a province;

(e)	a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3% of the issued and outstanding voting shares of such corporation, and which is not otherwise controlled by non-Canadians;
(f)	a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80% of the board and of each committee of its directors of which are individual Canadians;
(g)	a trust in which Canadians have not less than 66 2/3% of the beneficial interest, and of which a majority of the trustees are Canadians;
(h)	a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate the Pension Fund Society of the Dominion Bank, S.C. 1887, c 55, S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; or
(i)	a partnership in which each of the partners is a Canadian within the meaning of paragraphs (a) to (h) above.

DATED this day of                      , 200      .

(Name)                                                                                       

(Address)                                                                                 

(Signature)                                                                                 

SCHEDULE “B”
Form of Warrant Certificate

THE SECURITIES ISSUABLE UPON THE EXERCISE OF THE WARRANTS EVIDENCED BY THE PRESENT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (“U.S. SECURITIES ACT”). WARRANTS EVIDENCED BY THIS WARRANT CERTIFICATE MAY NOT BE EXERCISED UNTIL THE FIFTH BUSINESS DAY FOLLOWING THE DATE A REGISTRATION STATEMENT IN RESPECT OF THE SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS FILED PURSUANT TO THE U.S. SECURITIES ACT IS DECLARED EFFECTIVE BY THE U.S. SECURITIES AND EXCHANGE COMMISSION.

WARRANT CERTIFICATE

MICROCELL TELECOMMUNICATIONS INC.
(incorporated under the laws of Canada)

CERTIFICATE NUMBER 2008 Warrants
(each Warrant entitling the Holder thereof to acquire, subject to adjustment, one Class A Restricted Voting Share or one Class B Non-Voting Share)

THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE EXERCISED BY ANY PERSON OTHER THAN THE REGISTERED HOLDER HEREOF.

THE WARRANTS REPRESENTED HEREBY WILL BE VOID AFTER THE EXPIRY TIME PURSUANT TO THE TERMS OF THE WARRANT INDENTURE (AS DESCRIBED BELOW). DO NOT DESTROY THIS CERTIFICATE.

               THIS IS TO CERTIFY that, for value received,

               [Insert name and address of Holder here]

(herein called the “Warrantholder” or “Holder”) is the registered holder of the number of warrants (the “Warrants”) specified above of Microcell Telecommunications Inc. (the “Corporation”), each Warrant entitling the Holder to subscribe for one fully paid Class A Restricted Voting Share or one fully paid Class B Non-Voting Share, as the case may be (in each case, a “Share”) of the Corporation, upon payment of an exercise price of Cdn.$20.69 per Warrant and completion of other formalities set forth herein for the exercise of Warrants, at any time after the U.S. Registration Date (as defined in the Indenture (as

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defined below)) but on or before the Expiry Time (as defined in the Indenture) and on the basis, subject to adjustment, of one Share for each Warrant.

     The Warrants represented by this certificate are issued under and pursuant to a certain warrant indenture (herein called the “Warrant Indenture” or “Indenture”) made as of May 1, 2003 between the Corporation and Computershare Trust Company of Canada, as Trustee (“Trustee”), to which Indenture and any instruments supplemental or ancillary thereto or in amendment thereof reference is hereby made for a full description of the rights of the Holders of the Warrants and the terms and conditions upon which such Warrants are, or are to be, issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental or ancillary thereto or in amendment thereof were herein set forth, to all of which provisions the Holder of these Warrants by acceptance hereof assents.

     Unless otherwise defined herein, all terms defined in the Indenture are used herein as so defined. In the event of any conflict or inconsistency between the provisions of the Indenture and the provisions of this Warrant Certificate, the provisions of the Indenture shall prevail. The Trustee will furnish to the Holder of this Warrant Certificate, upon request and upon payment of reasonable photocopying and delivery charges, a copy of the Indenture.

     Exercise Period

     The Warrants represented by this Warrant Certificate may be exercised by the Holder (including, if applicable, any agent under any power of attorney granted by such Holder) at any time after the U.S. Registration Date but on or before the Expiry Time.

     Effect of Exercise of Warrants

     A Warrantholder may, at any time after the U.S. Registration Date but on or before the Expiry Time, exercise all or any number of the then outstanding Warrants held by it, by surrendering this Warrant Certificate to the Trustee at its principal corporate actions trust office in Toronto, or to any other person or at any other place designated by the Corporation with the approval of the Trustee, during normal business hours on a Business Day at such place, with a duly completed and executed notice of exercise in the form set forth herein accompanied by duly executed Residency Declaration(s) for the person or persons to whom Shares shall be issued and payment of the Exercise Price in respect of the Warrants so exercised. A Warrantholder which fails to provide a duly completed and executed Residency Declaration shall be deemed non-Canadian. Upon exercise, Canadian Warrantholders shall be entitled to be issued Class A Shares and non-Canadian Warrantholders shall be entitled to be issued Class B Shares.

     Surrender of this Warrant Certificate will be deemed to have been effected only on personal delivery thereof to, or, if sent by mail or other means of transmission, on actual receipt thereof by, the Trustee at its principal corporate actions trust office in Toronto, or to such other person or at such other place as provided in the Indenture.

     Any notice of exercise in the form set forth herein must be signed by the Warrantholder, or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner

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satisfactory to the Trustee, acting reasonably, and, if any Shares thereby issuable are to be issued to a person or persons other than the Warrantholder, must specify the name or names and the address or addresses of each such person or persons and the number of Shares to be issued to each such person if more than one is so specified and be accompanied by the Residency Declaration(s) of such person(s).

     The Holder may in certain circumstances exercise less than all of the Warrants evidenced by this Warrant Certificate.

     Upon the exercise of any Warrants, the Shares thereby issuable shall be deemed to have been issued, and the person or persons to whom such Shares are to be issued shall be deemed to have become the Holder or Holders of record thereof, on the day on which this Warrant Certificate is surrendered in accordance with the terms of the Indenture (the “Exercise Date”), unless the transfer registers for the Shares are closed on that date, in which case such Shares shall be deemed to have been issued and such person or persons shall be deemed to have become the Holder or Holders of record thereof on the date on which such transfer registers are reopened, but such Shares shall be issued on the basis of the number of Shares to which such person or persons were entitled on the Exercise Date.

     As soon as reasonably practicable (and, in any event, within five (5) Business Days) after the surrender to the Trustee of the Warrant Certificates in accordance with the provisions of the Indenture, the Corporation shall, subject to certain exceptions set forth in the Indenture, cause the Trustee to mail to the person or persons in whose name or names the Shares thereby issued have been issued, at his or their respective addresses, or, if so specified, cause to be delivered to such person or persons at the place where the Warrant Certificates evidencing such Warrants were surrendered, certificates representing the Shares so issued.

     If any Shares issuable pursuant to any Warrants are to be issued to a person or persons other than the Warrantholder, the Warrantholder must pay to the Corporation or to the Trustee on its behalf an amount equal to all eligible transfer taxes or other government charges, and neither the Corporation nor the Trustee will be required to issue or deliver any certificates representing any such Shares unless or until such amount has been so paid or the Warrantholder has established to the satisfaction of the Corporation that such taxes and charges have been paid or that no such taxes or charges are owing.

     If at the time of exercise of the Warrants there remain trading restrictions on the Shares pursuant to applicable securities legislation, the Corporation or the Trustee may, upon the advice of counsel, endorse any Shares to such effect.

Warrants Void After Expiry Time

     After the Expiry Time, no Holder of a Warrant Certificate representing a Warrant which has not been validly exercised shall have any rights either under the Indenture or a Warrant, and the Warrants shall thereafter be void and of no value or effect.

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Other Provisions

     The Corporation will not be obligated to issue any fraction of Shares on the exercise of any Warrant. To the extent that any Warrant evidenced hereby confers the right to be issued a fraction of Shares, such Shares shall be rounded down to the nearest whole number without any compensation therefor.

     The Indenture provides for adjustments to the rights of the Holders of Warrants, including the number of Shares issuable upon the exercise thereof, on the happening of certain stated events, including the subdivision or consolidation of the outstanding Shares, certain distributions of Shares, or of securities convertible into or exchangeable for Shares or of other securities or assets of the Corporation, certain offerings of rights, warrants or options and certain capital reorganizations.

     The Indenture contains provisions making binding on all Holders of Warrants outstanding thereunder resolutions passed at meetings of such Holders held in accordance with such provisions and instruments in writing signed by Holders of a specified majority of all outstanding Warrants.

     On presentation at the principal corporate actions trust office of the Trustee in Toronto, subject to the provisions of the Indenture and on compliance with the reasonable requirements of the Trustee, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates of different denominations evidencing in the aggregate the same number of Warrants as the Warrant Certificate or Warrant Certificates being exchanged.

     The Warrants evidenced by this Warrant Certificate may only be transferred upon compliance with the conditions prescribed in the Indenture, on the register of transfers to be kept at the principal corporate actions trust office of the Trustee in Toronto, by the Holder or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee and, upon compliance with such requirements and such other reasonable requirements as the Trustee and the Corporation may prescribe, such transfer will be recorded on such register of transfers by the Trustee. Notwithstanding the foregoing, the Corporation will be entitled, and may direct the Trustee, to refuse to record any transfer of any Warrant on such register if such transfer would constitute a violation of the securities laws of any jurisdiction.

     The holding of this Warrant Certificate will not constitute the Holder a shareholder of the Corporation or entitle such Holder to any right or interest in respect thereof except as otherwise provided in the Indenture.

     This Warrant Certificate will not be valid for any purpose until it has been certified by or on behalf of the Trustee for the time being under the Indenture.

     Time is of the essence hereof.

     This Warrant Certificate will be construed in accordance with the laws of the Province of Quebec and of Canada applicable therein.

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     The parties hereby acknowledge that they have expressly required this Warrant Certificate and all notices and other documents required or permitted to be given or entered into pursuant hereto to be drawn up in the English language only. Les parties reconnaissent avoir expressément demandé que le présent certificat ainsi que tout avis et autre document à être ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.

     To exercise your rights hereunder, please complete and execute the notice of exercise attached hereto as Exhibit “1” and deliver this Warrant Certificate to the Trustee accompanied by duly executed Residency Declaration(s) for the person or persons to whom Shares shall be issued and payment of the Exercise Price in respect of the Warrants so exercised.

     IN WITNESS WHEREOF THE CORPORATION has caused this Warrant Certificate to be signed by its officer or other individual authorized in that behalf as of May 1, 2003.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Authorized Signing Officer

     This Warrant Certificate is one of the Warrant Certificates referred to in the Indenture.

COMPUTERSHARE TRUST COMPANY OF
CANADA, as Trustee

By:
	Authorized Signing Officer

Exhibit “1”

TO:

AND TO: MICROCELL TELECOMMUNICATIONS INC. (the “Corporation”)

COMPUTERSHARE TRUST COMPANY OF CANADA (the “Trustee”)

NOTICE OF EXERCISE

     The undersigned Holder of the Warrants evidenced by this Warrant Certificate hereby exercises the right of such Holder to be issued, and hereby subscribes for, the Shares that are issuable pursuant to the exercise of such Warrants on the terms specified in such Warrant Certificate and in the Indenture.

     The undersigned hereby acknowledges that the undersigned is aware that the Shares received on exercise may be subject to restrictions on resale under applicable securities legislation.

     The undersigned hereby irrevocably directs that the said Shares be issued, registered and delivered as follows:

Name(s) in Full and Social
Insurance Number(s)
(if applicable)


Address(es)


Number of Shares

Taxpayer Identification Number, if applicable:

     Please print full name in which certificates representing the Shares are to be issued. If any Shares are to be issued to a person or persons other than the Holder, the Holder must pay to the Trustee all exigible transfer taxes or other government charges. The signature of the Holder must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

     IF NOT EXERCISED ON OR PRIOR TO 5:00 P.M. (MONTREAL TIME) ON THE EXPIRY DATE (AS DEFINED IN THE WARRANT INDENTURE), THE WARRANTS EVIDENCED BY THIS CERTIFICATE WILL BE CANCELLED AND BECOME ABSOLUTELY VOID.

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     It is understood that the Corporation may require evidence to verify the foregoing representation.

    DATED this      day of                , 200  .

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Witness	)	Name of Registered Holder

[  ] Please check if the certificates representing the Shares are to be delivered at the office where this Warrant Certificate is surrendered, failing which such certificates will be mailed to the address set out above. Certificates will be delivered or mailed as soon as practicable after the surrender of this Warrant Certificate to the Trustee.

FORM OF TRANSFER

     FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to                                          (insert name and address of transferee) the Warrants represented by this Warrant Certificate and hereby appoints                 as its attorney with full power of substitution to transfer the Warrants on the appropriate register of the Trustee.

DATED this       day of                , 20     .

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Witness	)	Name of Transferor

The signature of the Transferor must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Trustee. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

Except as pursuant to alternative arrangements satisfactory to the Trustee and Microcell Telecommunications Inc., the signature of Transferor must be guaranteed by a Canadian chartered bank or a trust company or by a member firm of The Toronto Stock Exchange, any of whose signatures must be on file with the Trustee.

EX-2.5 9 m10142orexv2w5.htm EX-2.5

Exhibit 2.5

SHAREHOLDER RIGHTS PLAN

     THIS SHAREHOLDER RIGHTS PLAN AGREEMENT dated as of May 1, 2003 between Microcell Telecommunications Inc. (the “Corporation”), a corporation existing under the laws of Canada, and Computershare Trust Company of Canada, a trust company existing under the laws of Canada, as Rights Agent (the “Rights Agent”, which term shall include any successor Rights Agent hereunder).

     WITNESSES THAT:

     WHEREAS it is advisable and in the best interests of the Corporation to adopt and maintain a shareholder rights plan (the “Rights Plan”) in order to ensure, to the extent possible, that all shareholders of the Corporation will be treated equally and fairly in connection with any take-over offer for the Corporation; and

     WHEREAS in connection with the adoption of the Rights Plan:

(i)	the distribution of one Right has been authorized effective the Effective Date in respect of each New Instrument outstanding at the Effective Date; and
(ii)	the issuance of one Right in respect of each New Instrument issued after the Effective Date and prior to the earlier of the Separation Time and the Expiration Time has been authorized; and

     WHEREAS each Right entitles the holder thereof, after the Separation Time, to purchase shares pursuant to the terms and subject to the conditions set forth herein; and

     WHEREAS the Corporation has appointed the Rights Agent to act on behalf of the Corporation, and the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred to herein.

     NOW THEREFORE, in consideration of the foregoing premises and the respective covenants and agreements set forth herein, the parties hereby agree as follows:

ARTICLE I
INTERPRETATION

Section 1.1     Certain Definitions.

     For purposes of the Agreement, the following terms have the meanings indicated:

(a) “Acquiring Person” means, any Person who is the Beneficial Owner of the Prescribed Percentage or more of the outstanding New Instruments; provided, however, that the term “Acquiring Person” shall not include:

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(i)	the Corporation or any Subsidiary of the Corporation;
(ii)	any Person who becomes the Beneficial Owner of the Prescribed Percentage or more of the outstanding New Instruments as a result of (A) Corporate Acquisitions, (B) Permitted Bid Acquisitions, (C) Corporate Distributions, (D) Exempt Acquisitions, or (E) Convertible Security Acquisitions; provided, however, that if a Person shall become the Beneficial Owner of the Prescribed Percentage or more of the outstanding New Instruments by reason of one or more or any combination of the operation of a Corporate Acquisition, Permitted Bid Acquisition, Corporate Distribution, Exempt Acquisition or Convertible Security Acquisition and, after such Corporate Acquisition, Permitted Bid Acquisition, Corporate Distribution, Exempt Acquisition or Convertible Security Acquisition, becomes the Beneficial Owner of an additional one percent (1%) or more of the outstanding New Instruments (on a Fully Diluted Basis) other than pursuant to Corporate Acquisitions, Permitted Bid Acquisitions, Corporate Distributions, Exempt Acquisitions or Convertible Security Acquisitions, then as of the date of such acquisition, such Person shall become an Acquiring Person;
(iii)	for a period of 10 days after the Disqualification Date (as hereinafter defined), any Person who becomes the Beneficial Owner of the Prescribed Percentage or more of the outstanding New Instruments as a result of such Person becoming disqualified from relying on Clause 1.1(e)(C) hereof solely because such Person makes or proposes to make a Take-over Bid in respect of securities of the Corporation alone or by acting jointly or in concert with any other Person (the first date of public announcement (which, for the purposes of this definition, shall include, without limitation, a report filed pursuant to section 147.11 of the Securities Act) by such Person or the Corporation of a current intent to commence such a Take-over Bid being herein referred to as the “Disqualification Date”);
(iv)	an underwriter or member of a banking or selling group that becomes the Beneficial Owner of the Prescribed Percentage in connection with a distribution of securities (including, for greater certainty, by way of a private placement of such securities) to the public; and
(v)	a Person (a “Grandfathered Person”) who as at the Grandfathering Date would have been the Beneficial Owner of the Prescribed Percentage or more of the outstanding New Instruments determined as if the Plan Effectiveness Date was the Grandfathering Date; provided however that this exemption shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person, if the Plan Effectiveness Date was the Grandfathering Date, would have ceased to own the Prescribed Percentage or more of the outstanding New Instruments after the Grandfathering Date.

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(b)	“Affiliate” when used to indicate a relationship with a corporation, means a Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such corporation.
(c)	“Agreement” means this agreement as amended, modified or supplemented from time to time.
(d)	“Associate” when used to indicate a relationship with a specified Person, means any relative of such specified Person who has the same home as such specified Person, or any Person to whom such specified Person is married or with whom such specified Person is living in a conjugal relationship outside marriage, or any relative of such spouse or other Person who has the same home as such specified Person.
(e)	A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial Ownership” of, and to “Beneficially Own”:

(i)	any securities of which such Person or any Affiliate or Associate of such Person is the owner in law or equity;
(ii)	any securities as to which such Person or any of such Person’s Affiliates or Associates has the right to acquire (A) upon the exercise of any Convertible Securities, or (B) pursuant to any agreement, arrangement or understanding, if such right is exercisable immediately or within a period of 60 days thereafter whether or not on condition or the happening of any contingency (other than customary agreements with and between underwriters and banking group or selling group members with respect to a distribution of securities, pursuant to a pledge of securities in the ordinary course of business or as a result of the conversion rights attached to the Class B Shares contained in the Corporation’s articles for the purpose of allowing the Class B Shares to tender to an exclusionary bid); and
(iii)	any securities that are Beneficially Owned within the meaning of Section 1.1(e)(i) or (ii) hereof by any other Person with whom such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the “Beneficial Owner”, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any security as a result of the existence of any one or more of the following circumstances:
(A)	such security has been deposited or tendered pursuant to a Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other Person acting jointly or in concert with such Person, unless such deposited or tendered security has been taken up or paid for, whichever shall first occur;

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(B)

by reason of the holder of such security having agreed to deposit or tender such security to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person with whom such Person is acting jointly or in concert pursuant to a Permitted Lock-Up Agreement but only until such time as the securities are taken up and paid for under the Take-over Bid;

(C)

if (i) the ordinary business of such Person (the “Fund Manager”) includes the management of investment funds for others (which others may include or be limited to one or more employee benefit plans or pension plans) and/or includes the acquisition or holding of securities for a non-discretionary account of a Client (as defined below) by a dealer or broker registered under applicable securities laws to the extent required, and such security is held by the Fund Manager in the ordinary course of such business in the performance of such Fund Manager’s duties for the account of any other Person (a “Client”), (ii) such Person (the “Trust Company”) is licensed to carry on the business of a trust company under applicable law and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons or in relation to other accounts and holds such security in the ordinary course of such duties for the estate of any such deceased or incompetent Person (each an “Estate Account”) or for such other accounts (each an “Other Account”), (iii) such Person (the “Statutory Body”) is an independent Person established by statute for purposes that include, and the ordinary business or activity of such Person includes, the management of investment funds for employee benefit plans, pension plans, insurance plans of various public bodies and the Statutory Body holds such security for the purposes of its activities as such, (iv) the ordinary business of such Person includes acting as an agent of the Crown in the management of public assets (the “Crown Agent”), or (v) such Person is the administrator or the trustee of one or more pension funds or plans (each a “Pension Fund”) registered under the laws of Canada or any province thereof or the United States or any state thereof (the “Independent Person”), or is a Pension Fund and holds such securities for the purposes of its activities as an Independent Person or as a Pension Fund, and provided that such Person does not hold more than the Prescribed Percentage of the outstanding New Instruments; provided, however, that in any of the foregoing cases no one of the Fund Manager, the Trust Company, the Statutory Body, the Crown Agent, the Independent Person or the Pension Fund makes or announces a current intention to make a Take-over Bid in respect of securities of the Corporation alone or by acting jointly or in concert with any other Person (other than pursuant to a distribution by the Corporation or by means of ordinary market transactions (including prearranged trades entered into in the ordinary course of business of such Person) executed through the facilities of a stock exchange or organized over-the-counter market);

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(D)	such Person is a Client of the same Fund Manager as another Person on whose account the Fund Manager holds such security, or such Person is an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security, or such Person is a Pension Fund with the same Independent Person as another Pension Fund;
(E)	such Person is a Client of a Fund Manager and such security is owned at law or in equity by the Fund Manager, or such Person is an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company, or such Person is a Pension Fund and such security is owned at law or in equity by the Independent Person; or
(F)	such Person is a registered holder of securities as a result of carrying on the business of, or acting as a nominee of, a securities depository.

(f)	“Board of Directors” means, at any time, the duly constituted board of directors of the Corporation.
(g)	“Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in Montreal or Toronto are authorized or obligated by law to close.
(h)	“Canadian” means a Canadian within the meaning ascribed to such term in the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time.
(i)	“CBCA” means the Canada Business Corporations Act and the regulations thereunder, as amended from time to time.
(j)	“CCAA Plan” means the Plan of reorganization and of compromise and arrangement of Microcell Telecommunications Inc. (predecessor corporation to the Corporation) and certain of its subsidiaries under the Companies’ Creditors Arrangement Act (Canada) and the CBCA, as approved by sanction order of the Superior Court, Province of Quebec, dated March 18, 2003, as amended.
(k)	“Class A Shares” means the Class A Restricted Voting Shares in the capital of the Corporation.
(l)	“Class B Shares” means the Class B Non-Voting Shares in the capital of the Corporation.
(m)	“close of business” on any given date means the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the office of the transfer agent for the Class A Shares in the City of Montreal (or, after the Separation Time, the office of the Rights Agent in the City of Montreal) is closed to the public.

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(n)	“Competing Bid” means, a Take-over Bid that: (i) is made while another Permitted Bid is in existence, and (ii) satisfies all the components of the definition of a Permitted Bid, except that the requirements set out in Clause (ii) of the definition of a Permitted Bid shall be satisfied if the Take-over Bid shall contain, and the take up and payment for securities tendered or deposited thereunder shall be subject to, an irrevocable and unqualified condition that no New Instruments shall be taken up or paid for pursuant to the Competing Bid prior to the close of business on the date that is no earlier than the date which is the later of: (a) 35 days after the date the Competing Bid is made; and (b) the date on which New Instruments may be taken up under the earliest Permitted Bid that preceded the Competing Bid (determined at the date of making the Take-over Bid and assuming no amendment or variation of the terms and conditions of the Permitted Bid and satisfaction of all conditions to completion thereof).
(o)	“controlled”: a corporation is “controlled” by another Person if (i) securities entitled to vote in the election of directors carrying more than fifty percent (50%) of the votes for the election of directors are held, other than by way of security only, by or for the benefit of the other Person; and (ii) the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such corporation; and “controls”, “controlling” and “under common control with” shall be interpreted accordingly.
(p)	“Convertible Security” means at any time (i) any right (regardless of whether such right constitutes a security) to acquire New Instruments or other securities from the Corporation; and (ii) any securities issued by the Corporation from time to time (other than the Rights) carrying any exercise, conversion or exchange right; which is then exercisable or exercisable within a period of 60 days from that time, pursuant to which the holder thereof may acquire New Instruments or other securities which are convertible into or exercisable or exchangeable for New Instruments (in each case, whether such right is then exercisable or exercisable within a period of 60 days from that time and whether or not on condition or the happening of any contingency), provided that for greater certainty the Class B Shares shall not be considered Convertible Securities as a result of the conversion rights attached to such Class B Shares contained in the Corporation’s articles for the purpose of allowing the Class B Shares to tender to an exclusionary bid.
(q)	“Convertible Security Acquisition” means the acquisition of New Instruments upon the exercise of Convertible Securities received by a Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Corporate Distribution.
(r)	“Corporate Acquisition” means an acquisition by the Corporation or a Subsidiary of the Corporation or the redemption by the Corporation, or the cancellation by the Corporation as a result of any exercise of any conversion or exchange rights, of New Instruments which by reducing the number of New Instruments outstanding increases the proportionate number of New Instruments Beneficially Owned by any Person.

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(s) “Corporate Distribution” means an acquisition as a result of:

(i)

a stock dividend or a stock split or other event pursuant to which a Person receives or acquires New Instruments of a given type or class on the same pro rata basis as all other holders of New Instruments of the same type or class; or

(ii)

any other event pursuant to which all holders of New Instruments are entitled to receive New Instruments or Convertible Securities on a pro rata basis, including, without limiting the generality of the foregoing, pursuant to the receipt or exercise of rights issued by the Corporation and distributed to all the holders of a class of New Instruments to subscribe for or purchase any type or class of New Instruments or Convertible Securities of the Corporation, but excluding pursuant to a redemption of First Preferred Shares or Second Preferred Shares, as the case may be, in accordance with the Corporation’s articles in consideration of First Units or Second Units respectively, provided that such rights are acquired directly from the Corporation and not from any other Person.

(t)	“Disqualification Date” has the meaning ascribed thereto in Section 1.1(a)(iii) hereof.
(u)	“Dividend Reinvestment Plan” means a dividend reinvestment or other plan of the Corporation made available by the Corporation to holders of its securities where such plan permits the holder to direct that amounts receivable in respect of some or all of:

(i)	dividends paid in respect of any securities of the Corporation; or
(ii)	proceeds of redemption of securities of the Corporation;
be applied to the purchase from the Corporation of additional securities of the type or class of securities in respect of which such amounts relate.

(v)	“Effective Date” has the meaning ascribed thereto in Section 5.13 hereof.
(w)	“Election to Exercise” has the meaning ascribed thereto in Section 2.2(4) hereof.
(x)	“Exempt Acquisition” means an acquisition by any Person of New Instruments and/or Convertible Securities:

(i)	in respect of which the Board of Directors has waived the application of Section 3.1 hereof pursuant to the provisions of Section 5.1(2), Section 5.1(3) or Section 5.1(4) hereof;
(ii)	which was made pursuant to a Dividend Reinvestment Plan, pursuant to a distribution to the public by the Corporation of New Instruments or Convertible Securities made pursuant to a prospectus or pursuant to the

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	receipt or exercise of rights issued by the Corporation and distributed to all holders of a type or class of New Instruments to subscribe for or purchase any type or class of New Instruments or Convertible Securities (and provided such rights are acquired directly from the Corporation and not from any Person), provided that the Person in question does not thereby acquire a greater class percentage of New Instruments, or Convertible Securities representing the right to acquire New Instruments of such class, than the percentage of New Instruments of the class Beneficially Owned immediately prior to such acquisition;
(iii)	pursuant to an issuance and sale by the Corporation of New Instruments or Convertible Securities by way of a private placement by the Corporation, provided that (x) all necessary stock exchange approvals for such private placement have been obtained and such private placement complies with the terms and conditions of such approvals, and (y) the purchaser does not become the Beneficial Owner of more than 25% of the New Instruments outstanding immediately prior to the private placement (and in making this determination, the securities to be issued to such purchaser on the private placement shall be deemed to be held by such purchaser but shall not be included in the aggregate number of outstanding New Instruments immediately prior to the private placement); or
(iv)	pursuant to the exercise of any rights attached to Convertible Securities acquired pursuant to clauses (i) and (ii) above.

(y)	“Exercise Price” means, as of any date, the price at which a holder may purchase the securities issuable upon exercise of one whole Right, being the amount of $100.00, until adjustment thereof in accordance with the terms hereof.
(z)	“Expiration Time” means the earlier of: (i) the Termination Time, and (ii) the close of business on the third anniversary on the Effective Date, subject to approval of the holders of New Instruments at the Corporation’s annual meeting to be held in 2004.
(aa)	“First Instruments” means First Non-Voting Instruments and First Voting Instruments.
(bb)	“First Non-Voting Instruments” means (i) FPNV Shares or (ii) First Units which include FPNV2 Shares.
(cc)	“First Note” means a subordinated convertible 9% first note of the Corporation having the same terms and conditions as the First Preferred Shares (including as to the right to convert into Class A Shares or Class B Shares) and a term to maturity equal to the term to maturity of the First Preferred Shares (or remainder thereof, as the case may be).

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(dd)	“First Preferred Shares” means first preferred shares in the capital of the Corporation.
(ee)	“First Unit” means a unit consisting of a First Note together with one FPV2 Share or one FPNV2 Share, as the case may be.
(ff)	“First Voting Instruments” means (i) FPV Shares or (ii) First Units which include FPV2 Shares.
(gg)	“Flip-in Event” means a transaction or series of transactions in or pursuant to which any Person becomes an Acquiring Person.
(hh)	“FPNV Shares” means a series of non-voting First Preferred Shares as provided in the Articles of the Corporation.
(ii)	“FPNV2 Shares” means a series of non-voting and non-dividend bearing First Preferred Shares as provided in the Articles of the Corporation.
(jj)	“FPV Shares” means a series of voting First Preferred Shares as provided in the Articles of the Corporation.
(kk)	“FPV2 Shares” means a series of voting and non-dividend bearing First Preferred Shares as provided in the Articles of the Corporation.
(ll)	“Fully Diluted Basis” in respect of New Instruments means the New Instruments considered as a single class and on a fully diluted basis, assuming conversion of all First Instruments and Second Instruments, without giving effect to options granted under the Stock Option Plan, Shares issued under the Stock Purchase Plan or any exercise of Warrants.
(mm)	“Grandfathering Date” means the close of business on December 9, 2002.
(nn)	“Independent Holders” means holders of New Instruments, but shall not include any Acquiring Person or any Offeror, or any Affiliate or Associate of such Acquiring Person or such Offeror, or any Person acting jointly or in concert with such Acquiring Person or such Offeror, or any employee benefit plan, stock purchase plan, deferred profit sharing plan or any similar plan or trust for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of any such plan or trust direct the manner in which the New Instruments are to be voted or direct whether the New Instruments are to be tendered to a Take-over Bid, and shall include any Person referred to in Section 1.1(e)(iii) hereof (other than any Person who pursuant to Section 1.1(e) is deemed not to Beneficially Own the New Instruments) that has not made or announced a current intention to make a Take-Over Bid.
(oo)	“Market Price” per security of any securities on any date of determination means the average of the daily closing prices per security of such securities (determined as described below) on each of the 20 consecutive Trading Days through and

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	including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused the closing prices used to determine the Market Price on any Trading Days not to be fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The closing price per security of any securities on any date shall be (i) the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for each security as reported by The Toronto Stock Exchange, or (ii) if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on The Toronto Stock Exchange, the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for each security as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the securities exchange on which the securities are primarily traded, or (iii) if not so listed, the last quoted price, or if not so quoted, the average of the high bid and low asked prices for each security of such securities in the over-the-counter market, or (iv) if on any such date the securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected in good faith by the Board of Directors; provided, however, that if on any such date the securities are not traded in the over-the-counter market, the closing price per security of such securities on such date shall mean the fair value per instrument of such securities on such date as determined in good faith by a nationally or internationally recognized investment dealer or investment banker.
(pp)	“New Instruments” means the First Instruments, Second Instruments, Class A Shares and Class B Shares or any one or more of them, as the context may require.
(qq)	“Offer to Acquire” shall include (i) an offer to purchase, a public announcement of an intention to make an offer to purchase, or a solicitation of an offer to sell; and (ii) an acceptance of an offer to sell, whether or not such offer to sell has been solicited or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell.
(rr)	“Offeror” means a Person who has announced a current intention to make, or who makes and has outstanding, a Take-over Bid.
(ss)	“Offeror’s Securities” means New Instruments Beneficially Owned by an Offeror, any Affiliate or Associate of such Offeror, or any Person acting jointly or in concert with the Offeror.

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(tt) “Permitted Bid” means a Take-over Bid that is made by means of a Take-over Bid circular and which also complies with the following additional provisions:

(i)	the Take-over Bid shall be made to all registered holders of New Instruments (other than Offeror’s Securities);
(ii)	the Take-over Bid shall contain, and the take up and payment for securities tendered or deposited thereunder shall be subject to, an irrevocable and unqualified condition that (A) no New Instruments shall be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than sixty (60) days following the date of the Take-over Bid and (B) no New Instruments shall be taken up or paid for pursuant to the Take-over Bid unless, at such date, more than fifty percent (50%) of the aggregate then outstanding New Instruments held by Independent Holders have been deposited to the Take-over Bid and not withdrawn;
(iii)	the Take-over Bid shall contain an irrevocable and unqualified provision that, unless the Take-over Bid is withdrawn, New Instruments may be deposited pursuant to such Take-over Bid at any time during the period of time described in Clause (ii) of this Section 1.1(tt) and that any New Instruments deposited pursuant to the Take-over Bid may be withdrawn at any time until taken up and paid for; and
(iv)	the Take-over Bid shall contain an irrevocable and unqualified provision that should the condition referred to in Clause (ii) of this Section 1.1(tt) be met: (A) the Offeror will make a public announcement of that fact on the date the Take-over Bid would otherwise expire; and (B) the Take-over Bid will be extended for a period of not less than 10 Business Days from the date it would otherwise expire.

(uu)

“Permitted Bid Acquisitions” means share acquisitions made pursuant to a Permitted Bid or a Competing Bid.

(vv)

“Permitted Lock-Up Agreement” means an agreement between a Person and one or more holders (each a “Locked-up Person”) of New Instruments or Convertible Securities (the terms of which are publicly disclosed and a copy of which is made available to the public (including the Corporation) not later than the date the Lock-Up Bid (as defined below) is publicly announced or, if the agreement was entered into after the date of the Lock-Up Bid, not later than the date the agreement was entered into), pursuant to which such Locked-up Persons agree to deposit or tender New Instruments or Convertible Securities to a Take-over Bid (the “Lock-up Bid”) made by the Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iii) of the definition of Beneficial Owner and where the agreement:

(i) (A) permits the Locked-up Person to withdraw New Instruments or Convertible Securities in order to tender or deposit New

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Instruments or Convertible Securities to another Take-over Bid (or terminate the agreement in order to support another transaction) that represents an offering price for each New Instrument or Convertible Security that exceeds, or provides a value for each New Instrument or Convertible Security that is greater than, the offering price or value contained or proposed to be contained in the Lock-up Bid, provided that the other Take-over Bid or transaction is made for at least the same number of New Instruments or Convertible Securities as the Lock-up Bid; or

(B)

permits the Locked-up Person to withdraw New Instruments or Convertible Securities in order to tender or deposit the New Instruments or Convertible Securities to another Take-over Bid (or terminate the agreement in order to support another transaction) that represents an offering price for each New Instrument or Convertible Security that exceeds, or provides a value for each New Instrument or Convertible Security that is greater than, the offering price represented in or proposed to be represented in, the Lock-up Bid by as much or more than a specified amount (the “Specified Amount”) and the Specified Amount is not greater than 7% of the offering price that is contained in the Lock-up Bid, provided that the other Take-over Bid or transaction is made for at least the same number of each type or class of each type or class of New Instruments or Convertible Securities as the Lock-up Bid; and

(ii) provides that no “break-up” fees, “top-up” fees, penalties, payments, expenses or other amounts that exceed in the aggregate the greater of (A) the cash equivalent of 2.5% of the price or value payable under the Lock-up Bid to the Locked-up Person and (B) 50% of the amount by which the price or value payable under another Take-over Bid or another transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lock-up Bid, shall be payable by such Locked-up Person pursuant to the agreement in the event that the Lock-up Bid is not successfully concluded or if any Locked-up Person withdraws or fails to tender New Instruments or Convertible Securities pursuant thereto, and that any such amounts shall only be payable following the actual receipt by the Locked-up Person of consideration under another Take-over Bid or another transaction;

and, for greater certainty, the agreement may contain a right of first refusal or require a period of delay to give the Offeror an opportunity to at least match a higher consideration in another Take-over Bid or another transaction or contain any other similar limitation on a Locked-up Person’s right to withdraw New Instruments or Convertible Securities from the agreement, so long as any such limitation does not preclude the exercise by the Locked-up Person of the right to

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withdraw New Instruments or Convertible Securities in sufficient time to tender to the other Take-over Bid or to support the other transaction

(ww)	“Person” means any individual, firm, partnership, association, trust, trustee, executor, administrator, legal or personal representative, government, governmental body, entity or authority, group, body corporate, corporation, unincorporated organization or association, syndicate, joint venture or any other entity, whether or not having legal personality, and any of the foregoing in any derivative, representative or fiduciary capacity and pronouns have a similar extended meaning.
(xx)	“Plan Effectiveness Date” means May 1, 2003, the date of effectiveness of the CCAA Plan.
(yy)	“Prescribed Percentage” means either (i) 10% of the aggregate outstanding New Instruments or (ii) such higher percentage amount as may be determined by the Corporation from time to time pursuant to Section 5.4(1), considered on a Fully Diluted Basis.
(zz)	“Redemption Price” has the meaning ascribed thereto in Section 5.1(1) hereof.
(aaa)	“regular periodic cash dividends” means cash dividends paid at regular intervals in any fiscal year of the Corporation to the extent that such cash dividends do not exceed, in the aggregate, the greatest of:

(i)	200% of the aggregate amount of cash dividends declared payable by the Corporation on its Class A Shares and Class B Shares in its immediately preceding fiscal year; and
(ii)	100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for its immediately preceding fiscal year.

(bbb)	“Right” means a right issued pursuant to this Agreement.
(ccc)	“Rights Certificate” has the meaning ascribed thereto in Section 2.2(3) hereof.
(ddd)	“Rights Register” has the meaning ascribed thereto in Section 2.6(1) hereof.
(eee)	“Second Instruments” means Second Voting Instruments and Second Non-Voting Instruments.
(fff)	“Second Non-Voting Instruments” means (i) SPNV Shares or (ii) Second Units which include SPNV2 Shares.
(ggg)	“Second Note” means a subordinated convertible 9% second note of the Corporation having the same terms and conditions as the Second Preferred Shares (including as to the right to convert into Class A Shares or Class B Shares)

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	and a term to maturity equal to the term to maturity of the Second Preferred Shares (or remainder thereof, as the case may be).
(hhh)	“Second Preferred Shares” means second preferred shares in the capital of the Corporation.
(iii)	“Second Unit” means a unit consisting of a Second Note together with one SPV2 Share or one SPNV2 Share, as the case may be.
(jjj)	“Second Voting Instruments” means (i) SPV Shares or (ii) Second Units which include SPV2 Shares.
(kkk)	“Securities Act” means the Securities Act (Quebec), and the regulations and rules thereunder, and any comparable or successor laws, regulations and rules thereto.
(lll)	“Separation Time” means the close of business on the tenth (10th) Trading Day after the earlier of (i) the Stock Acquisition Date, (ii) the date of the commencement of, or first public announcement of the intent of any Person (other than the Corporation or any Subsidiary of the Corporation) to commence, a Take-over Bid (other than a Permitted Bid or Competing Bid) and (iii) the date on which a Permitted Bid or Competing Bid ceases to qualify as such, or such later date as may be determined by the Board of Directors, provided that, if any Take-over Bid referred to in Clause (ii) of this Section 1.1(lll) or any Permitted Bid or Competing Bid referred to in Clause (iii) of this Section 1.1(lll) expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid, Permitted Bid or Competing Bid, as the case may be, shall be deemed, for the purposes of this Section 1.1(lll), never to have been made and provided further that if the Board of Directors determines pursuant to Sections 5.1(2), 5.1(3) or 5.1(4) hereof to waive the application of Section 3.1 hereof to a Flip-in Event, the Separation Time in respect of such Flip-in Event shall be deemed never to have occurred.
(mmm)	“SPNV Shares” means a series of non-voting Second Preferred Shares as provided in the Articles of the Corporation.
(nnn)	“SPNV2 Shares” means a series of non-voting and non-dividend bearing Second Preferred Shares as provided in the Articles of the Corporation.
(ooo)	“SPV Shares” means a series of voting Second Preferred Shares as provided in the Articles of the Corporation.
(ppp)	“SPV2 Shares” means a series of voting and non-dividend bearing Second Preferred Shares as provided in the Articles of the Corporation.
(qqq)	“Shares” means any of the Class A Shares or the Class B Shares.
(rrr)	“Stock Acquisition Date” means the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed

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	pursuant to section 147.11 of the Securities Act) by the Corporation or an Offeror or Acquiring Person of facts indicating that a Person has become an Acquiring Person.
(sss)	“Stock Option Plan” means the certain Stock Option Plan of the Corporation dated the Plan Effectiveness Date.
(ttt)	“Stock Purchase Plan” means the certain Stock Purchase Plan of the Corporation dated the Plan Effectiveness Date.
(uuu)	“Subsidiary”: a corporation shall be deemed to be a Subsidiary of another corporation if (i) it is controlled by (A) that other; (B) that other and one or more corporations each of which is controlled by that other; or (C) two or more corporations each of which is controlled by that other; or (ii) it is a Subsidiary of a corporation that is that other’s Subsidiary.
(vvv)	“Take-over Bid” means an Offer to Acquire New Instruments or Convertible Securities where the New Instruments or Convertible Securities subject to the Offer to Acquire, together with the New Instruments into which the Convertible Securities subject to the Offer to Acquire are convertible, exchangeable or exercisable, and the Offeror’s Securities, constitute in the aggregate the Prescribed Percentage or more of the outstanding New Instruments on a Fully Diluted Basis.
(www)	“Termination Time” means the time at which the right to exercise Rights shall terminate pursuant to Section 5.1(1), Section 5.1(5) or Section 5.1(8) hereof.
(xxx)	“Trading Day”, when used with respect to any securities, means a day on which the principal Canadian stock exchange or market on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian stock exchange or market, a Business Day.
(yyy)	“Warrants” means, collectively, the 2005 warrants and 2008 warrants of the Corporation issued pursuant to the certain Warrant Indentures respectively dated May 1, 2003 between Computershare Trust Company of Canada and the Corporation.

Section 1.2     Currency.

     All sums of money which are referred to in this Agreement are expressed in lawful money of Canada, unless otherwise specified.

Section 1.3     Headings.

     The division of this Agreement into Articles, Sections and Clauses and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

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Section 1.4     Number and Gender.

     Wherever the context so requires, terms used herein importing the singular number only shall include the plural and vice-versa and words importing only one gender shall include all others.

Section 1.5     Acting Jointly or in Concert.

     For the purposes of this Agreement, a Person is acting jointly or in concert with every Person who is a party to an agreement, commitment or understanding, whether formal or informal, with the first Person or any Associate or Affiliate of the second Person to acquire or make an Offer to Acquire New Instruments (other than customary agreements with and between underwriters or banking group members or selling group members with respect to a distribution of securities or to a pledge of securities in the ordinary course of business).

Section 1.6     Statutory References.

     Unless the context otherwise requires or except as expressly provided herein, any reference herein to a specific part, section, clause or Rule of any statute or regulation shall be deemed to refer to the same as it may be amended, re-enacted or replaced or, if repealed and there shall be no replacement therefore, to the same as it is in effect on the date of this Agreement.

Section 1.7     Calculation of certain percentages.

     For purposes of this Agreement, the percentage of the outstanding New Instruments Beneficially Owned by any Person shall be and be deemed to be the product of one hundred (100) and the number of which the numerator is the sum of the number of New Instruments Beneficially Owned by such Person (on a Fully Diluted Basis) and the denominator is the number of New Instruments then outstanding (on a Fully Diluted Basis).

ARTICLE II
THE RIGHTS

Section 2.1     Legend on Share Certificates.

(1) Certificates issued for New Instruments after the Effective Date but prior to the close of business on the earlier of the Separation Time and the Expiration Time shall evidence one Right for each New Instrument represented thereby and, commencing as soon as reasonably practicable after the Effective Date, shall have impressed on, printed on, written on or otherwise affixed to them, a legend in substantially the following form:

(a) Until the Separation Time (as defined in the Rights Plan referred to below), this certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Shareholder Rights Plan Agreement, dated May 1, 2003, as amended and restated from time to time (the “Rights Plan”), between Microcell Telecommunications Inc. (the “Corporation”) and Computershare Trust Company of Canada, as rights agent (the “Rights Agent”), the terms of which are

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hereby incorporated herein by reference and a copy of which is on file at the principal executive office of the Corporation. Under certain circumstances, as set forth in the Rights Plan, such Rights may be amended or redeemed, may expire, may become null and void (if, in certain cases, they are issued to or “Beneficially Owned” by any Person who is, was or becomes an “Acquiring Person”, as such terms are defined in the Rights Plan, whether currently held by or on behalf of such Person or any subsequent holder) or may be evidenced by separate certificates and may no longer be evidenced by this certificate.

(b)

The Corporation will mail or arrange for the mailing of a copy of the Rights Plan to the holder of this certificate without charge upon receipt of a written request therefor.

(2) Until the earlier of the Separation Time and the Expiration Time, certificates representing New Instruments that are issued and outstanding at the Effective Date shall evidence one Right for each New Instrument evidenced thereby notwithstanding the absence of the foregoing legend. Following the Separation Time, Rights will be evidenced by Rights certificates issued pursuant to Section 2.2 hereof.

Section 2.2     Initial Exercise Price; Exercise of Rights; Detachment of Rights.

(1)	Right to entitle holder to purchase one Share prior to adjustment. Subject to adjustment as herein set forth and subject to Section 3.1(1) hereof, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price as at the Business Day immediately preceding the date of exercise of the Right, one Share (which price and number of Shares are subject to adjustment as set forth below and are subject to Section 3.1(1) hereof). Notwithstanding any other provision of this Agreement, any Rights held by the Corporation and any of its Subsidiaries shall be void. Holders of Rights shall receive Class A Shares if Canadian and Class B Shares if non-Canadian; the Corporation may, for such purpose, request that each such holder furnish the Corporation with a residency declaration attesting whether it is or is not Canadian.
(2)	Rights not exercisable until Separation Time. Until the Separation Time, (i) the Rights shall not be exercisable and no Right may be exercised, and (ii) for administrative purposes each Right will be evidenced by the certificates for the associated New Instruments registered in the names of the holders thereof (which certificates shall also be deemed to be Rights Certificates) and will be transferable only together with, and will be transferred by a transfer of, such associated New Instruments.
(3)	Delivery of Rights Certificate and disclosure statement. From and after the Separation Time and prior to the Expiration Time, (i) the Rights shall be exercisable, and (ii) the registration and transfer of the Rights shall be separate from, and independent of, New Instruments. Promptly following the Separation Time, the Corporation will prepare and the Rights Agent will mail to each holder of record of Rights as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)) at such holder’s address as shown by the

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	records of the Corporation (the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose), (A) a certificate (a “Rights Certificate”) in substantially the form of Schedule 2.2(3) hereto (subject to Section 2.2(8)) appropriately completed, representing the number and type of Rights held by such holder at the Separation Time, and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule, regulation or judicial or administrative order or with any rule or regulation made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage, and (B) a disclosure statement describing the Rights, provided that a Nominee shall be sent the materials provided for in (A) and (B) in respect of all New Instruments held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Corporation to determine whether any Person is holding New Instruments which are Beneficially Owned by another Person, the Corporation may require such first mentioned Person to furnish it with such information and documentation as the Corporation considers advisable.
(4)	Exercise of Rights. Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent the Rights Certificate evidencing such Rights together with an election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate duly completed and executed, accompanied by payment by certified cheque, banker’s draft or money order payable to the order of the Corporation, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for New Instruments in a name other than that of the holder of the Rights being exercised, all of the above to be received before the Expiration Time by the Rights Agent at its principal office in any of the cities listed on the Rights Certificate.
(5)	Duties of Rights Agent upon receipt of Election to Exercise. Upon receipt of a Rights Certificate, which is accompanied by (i) a completed and duly executed Election to Exercise, and (ii) payment as set forth in Section 2.2(4) above, the Rights Agent (unless otherwise instructed by the Corporation) will thereupon promptly:

(a)	requisition from the transfer agent for the Share certificates representing the number of Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent to comply with all such requisitions);
(b)	when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Shares;
(c)	after receipt of such certificates, deliver the same to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such registered holder;

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(d)	when appropriate, after receipt, deliver such cash (less any amounts required to be withheld) to or to the order of the registered holder of the Rights Certificate; and
(e)	tender to the Corporation all payments received on exercise of the Rights.

(6)	Partial Exercise of Rights. In case the holder of any Rights shall exercise less than all of the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns.
(7)	Duties of the Corporation. The Corporation covenants and agrees that it will:

(a)	take all such action as may be necessary and within its power to ensure that all Shares or other securities delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable;
(b)	take all such action as may be necessary and within its power to ensure compliance with the provisions of Section 3.1 hereof including, without limitation, all such action to comply with any applicable requirements of the CBCA, the Securities Act and any applicable comparable securities legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Shares or other securities upon exercise of Rights;
(c)	use reasonable efforts to cause, from and after such time as the Rights become exercisable, all Shares issued upon exercise of Rights to be listed upon issuance on the principal stock exchange on which the Shares were traded prior to the Stock Acquisition Date;
(d)	cause to be reserved and kept available out of its authorized and unissued Shares, the number of Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights;
(e)	pay when due and payable any and all Canadian federal and provincial transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Corporation to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for shares or other securities in a name other than that of the registered holder of the Rights being transferred or exercised; and
(f)	after the Separation Time, except as permitted by Sections 5.1 or 5.4 hereof, not take (or permit any Subsidiary to take) any action if at the time such action is

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taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

(8) Classes of New Instruments. Subject to Sections 2.3 and 3.1(1), a Right issued to a holder of a New Instrument shall represent the right to acquire one (1) Class A Share per New Instrument or one (1) Class B Share per New Instrument (as the case may be, based on whether such holder is Canadian or non-Canadian on the date of exercise of the Right in accordance with Section 2.2(4)). In the event that a New Instrument is redeemed or is purchased for cancellation prior to the Separation Time, its accompanying Right shall be deemed to have been purchased for cancellation.

Section 2.3 Adjustments to Exercise Price; Number of Rights.

          The Exercise Price, the number and kind of Shares or other securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3:

(a) Adjustment to Exercise Price upon changes to share capital. In the event the Corporation shall at any time after the Effective Date:

(i)	declare or pay a dividend on the New Instruments payable in Shares (or other securities exchangeable for or convertible into or giving a right to acquire Shares or other securities) other than the issue of Shares or such exchangeable or convertible securities to holders of New Instruments in lieu of but not in an amount which exceeds the value of regular periodic cash dividends;
(ii)	subdivide or change the outstanding Shares into a greater number of Shares;
(iii)	combine or change the outstanding Shares into a smaller number of Shares; or
(iv)	issue any Shares (or other securities exchangeable for or convertible into or giving a right to acquire Shares or other securities) in respect of, in lieu of or in exchange for existing Shares, except as otherwise provided in this Section 2.3;
the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of Shares, or other securities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of Shares or other securities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Share transfer books of the Corporation were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination

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or reclassification. If an event occurs which would require an adjustment under both this Section 2.3 and Section 3.1 hereof, the adjustment provided for in this Section 2.3 shall be in addition to and, shall be made prior to, any adjustment required pursuant to Section 3.1 hereof.

(b)

Adjustment to Exercise Price upon issue of rights, options and warrants. In case the Corporation shall at any time after the Effective Date fix a record date for the issuance of rights, options or warrants to all holders of New Instruments entitling them (for a period expiring within forty five (45) calendar days after such record date) to subscribe for or purchase Shares (or instruments having the same rights, privileges and preferences as Shares (“equivalent shares”)) or securities convertible into or exchangeable for or carrying a right to purchase Shares or equivalent shares at a price per Share or per equivalent share (or having a conversion price or exchange price or exercise price per share, if a security convertible into or exchangeable for or carrying a right to purchase Shares or equivalent shares) less than ninety percent (90%) of the Market Price per Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Shares outstanding on such record date, plus the number of Shares that the aggregate offering price of the total number of Shares and/or equivalent shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the convertible or exchangeable securities or rights so to be offered, including the price required to be paid to purchase such convertible or exchangeable securities or rights so to be offered) would purchase at such Market Price per Share, and the denominator of which shall be the number of Shares outstanding on such record date, plus the number of additional Shares and/or equivalent shares to be offered for subscription or purchase (or into which the convertible or exchangeable securities are initially convertible, exchangeable or exercisable). In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a certificate filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Such adjustment shall be made successively whenever such a record date is fixed and, in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.

For purposes of this Agreement, the granting of the right to purchase Shares (whether from the Corporation or otherwise) pursuant to any dividend or interest reinvestment plan and/or any Share purchase plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and/or the investment of periodic optional payments and/or employee benefit, stock option or similar plans (so long as such right to purchase is in no case evidenced by the delivery of rights or warrants) shall not be deemed to constitute an issue of rights, options or warrants by the Corporation; provided, however,

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	that, in the case of any dividend or interest reinvestment plan, the right to purchase Shares is at a price per instrument of not less than ninety percent (90%) of the current market price per share (determined as provided in such plans) of the Shares.
(c)	Adjustment to Exercise Price upon Corporate Distributions. In case the Corporation shall at any time after the Effective Date fix a record date for a distribution to all holders of Shares (including any such distribution made in connection with a merger, amalgamation, arrangement, plan, compromise or reorganization in which the Corporation is the continuing or successor Corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend or a regular periodic cash dividend paid in Shares, but including any dividend payable in securities other than Shares), assets or subscription rights, options or warrants (excluding those referred to in Section 2.3(b) above), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Market Price per Share on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to a Share and the denominator of which shall be such Market Price per Share. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price which would have been in effect if such record date had not been fixed.
(d)	De minimis threshold for adjustment to Exercise Price. Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Exercise Price; provided, however, that any adjustments which by reason of this Section 2.3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 2.3 shall be made to the nearest cent or to the nearest one-hundredth of a Share or other share, as the case may be. Notwithstanding the first sentence of this Section 2.3(d), any adjustment required by this Section 2.3 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment or (ii) the Expiration Time.
(e)	Corporation may provide for alternate means of adjustment. Subject to the prior consent of the holders of New Instruments or Rights obtained as set forth in Section 5.4(2) or (3) hereof, as applicable, in the event the Corporation shall at any time after the Effective Date issue any shares of capital stock (other than Shares), or rights or warrants to subscribe for or purchase any such capital stock, or securities convertible into or exchangeable for any such capital stock, in a transaction referred to in Sections 2.3(a)(i) or (a)(iv) or 2.3(b) or (c) above, if the Board of Directors acting in good faith determines that the adjustments

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	contemplated by Sections 2.3(a), (b) and (e) above in connection with such transaction will not appropriately protect the interests of the holders of Rights, the Corporation shall be entitled to determine what other adjustments to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding Sections 2.3(a), (b) and (c) above, such adjustments, rather than the adjustments contemplated by Sections 2.3(a), (b) and (c) above, shall be made. The Corporation and the Rights Agent shall amend this Agreement as appropriate to provide for such adjustments.
(f)	Adjustment to Rights exercisable into shares other than Shares. If as a result of an adjustment made pursuant to Section 3.1 hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares other than Shares, thereafter the number of such other shares so receivable upon exercise of any Right and the Exercise Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Shares contained in Sections 2.3(a), (b), (c), (d), (e), (g),(i),(j),(k) and (l) above and below, as the case may be, and the provisions of this Agreement with respect to the Shares shall apply on like terms to any such other shares.
(g)	Rights to evidence right to purchase Shares at adjusted Exercise Price. Each Right originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Shares purchasable from time to time hereunder upon exercise of such Right, all subject to further adjustment as provided herein.
(h)	Adjustment to number of Shares purchasable upon adjustment to Exercise Price. Unless the Corporation shall have exercised its election as provided in Section 2.3(i) below, upon each adjustment of the Exercise Price as a result of the calculations made in Sections 2.3(b) and (c) above, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Shares (calculated to the nearest one ten-thousandth) obtained by (A) multiplying (x) the number of shares purchasable upon exercise of a Right immediately prior to this adjustment by (y) the Exercise Price in effect immediately prior to such adjustment of the Exercise Price, and (B) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price.
(i)	Election to adjust number of Rights upon adjustment to Exercise Price. The Corporation shall be entitled to elect on or after the date of any adjustment of the Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number of Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of Shares for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the

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	number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of the Exercise Price. The Corporation shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Exercise Price is adjusted or any day thereafter but, if Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment, of the number of Rights pursuant to this Section 2.3(i), the Corporation shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 5.5 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, new Rights Certificates evidencing all the Rights to which such holders shall he entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and may bear, at the option of the Corporation, the adjusted Exercise Price and shall be registered in the names of the holders of record of Rights Certificates on the record date for the adjustment specified in the public announcement.
(j)	Rights Certificates may contain Exercise Price before adjustment. Irrespective of any adjustment or change in the Exercise Price or the number of Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per share and the number of shares which were expressed in the initial Rights Certificates issued hereunder.
(k)	Corporation may in certain cases defer issues of securities. In any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.
(l)	Corporation has discretion to reduce Exercise Price for tax reasons. Notwithstanding anything in this Section 2.3 to the contrary, the Corporation

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shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment, the Board of Directors shall determine to be advisable in order that any (A) consolidation or subdivision of the Shares, (B) issuance of any Shares at less than the Market Price, (C) issuance of securities convertible into or exchangeable for Shares, (D) stock dividends or (E) issuance of rights, options or warrants, referred to in this Section 2.3 hereafter made by the Corporation to holders of its Shares, shall not be taxable to such shareholders.

Section 2.4     Date on Which Exercise is Effective.

     Each Person in whose name any certificate for Shares is issued upon the exercise of Rights, shall for all purposes be deemed to have become the holder of record of the Shares represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Share transfer books of the Corporation are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Share transfer books of the Corporation are open.

Section 2.5     Execution, Authentication, Delivery and Dating of Rights Certificates.

(1)	The Rights Certificates shall be executed on behalf of the Corporation by its Chief Executive Officer, President or Vice-President, together with its Secretary. The signature of any of these officers on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersignature and delivery of such Rights Certificates.
(2)	Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent of such Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature and a disclosure statement as described in Section 2.2(3), and the Rights Agent shall manually or by facsimile signature countersign and send such Rights Certificates and disclosure statement to the holders of the Rights pursuant to Section 2.2(3) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.
(3)	Each Rights Certificate shall be dated the date of countersignature thereof.

Section 2.6     Registration, Registration of Transfer and Exchange.

     The Corporation will cause to be kept a register (the “Rights Register”) in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed “Rights Registrar” for

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the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as herein provided. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times.

(1)	After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate and subject to the provisions of Section 2.6(3) below and the other provisions of this Agreement, the Corporation will execute and the Rights Agent will countersign, register and deliver, in the name of the holder or the designated transferee or transferees as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.
(2)	All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.
(3)	Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the registered holder thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this Section 2.6, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and the Corporation may require payment of a sum sufficient to cover any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

Section 2.7     Mutilated, Destroyed, Lost and Stolen Rights Certificates.

(1)	If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation shall execute and the Rights Agent shall countersign and deliver in exchange therefore a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.
(2)	If there shall be delivered to the Corporation and the Rights Agent prior to the Expiration Time (i) evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate, and (ii) such indemnity or other security as may be required by them to save each of them and any of their agents harmless then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and upon its request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.
(3)	As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and the

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Corporation may require payment of a sum sufficient to cover any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

(4)

Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an original additional contractual obligation of the Corporation, whether or not the destroyed lost or stolen Rights Certificate shall he at any time enforceable by anyone, and the holder thereof shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other holders of Rights duly issued by the Corporation.

Section 2.8     Persons Deemed Owners.

     Prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated New Instrument certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent shall be entitled to deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation Time, the associated New Instrument certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever. As used in this Agreement, unless the context otherwise requires, the term “holder” of any Rights shall mean the registered holder of such Rights (or, prior to the Separation Time, the associated New Instruments).

Section 2.9     Delivery and Cancellation of Rights Certificates.

     All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Corporation may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9 except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and deliver a certificate of destruction to the Corporation.

Section 2.10     Agreement of Rights Holders.

     Every holder of Rights, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder of Rights:

(a)	to be bound by and subject to the provisions of this Agreement, as amended or supplemented from time to time in accordance with the terms hereof, in respect of all Rights held;
(b)	that prior to the Separation Time each Right will be transferable only together with, and will be transferred by a transfer of, the New Instrument certificate representing such Right;

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(c)	that after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;
(d)	that prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated New Instrument certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent shall be entitled to deem and treat the Person in whose name the Rights Certificate (or prior to the Separation Time, the associated New Instrument certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated New Instrument certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary;
(e)	that such holder of Rights has waived his right to receive any fractional Rights or any fractional shares upon exercise of Right;
(f)	that, in accordance with Section 5.4 hereof, without the approval of any holder of Rights and upon the sole authority of the Board of Directors acting in good faith this Agreement may be supplemented or amended from time to time pursuant to and as provided herein; and
(g)	that notwithstanding anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation, or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation.

Section 2.11     Rights Certificate Holder not Deemed a New Instrument Holder.

     No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Share or any other share or security of the Corporation which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed to confer upon the holder of any Right or Rights Certificate, as such, any of the rights, titles, benefits or privileges of a holder of New Instruments or any other shares or securities of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the election of directors or otherwise or upon any matter submitted to holders of shares of the Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any meeting or other action affecting any holder of New Instruments or any other shares or securities of the Corporation except as expressly provided herein, or to receive dividends, distributions or subscription rights, or

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otherwise, until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions hereof.

ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

Section 3.1     Flip-in Event.

(1)

Subject to Section 3.1(2) below, and Sections 5.1(2), (3) and (4) hereof, in the event that prior to the Expiration Time a Flip-in Event shall occur, the Corporation shall take such action as may be necessary to ensure and provide within eight (8) Business Days of such occurrence, or such longer period as may be required to satisfy all applicable requirements of the Securities Act, and the securities legislation of each other province of Canada that, except as provided below, each Right shall thereafter constitute the right to purchase from the Corporation upon exercise thereof in accordance with the terms hereof that number of Class A Shares or Class B Shares, as applicable, of the Corporation having an aggregate Market Price on the date of the occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such Right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in the event that after such date of occurrence an event of a type analogous to any of the events described in Section 2.3 hereof shall have occurred with respect to such Shares).

(2)

Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are Beneficially Owned by (i) an Acquiring Person, or any Affiliate or Associate of an Acquiring Person, or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such Acquiring Person, or any Affiliate or Associate of such Person so acting jointly or in concert, or (ii) a transferee or other successor in title of Rights, directly or indirectly, of an Acquiring Person (or of any Affiliate or Associate of an Acquiring Person) or of any Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate of an Acquiring Person (or of any Affiliate or Associate of such Person so acting jointly or in concert)who becomes a transferee or successor in title concurrently with or subsequent to the Acquiring Person becoming such, shall become null and void without any further action, and any holder of such Rights (including transferees or successors in title) shall not have any rights whatsoever to exercise such Rights under any provision of this Agreement and shall not have thereafter any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise.

ARTICLE IV
THE RIGHTS AGENT

Section 4.1     General.

(1) The Corporation hereby appoints the Rights Agent to act as agent for the Corporation in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts

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	such appointment. The Corporation may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, subject to the prior approval of the Rights Agent. In the event the Corporation appoints one or more co-Rights Agents, the respective duties of the Rights Agents and co-Rights Agents shall be as the Corporation may determine, with the approval of the Rights Agent. The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses (including reasonable counsel fees and disbursements) incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Corporation also agrees to indemnify the Rights Agent, its officers, directors and employees for, and to hold such Persons harmless against, any loss, liability, cost, claim, action, suit, damage or expense incurred (that is not the result of negligence, bad faith or wilful misconduct on the part of any one or all of the Rights Agent, its officers, directors or employees) for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability, which right to indemnification will survive the termination of this Agreement or the resignation or removal of the Rights Agent.
(2)	The Rights Agent shall be protected from and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for New Instruments or any Rights Certificate or certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.
(3)	The Corporation shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent and at any time, upon request, shall provide to the Rights Agent an incumbency certificate certifying the then current officers of the Corporation.

Section 4.2     Merger or Amalgamation or Change of Name of Rights Agent.

(1) Any Corporation into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with which it may be consolidated, or any Corporation resulting from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any Corporation succeeding to the shareholder or stockholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any

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of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.

(2)

In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

Section 4.3     Duties of Rights Agent.

     The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, to all of which the Corporation and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

(a)	The Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Corporation) and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted to be taken by it in good faith and in accordance with such opinion. Subject to the prior written consent of the Corporation, which consent shall not be unreasonably withheld, the Rights Agent may also consult with such other experts as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at the expense of the Corporation) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert.
(b)	Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter he proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proven and established by a certificate signed by a Person believed by the Rights Agent to be the Chairman of the Board, the President or any Vice-President, the Treasurer or the Secretary of the Corporation and delivered to the Rights Agent; and such certificate will he full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.
(c)	The Rights Agent will be liable hereunder only for events which are the result of its own negligence, bad faith or wilful misconduct and that of its officers, directors and employees.

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(d)	The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for New Instruments or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Corporation only.
(e)	The Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Share certificate or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 3.1(2) hereof) or any adjustment required under the provisions of Section 2.3 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 hereof describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Shares to be issued pursuant to this Agreement or any Rights or as to whether any Shares will, when issued, be duly and validly authorized, executed, issued and delivered or fully paid and non-assessable.
(f)	The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments and assurances as may reasonably he required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.
(g)	The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any Person believed by the Rights Agent to be the Chairman of the Board, President, any Vice-President, Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Corporation and to apply to such Persons for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such Person.
(h)	The Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in New Instruments, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity.

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(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or, with the prior written consent of the Corporation, by or through its attorneys or agents. The Rights Agent will not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, omission, default, neglect or misconduct, provided the prior written consent of the Corporation was obtained and reasonable care was exercised in the selection and continued employment thereof.

Section 4.4     Change of Rights Agent.

     The Rights Agent may resign and be discharged from its duties under this Agreement upon sixty (60) days’ notice (or such lesser notice as is acceptable to the Corporation) in writing mailed to the Corporation and to each transfer agent of New Instruments of the Corporation by registered or certified mail, and to the holders of the Rights in accordance with Section 5.8 hereof (all of which shall be at the expense of the Corporation). The Corporation may remove the Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent and to each transfer agent of the New Instruments of the Corporation by registered or certified mail and to the holders of the Rights in accordance with Section 5.8 hereof. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within a period of sixty (60) days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of any Rights (which holder shall, with such notice, submit such holder’s Rights Certificate for inspection by the Corporation), then the Rights Agent or the holder of any Rights may apply to any court of competent jurisdiction for the appointment of a new Rights Agent at the Corporation’s expense. Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be a Corporation incorporated under the laws of Canada or a province thereof authorized to carry on the business of a trust company in Canada. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent, upon receiving from the Corporation payment in full of all amounts outstanding under this Agreement, shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the New Instruments of the Corporation, and mail a notice thereof in writing to the holders of the Rights. The cost of giving any notice required under this Section 4.4 shall be borne solely by the Corporation. Failure to give any notice provided for in this Section 4.4 however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

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ARTICLE V
MISCELLANEOUS

Section 5.1     Redemption and Waiver.

(1)	Subject to the prior consent of the holders of each type or class of New Instruments or Rights obtained as set forth in Section 5.4(2) or Section 5.4(3) hereof, as applicable, the Board of Directors acting in good faith may, at any time prior to the occurrence of a Flip-in Event, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in the event that an event of the type described in Section 2.3 hereof shall have occurred (such redemption price being herein referred to as the “Redemption Price”).
(2)	Subject to the prior consent of the holders of each type or class of New Instruments obtained as set forth in Section 5.4(2) hereof, the Board of Directors may, at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 hereof has not been waived pursuant to this Section 5.1, if such Flip-in Event would occur by reason of an acquisition of New Instruments otherwise than pursuant to a Take-over Bid made by means of a Take-over Bid circular to all registered holders of New Instruments and otherwise than in the circumstances set forth in Section 5.1(4) hereof, waive the application of Section 3.1 hereof to such Flip-in Event. In such event, the Board of Directors shall extend the Separation Time to a date at least ten (10) Business Days subsequent to the meeting of shareholders called to approve such waiver.
(3)	The Board of Directors acting in good faith, may, prior to the occurrence of a Flip-in Event, and upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 hereof to a Flip-in Event that may occur by reason of a Take-over Bid made by means of a Take-over Bid circular to all registered holders of New Instruments; provided that if the Board of Directors waives the application of Section 3.1 hereof to a particular Flip-in Event pursuant to this Section 5.1(3), the Board of Directors shall be deemed to have waived the application of Section 3.1 hereof to any other Flip-in Event occurring by reason of any Take-over Bid made by means of a Take-over Bid circular to all registered holders of New Instruments prior to the expiry of any Take-over Bid in respect of which a waiver is, or is deemed to have been granted, pursuant to this Section 5.1(3).
(4)	The Board of Directors may, prior to the close of business on the tenth (10th) day following the Stock Acquisition Date, determine, upon prior written notice delivered to the Rights Agent, to waive or to agree to waive the application of Section 3.1 hereof to a Flip-in Event, provided that both of the following conditions are satisfied:

(a)	the Board of Directors has determined that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that Person would become, an Acquiring Person; and
(b)	such Acquiring Person has reduced its Beneficial Ownership of New Instruments (or has entered into a contractual arrangement with the Corporation, acceptable

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to the Board of Directors, to do so within thirty (30) days of the date on which such contractual arrangement is entered into) such that at the time the waiver becomes effective pursuant to this Section 5.1(4) it is no longer an Acquiring Person;

and in the event of such a waiver, for the purposes of this Agreement, the Flip-in Event shall be deemed never to have occurred.

(5)	Where a Person acquires, pursuant to a Permitted Bid, a Competing Bid or an Exempt Acquisition under Section 5.1(3) above, outstanding New Instruments, then the Corporation shall immediately upon the consummation of such acquisition redeem the Rights at the Redemption Price.
(6)	If the Corporation is obligated under Section 5.1(5) above to redeem the Rights, or if the Board of Directors elects under Section 5.1(1) above or Section 5.1(8) below to redeem the Rights, the right to exercise the Rights will thereupon, without further action and without notice, terminate and each Right will after redemption be null and void and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
(7)	Within ten (10) days after the Corporation is obligated under Section 5.1(5) above to redeem the Rights, or the Board of Directors elects under Section 5.1(1) above or Section 5.1(8) below to redeem the Rights, the Corporation shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to all such holders at their last address as they appear upon the Rights Register or, prior to the Separation Time, on the registry books of the Transfer Agent for the New Instruments. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. The Corporation may not redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 5.1 and other than in connection with the purchase of New Instruments prior to the Separation Time.
(8)	Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price.
(9)	Notwithstanding the Rights being redeemed pursuant to Section 5.1(8) above, all of the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of New Instruments as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred and Rights shall remain attached to the outstanding New Instruments, subject to and in accordance with the provisions of this Agreement.

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Section 5.2     Expiration.

     No Person shall have any rights whatsoever pursuant to or arising out of this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Section 4.1(1) hereof.

Section 5.3     Issuance of New Rights Certificates.

     Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the number or kind or class of shares purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

Section 5.4     Supplements and Amendments.

(1)	The Corporation may from time to time supplement or amend this Agreement without the approval of any holders of Rights or New Instruments (i) to correct any clerical or typographical error or (ii) to maintain the validity of the Agreement as a result of a change in any applicable legislation or regulations or rules thereunder.
	Notwithstanding anything in this Section 5.4 to the contrary, no supplement or amendment shall be made to the provisions of Article 4 hereof (other than pursuant to Section 5.4(1)(ii) above) except with the written concurrence of the Rights Agent to such supplement or amendment. No written concurrence of the Rights Agent shall be required in respect of the amendments required pursuant to Section 5.4(1)(ii) above.
(2)	Subject to Section 5.4(1) above, the Corporation may, with the prior consent of the holders of New Instruments (voting for such purpose as if all New Instruments were of a single class, on a fully converted basis, if applicable) obtained as set forth below, at any time prior to the Separation Time amend, vary or rescind any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally). Such consent shall be deemed to have been given if provided by the holders of New Instruments at a meeting of the holders of all types and classes of New Instruments (treated for such purpose as if they were of a single class), which meeting shall be called and held in compliance with applicable laws and regulatory requirements and the requirements in the Articles and by-laws of the Corporation. Subject to compliance with any requirements imposed by the foregoing, consent shall be deemed to have been given if the proposed amendment, variation or revision is approved by the affirmative vote of a majority of the votes cast by holders of New Instruments (voting for such purpose as if all New Instruments were of a single class, on a fully converted basis) (other than any holder of New Instruments who is an Offeror pursuant to a Take-over Bid that is not a Permitted Bid or Competing Bid with respect to all New Instruments Beneficially Owned by such Person), represented in person or by proxy at the meeting.
(3)	The Corporation may, with the prior consent of the holders of Rights, at any time after the Separation Time and before the Expiration Time, amend, vary or rescind any of the

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	provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally).
(4)	Any approval of the holders of Rights shall be deemed to have been given if the action requiring such approval is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof. For the purposes hereof, each outstanding Right, (other than Rights which are void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Corporation’s by-laws and the CBCA with respect to a meeting of shareholders of the Corporation.
(5)	The Corporation shall be required to provide the Rights Agent with notice in writing of any such amendment, variation or deletion to this Agreement as referred to in this Section 5.4 within 5 days of effecting such amendment, variation or deletion.
(6)	Any supplements or amendments made by the Corporation to this Agreement pursuant to Section 5.4(1) above which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder shall:

(a)	if made before the Separation Time, be submitted to the shareholders of the Corporation at the next meeting of shareholders and the shareholders may, by the majority referred to in Section 5.4(2) above, confirm or reject such amendment; and
(b)	if made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a date not later than immediately following the next meeting of shareholders of the Corporation and the holders of each applicable type of Rights may, by resolution passed by the majority referred to in Section 5.4(4) above, confirm or reject such amendment.

     A supplement or amendment of the nature referred to in this Section 5.4(6) shall be effective from the date of the resolution of the Board of Directors adopting such supplement or amendment until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such supplement or amendment is confirmed, it continues in effect in the form so confirmed. If such supplement or amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or holders of Rights as required, then such supplement or amendment shall cease to be effective from and after the termination of the meeting at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolution of the Board of Directors to amend, vary or delete any provision of this Agreement to substantially the same effect shall be effective until confirmed by the shareholders or holders of Rights, as the case may be.

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Section 5.5     Fractional Rights and Fractional New Instruments.

(1)

The Corporation shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. Any such fractional Right shall be null and void and the Corporation will not have any obligation or liability in respect thereof.

(2)

The Corporation shall not be required to issue fractions of Shares or other securities upon exercise of the Rights or to distribute certificates which evidence fractional Shares or other securities. In lieu of issuing fractional Shares or other securities, the Corporation shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided, an amount in cash equal to the same fraction of the Market Price of one Share. The Rights Agent shall have no obligation to make any payments in lieu of fractional Shares unless the Corporation shall have provided the Rights Agent with the necessary funds to pay in full all amounts payable in accordance with Section 2.2(5).

Section 5.6     Rights of Action.

     Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective registered holders of the Rights; and any registered holder of any Rights, without the consent of the Rights Agent or of the registered holder of any other Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce such holder’s right to exercise such holder’s Rights in the manner provided in such holder’s Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

Section 5.7     Notice of Proposed Actions.

     In case the Corporation shall propose after the Separation Time and prior to the Expiration Time to effect the liquidation, dissolution or winding-up of the Corporation or the sale of all or substantially all of the Corporation’s assets, then, in each such case, the Corporation shall give to each holder of a Right, in accordance with Section 5.8 hereof, a notice of such proposed action, which shall specify the date on which such liquidation, dissolution, winding up, or sale is to take place, and such notice shall be so given at least twenty (20) Business Days prior to the date of taking of such proposed action.

Section 5.8     Notices.

(1) Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or on the Corporation shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

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Microcell Telecommunications Inc.

800 de La Gauchetière Street West

Suite 4000

Montreal, Quebec

H5A 1K3

Attention:	Vice President, Legal Affairs
Facsimile:	(514) 846-6928

(2) Any notice or demand authorized or required by this Agreement to be given or made by the Corporation or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Corporation) as follows:

Computershare Trust Company of Canada

1500 University Street

Suite 700

Montreal, Quebec

H3A 3S8

Attention:	Manager, Client Services
Telecopier:	(514) 982-7580

     Notices or demands authorized or required by this Agreement to be given or made by the Corporation or the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the Rights Register or, prior to the Separation Time, on the registry books of the transfer agent for the New Instruments. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.

Section 5.9     Successors.

     All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the Rights Agent shall bind and enure to the benefit of their respective successors and assigns hereunder.

Section 5.10     Benefits of this Agreement.

     Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of the Rights.

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Section 5.11     Governing Law.

     This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the Province of Quebec and for all purposes shall be governed by and construed in accordance with the laws of such province.

Section 5.12     Severability.

     If any Section, Clause, term or provision hereof or the application thereof to any circumstances or any right hereunder shall, in any jurisdiction and to any extent, be invalid or unenforceable, such Section, Clause, term or provision or such right shall be ineffective only in such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining Sections, Clauses, terms and provisions hereof or rights hereunder in such jurisdiction or the application of such Section, Clause, term or provision or rights hereunder in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.

Section 5.13     Effective Date.

     This Agreement is effective and in full force and effect in accordance with its terms and conditions as of and from the date hereof (the “Effective Date”).

Section 5.14     Determinations and Actions by the Board of Directors.

     All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors, in good faith, shall not subject the Board of Directors or any director of the Corporation to any liability to the holders of the Rights.

Section 5.15     Rights of Board, Corporation and Offeror.

     Without limiting the generality of the foregoing, nothing contained herein shall be construed to suggest or imply that the Board of Directors shall not be entitled to recommend that holders of New Instruments reject or accept any Take-over Bid or take any other action (including, without limitation, the commencement, prosecution, defense or settlement of any litigation and the submission of additional or alternative Take-over Bids or other proposals to the holders of New Instruments) with respect to any Take-over Bid or otherwise that the Board of Directors believes is necessary or appropriate in the exercise of its fiduciary duties.

Section 5.16     Regulatory and Governmental Approvals.

     This Agreement shall be subject in any jurisdiction to the receipt of any required prior or subsequent approval from any governmental or regulatory authority in such jurisdiction, including any securities regulatory authority or stock exchange.

Section 5.17     Declaration as to Non-Canadian Holders.

     If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance with the securities laws or comparable legislation of a jurisdiction outside Canada or the United States,

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the Board of Directors acting in good faith may take such actions as it may deem appropriate to ensure such compliance. In no event shall the Corporation or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to Persons who are citizens, residents or nationals of any jurisdiction other than Canada or the United States in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes, or (until such notice is given as required by law) without advance notice to any regulatory or self-regulatory body.

Section 5.18     Time of the Essence.

     Time shall be of the essence in this Agreement.

Section 5.19     Execution in Counterparts.

     This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

Section 5.20     Costs of Enforcement.

     The Corporation agrees that if the Corporation fails to fulfil any of its obligations pursuant to this Agreement, then the Corporation will reimburse the holder of any Rights for the costs and expenses (including reasonable legal fees) incurred by such holder in actions to enforce his rights pursuant to any Rights or this Agreement.

Section 5.21     Language.

     Les parties aux présentes ont exigé que la présente convention ainsi que tous documents et avis qui s’y rattachent et/ou qui en découleront soient rédigés en langue anglaise. The parties hereto have required that this Agreement and all documents and notices related thereto and/or resulting therefrom be drawn up in the English language.

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     IN WITNESS WHEREOF, the parties have executed this Agreement.

MICROCELL TELECOMMUNICATIONS INC.
By:
	Jocelyn Côté
	Vice President, Legal Affairs

COMPUTERSHARE TRUST COMPANY OF CANADA
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

SCHEDULE 2.2(3)

FORMS OF RIGHTS CERTIFICATES

Certificate No.     Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 3.1(2) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID WITHOUT ANY FURTHER ACTION.

RIGHTS CERTIFICATE

This certifies that            or registered assigns, is the registered holder of the number of Rights set forth above each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement dated as of May 1, 2003, as amended and restated from time to time (the “Rights Agreement”), between Microcell Telecommunications Inc., a Corporation incorporated under the laws of Canada (the “Corporation”), and Computershare Trust Company of Canada, a trust company incorporated under the laws of Canada, as rights agent (the “Rights Agent”, which term shall include any successor Rights Agent under the Rights Agreement) to purchase from the Corporation at any time after the Separation Time (as such term is defined in the Rights Agreement) and prior to the close of business on the date immediately following the date of the Corporation’s annual shareholders meeting to be held in 2004 (or such earlier expiration time as is provided in the Rights Agreement) one fully paid and non-assessable [Class A/Class B] Share of the Corporation (a “Share”) at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate together with the Form of Election to Exercise duly executed and submitted to the Rights Agent at its principal corporate actions office in Toronto. The Exercise Price shall initially be CDN$100.00 per Right and shall be subject to adjustment in certain events as provided in the Rights Agreement.

In certain circumstances described in the Rights Agreement, the number of Shares which each Right evidenced hereby may entitle the registered holder thereof to purchase shall be adjusted as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Corporation and the holders of the Rights. Copies of the Rights Agreement are on file at the registered head office of the Corporation and are available upon written request.

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This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights entitling the holder to purchase a like aggregate number of Shares as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation at a redemption price of $0.00001 per Right.

No fractional Shares will be issued upon the exercise of any Right or Rights evidenced hereby.

No holder of this Rights Certificate, as such, shall be entitled to vote, receive dividends or be deemed for any purpose the holder of New Instruments or of any other securities of the Corporation which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof any of the rights of a shareholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders of the Corporation (except as expressly provided in the Rights Agreement), or to receive dividends, distributions or subscription rights, or otherwise until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been manually countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation.

DATED

MICROCELL TELECOMMUNICATIONS INC.
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

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COMPUTERSHARE TRUST COMPANY OF CANADA
By:
	Authorized Signing Officer
By:
	Authorized Signing Officer

(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

TO: MICROCELL TELECOMMUNICATIONS INC.

The undersigned hereby irrevocably elects to exercise            whole Rights represented by the attached Rights Certificate to purchase the [Class A/Class B] Shares issuable upon the exercise of such Rights and requests that certificates for such New Instruments be issued to:

(Name)

(City and State or Province)

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

(City and State or Province)

(Social Insurance, Social Security or Other Taxpayer Number)

Dated                     

Signature Guaranteed

(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

The signature must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Rights Agent. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and New Instruments, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or any Person acting jointly or in concert with any of the foregoing or any Affiliate or Associate of such Person (as defined in the Rights Agreement).

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NOTICE

In the event the certification set forth in the Form of Election to Exercise is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED                     
hereby sells,

assigns and transfers unto                     

(Please print name and address of transferee)

the Rights represented by this Rights Certificate, together with all right, title and interest therein and does hereby irrevocably constitute and appoint              as attorney to transfer the within Rights on the books of the Corporation, with full power of substitution.

Dated                     

Signature Guaranteed

Signature

(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

The signature must be guaranteed by an “Eligible Institution”, or in some other manner satisfactory to the Rights Agent. An “Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of the Securities Transfer Agent Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada and the United States, members of the Investment Dealers Association of Canada, members of the National Association of Securities Dealers or banks and trust companies in the United States.

To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and New Instruments, that the Rights evidenced by this Rights Certificate are not and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or any Person acting jointly or in concert with any of the foregoing (as defined in the Rights Agreement).

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Signature

NOTICE

In the event the certification set forth in the Form of Assignment is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

EX-4.1 10 m10142orexv4w1.htm EX-4.1

Exhibit 4.1

TRANCHE A EXIT FACILITY AGREEMENT

          THIS TRANCHE A EXIT FACILITY AGREEMENT (this “Agreement”) dated as of May 1, 2003 is entered into among Microcell Telecommunications Inc., as Parent, Microcell Solutions Inc., as Borrower, the financial institutions from time to time parties hereto as Lenders, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent, Collateral Agent and Issuing Bank. Reference is made to the Introductory Statements below and Section 1.1 hereof for the definition of certain capitalized terms used herein.

INTRODUCTORY STATEMENTS:

A.       Pursuant to that certain Amended and Restated Credit Agreement, dated as of May 7, 1999 (as amended, supplemented or otherwise modified or restated from time to time, the “Pre-Filing Credit Agreement”), among Microcell Connexions Inc. and Microcell Solutions Inc. (collectively, the “Pre-Filing Borrowers”), Microcell Telecommunications Inc. (the “Pre-Filing Parent”), the lenders from time to time party thereto (collectively, the “Pre-Filing Lenders”), J.P. Morgan Bank Canada, as administrative agent and collateral agent for the Pre-Filing Lenders, and National Bank of Canada, as letter of credit issuing bank, the Pre-Filing Lenders made loans and advances to, issued letters of credit for and/or provided other financial accommodations to, or on behalf of, the Pre-Filing Borrowers (collectively, the “Pre-Filing Loans”);

B.       The Pre-Filing Loans and other obligations of the Pre-Filing Borrowers under the Pre-Filing Credit Agreement and the guarantors in respect thereof, together with certain obligations under certain terminated hedging arrangements with J.P. Morgan Bank Canada as a successor in interest to ABN-AMRO Bank Canada and Canadian Imperial Bank of Commerce (collectively, the “Pre-Filing Hedging Obligations”), are secured by valid, binding, enforceable and perfected liens, security interests and hypothecs in substantially all the assets of the Pre-Filing Borrowers, the Pre-Filing Parent and such guarantors thereof;

C.       On January 3, 2003, the Pre-Filing Parent, the Pre-Filing Borrowers, and certain other direct or indirect subsidiaries of the Pre-Filing Parent commenced proceedings under the Companies Creditors Arrangement Act (the “CCAA”) and the Canada Business Corporations Act (the “CBCA”); a plan of reorganization and of compromise and arrangement (as such plan of reorganization and of compromise and arrangement may be amended, modified or supplemented in accordance with its terms, the “Plan of Arrangement”) was filed with the Court on February 20, 2003;

D.       The Plan of Arrangement was sanctioned and approved by the Court on March 18, 2003;

E.       Pursuant to the Plan of Arrangement, the obligations under the Pre-Filing Credit Agreement and the Pre-Filing Hedging Obligations (collectively, “Pre-Filing Secured Claims”) are to be restructured;

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F.       Pursuant to the Plan of Arrangement and the Sanction Order, through a series of transactions, the Pre-Filing Borrowers and the Pre-Filing Parent are completing a corporate reorganization, with the result that the obligations of the Pre-Filing Borrowers and the Pre-Filing Parent have become the obligations of the Borrower and the Parent, respectively;

G.       Pursuant to the Plan of Arrangement, the Borrower is permitted to obtain a first-ranking secured credit facility in a principal amount of up to Cdn.$75,000,000; the Lenders hereunder are prepared to provide to the Borrower a first-ranking secured revolving credit facility in a principal amount of Cdn.$25,000,000, as provided hereby, and the Parent and certain subsidiaries of the Borrower and the Parent shall irrevocably and unconditionally guarantee the obligations of the Borrower hereunder.

          NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the Lenders, the Administrative Agent, the Parent and the Borrower hereby agree as follows.

ARTICLE 1

DEFINITIONS

1.1      Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

     “Acceptance Fee” means a fee payable by the Borrower to the Administrative Agent for the account of a Lender in Canadian Dollars with respect to the acceptance of a B/A or the making of a B/A Equivalent Loan, calculated on the face amount of the B/A or the undiscounted amount of the B/A Equivalent Loan at the rate per annum equal to the Applicable Margin on the basis of the number of days in the applicable Contract Period (including the date of acceptance and excluding the date of maturity) and a year of 365 days, (it being agreed that the Applicable Margin in respect of a B/A Equivalent Loan is equivalent to the Applicable Margin otherwise applicable to the B/A which has been replaced by the making of such B/A Equivalent Loan pursuant to Section 2.7 (h)).

     “Additional Subsidiary” is defined in Section 5.12.

     “Administrative Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as administrative agent for the Lenders hereunder, or any successor Administrative Agent appointed pursuant to Section 8.9.

     “Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, such Person.

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     “Agents” means the Administrative Agent and the Collateral Agent.

     “Applicable Margin” means, (i) with respect to any Prime Rate Loan or Base Rate Loan, 2.50% (250 basis points), and (ii) with respect to any Eurodollar Loan or B/A Borrowing, 3.50% (350 basis points).

     “Applicable Percentage” means, with respect to any Lender, the percentage of the total Loans represented by such Lender’s Loans or, if on any date of determination no Loans are outstanding, the percentage of the total Commitments represented by such Lender’s Commitments, as listed in Schedule A.

     “ARPU” means average retail revenue per Subscriber per month. For greater certainty, ARPU shall exclude “roaming-in charges” (i.e. roaming charges incurred by users which are not Subscribers).

     “Asset Disposition” means, with respect to any Credit Party, the sale, lease, license, transfer, assignment or other disposition of, or the expropriation, condemnation, destruction or other loss of, all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one transaction or a series of transactions (including a Sale/Leaseback Transaction), other than (a) inventory sold in the ordinary course of business upon customary credit terms, (b) sales of scrap or obsolete material or equipment which are not material in the aggregate, (c) sales or other dispositions of assets which are not in the ordinary course of business or leases of real property or personal property (under which a Credit Party is lessor), in any such case, which have a Fair Market Value less than Cdn.$2,000,000 for any transaction and less than Cdn.$2,000,000 for all such transactions in any Fiscal Year and which are no longer used or useful in the business, (d) licenses granted to third parties in the ordinary course of business, (e) property sold to any other Credit Party, and (f) any other disposition consented to by the Required Lenders. In the case of an expropriation, condemnation, destruction or other loss of any property, any insurance proceeds or other indemnity received as a result of such event may be used by the Credit Party within the 90-day period following the receipt of such insurance proceeds or other indemnity to replace the property so disposed of and such sale or disposition will not constitute an Asset Disposition.

     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

     “Authorization” means, with respect to any Person, any authorization, order, permit, approval, grant, licence, consent, right, franchise, privilege, certificate, judgment, writ, injunction, award, determination, direction, decree, by-law, rule or regulation of any Governmental Authority having jurisdiction over such Person, whether or not having the force of Law.

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     “B/A Borrowing” means a Borrowing comprised of one or more Banker’s Acceptances or, as applicable, B/A Equivalent Loans. For greater certainty, unless the context requires otherwise, all provisions of this Agreement which are applicable to Banker’s Acceptances are also applicable, mutatis mutandis, to B/A Equivalent Loans.

     “B/A Equivalent Loan” is defined in Section 2.7(h).

     “Banker’s Acceptance” and “B/A” mean an instrument denominated in Canadian Dollars, drawn by the Borrower and accepted by a Lender in accordance with this Agreement, and includes a depository bill within the meaning of the Depository Bills and Notes Act (Canada) and a bill of exchange within the meaning of the Bills of Exchange Act (Canada).

     “Base Rate” means, on any day, the annual rate of interest equal to the greater of (i) the annual rate of interest announced by the Administrative Agent and in effect as its base rate at its principal office in Toronto, Ontario on such day for determining interest rates on U.S. Dollar-denominated commercial loans made in Canada, and (ii) the Federal Funds Effective Rate plus 0.50%.

     “Base Rate Borrowing” means a Borrowing comprised of one or more Base Rate Loans.

     “Base Rate Loan” means a Loan denominated in U.S. Dollars which bears interest at a rate based upon the Base Rate.

     “Borrower” means Microcell Solutions Inc., a CBCA corporation, and its successors and permitted assigns.

     “Borrowing” means any availment of the Commitments made hereunder, and includes a rollover or conversion of any outstanding Loan.

     “Business” means, with respect to the Credit Parties, (i) the development, delivery or distribution in Canada of telecommunications services (including wireless voice, data or video services), (ii) any business or activity reasonably related thereto, including any business conducted by the Credit Parties on the Effective Date, and (iii) the acquisition, holding or exploitation of any licence relating to the delivery of the services described in clause (i) of this definition.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and Montreal, Quebec are authorized or required by applicable law to remain closed and, in the case of any U.S. Dollar-denominated Loan or any Letter of Credit, also a day on which commercial banks in New York, New York are authorized or required by applicable law to remain closed and, in the case of any Eurodollar Loan, also a day on which commercial banks in London, England are authorized or required by applicable law to remain closed.

     “Canadian Court” means the Superior Court of the Province of Quebec.

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     “Canadian Dollar” and “Cdn.$” refer to lawful money of Canada.

     “Cdn.$ Loans” means the Loans denominated in Canadian Dollars made hereunder.

     “Capital Expenditures” means, for any period, all expenditures (whether paid in cash or accrued as a liability, including the portion of Capital Lease Obligations originally incurred during such period that are capitalized) during such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or equipment” or comparable items, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, in an amount not exceeding any insurance proceeds received in connection with such destruction or damage.

     “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “CBCA” is defined in Introductory Statement C.

     “CCAA” is defined in Introductory Statement C.

     “CDOR Rate” means, on any date, the annual rate of interest which is the rate based on an average rate applicable to Canadian Dollar banker’s acceptances for the applicable period appearing on the “Reuters Screen CDOR Page”, rounded to the nearest 1/100^th of 1% (with .005% being rounded up), at approximately 10:00 a.m., Toronto time, on such date, or if such date is not a Business Day, then on the immediately preceding Business Day, provided that if such rate does not appear on the Reuters Screen CDOR Page on such date as contemplated, then the CDOR Rate on such date shall be calculated as the arithmetic mean of the rates for the term referred to above applicable to Canadian Dollar banker’s acceptances quoted by the banks listed in Schedule I of the Bank Act (Canada) as of 10:00 a.m., Toronto time, on such date or, if such date is not a Business Day, then on the immediately preceding Business Day.

     “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group of Persons, acting jointly or otherwise in concert, of Equity Securities representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Securities of the Parent, and more than 30% of the issued and outstanding Equity Securities of the Parent; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Parent (as comprised on the Effective Date after giving effect to the Plan of Arrangement and the Sanction Order) by Persons who were neither (i) nominated by the board of directors of the Parent nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect Control of the Parent by any Person or group of Persons acting jointly or otherwise in concert.

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     “Change in Law” means (i) the adoption of any new Law after the date of this Agreement, (ii) any change in any existing Law or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.9(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law, but in the case of a request, guideline or directive not having the force of law, being a request, guideline or directive with which Persons customarily comply) of any Governmental Authority made or issued after the date of this Agreement.

     “Collateral” means the property which is charged by or hypothecated under the Security Documents, and includes all property, rights and assets, present and future, of the Borrower, the Parent and those subsidiaries of the Borrower or the Parent which have provided or may hereafter provide security to the Collateral Agent (or to any trustee or “fondé de pouvoir” for or on behalf of the Collateral Agent and/or the Lenders) to secure the obligations of the Borrower, the Parent and such subsidiaries under this Agreement and the other Financing Documents.

     “Collateral Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as collateral agent and fondé de pouvoir for the Lenders hereunder, and pursuant to the Intercreditor Agreement, or any successor Collateral Agent appointed pursuant to the Intercreditor Agreement.

     “Collateral and Guarantee Requirement” means the requirement that:

(i)	the Collateral Agent (or the Administrative Agent in the case of a Guarantee) shall have received (i) from each Credit Party, a counterpart of each of the Security Documents duly executed and delivered on behalf of such Credit Party, and (ii) in the case of any Person that becomes a Credit Party after the Effective Date, either (as applicable) (A) a supplement to each applicable Security Document, in the form specified therein, duly executed and delivered on behalf of such Credit Party, and/or (B) additional Security Documents, in form and substance satisfactory to the Collateral Agent, duly executed and delivered on behalf of such Credit Party;
(ii)	all outstanding Equity Securities of the Borrower, each other Subsidiary owned by or on behalf of any Credit Party, and each Unrestricted Subsidiary owned by or on behalf of any Credit Party, shall have been pledged pursuant to pledge agreements, in form and substance satisfactory to the Collateral Agent, and the Collateral Agent shall have received certificates or other instruments representing all such Equity Securities, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;
(iii)	each promissory note evidencing any Indebtedness of any Credit Party or any Unrestricted Subsidiary that is owing to any other Credit Party shall have been pledged pursuant to pledge agreements, in form and substance satisfactory to the

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	Collateral Agent, and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;
(iv)	all documents and instruments, including all PPSA financing statements or other appropriate filings, required by Law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create (or continue the creation of) the Liens intended to be created by the Security Documents and perfect or render opposable against third parties (or continue to perfect or render opposable against third parties) such Liens to the extent required by, and with the priority required by, the Security Documents, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;
(v)	the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property, duly executed and delivered by the owner of such Mortgaged Property, and (ii) such legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; and
(vi)	each Credit Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder.

     “Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder, as such commitment may be reduced from time to time pursuant to Section 2.6, as such commitment may be increased from time to time pursuant to Section 2.17, and as such commitment may be reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.4. The initial amount of each Lender’s Commitment is set forth on Schedule A, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of Commitments is Cdn.$25,000,000.

     “Contract Period” means the term of any B/A Borrowing selected by the Borrower in accordance with Section 2.2(b)(iv) commencing on the date of such B/A Borrowing and expiring on a Business Day which shall be either one month, two months, three months or, if available, as determined by the Administrative Agent in good faith, six months thereafter (or such other terms as may be requested by the Borrower and approved unanimously by the Lenders), provided that (i) subject to subparagraph (ii) below, each such period shall be subject to such extensions or reductions as may be determined by the Administrative Agent to ensure that each Contract Period will expire on a Business Day, and (ii) no Contract Period shall extend beyond the Maturity Date.

     “Control” means, in respect of a particular Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person,

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whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

     “Credit Party” means the Parent, the Borrower, the Pre-Filing Parent, each of the Subsidiaries and any other Person which is a party to a Financing Document (other than the Administrative Agent, the Collateral Agent and the Lenders and their respective successors and assigns), but, for greater certainty, does not include any Unrestricted Subsidiary.

     “CRTC” means the Canadian Radio-television and Telecommunications Commission.

     “Currency Due” is defined in Section 2.13.

     “Default” means any event or condition which constitutes an Event of Default or which, upon notice, lapse of time or both, would, unless cured or waived, become an Event of Default.

     “Discount Proceeds” means, for any B/A (or, as applicable, any B/A Equivalent Loan), an amount (rounded to the nearest whole cent, and with one-half of one cent being rounded up) calculated on the first day of the applicable Contract Period by multiplying:

(i)	the face amount of the B/A (or, as applicable, the undiscounted amount of the B/A Equivalent Loan); by
(ii)	the quotient of one divided by the sum of one plus the product of

(A)	the Discount Rate (expressed as a decimal) applicable to such B/A (or, as applicable, such B/A Equivalent Loan), multiplied by
(B)	a fraction, the numerator of which is the Contract Period of the B/A (or, as applicable, the B/A Equivalent Loan) and the denominator of which is 365,

with such quotient being rounded up or down to the nearest fifth decimal place, and with .000005 being rounded up.

     “Discount Rate” means (i) with respect to any Lender which is a Schedule I chartered bank under the Bank Act (Canada), as applicable to a B/A being accepted (or, as applicable, a B/A Equivalent Loan being made) by such Lender on any day, the CDOR Rate on such day; and (ii) with respect to any Lender which is not a Schedule I chartered bank under the Bank Act (Canada), as applicable to a B/A being accepted (or, as applicable, a B/A Equivalent Loan being made) by such Lender on any day, the lesser of (a) the CDOR Rate on such day, plus 0.10%, and (b) the percentage discount rate quoted by such Lender as the percentage discount rate at which such Lender would, in accordance with its normal practices, at or about 10:00 a.m., Toronto time, on such date, be prepared to purchase banker’s acceptances having a face amount and term comparable to the face amount and term of such B/A or B/A Equivalent Loan.

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     “EBITDA” means operating income (loss) excluding restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

     “Effective Date” means the “Effective Date” as defined in the Plan of Arrangement.

     “Environmental Laws” means all federal, provincial, local or foreign laws, rules, regulations, codes, ordinances, orders, decrees, judgements, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling, release, threatened release or disposal of any Hazardous Material, or to health and safety matters.

     “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

     “Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.

     “Eurodollar Borrowing” means a Borrowing comprised of one or more Eurodollar Loans.

     “Eurodollar Loan” means a Loan denominated in U.S. Dollars which bears interest at a rate based upon the Eurodollar Rate.

     “Eurodollar Rate” means, with respect to any Eurodollar Loan for any Interest Period, the rate for U.S. Dollar borrowings appearing on Page LIBOR01 of the Reuters Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for U.S. Dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “Eurodollar Rate” with respect to such Eurodollar Loan for such Interest Period shall be the rate at which U.S. Dollar deposits of U.S.$5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately

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available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

     “Events of Default” has the meaning specified in Section 7.1.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, income or franchise Taxes imposed on (or measured by) its taxable income or capital Taxes imposed on (or measured by) its taxable capital, in each case by Canada, or by the jurisdiction under the Laws of which such recipient is organized or in which its principal office is located or Canadian federal withholding tax imposed under the Income Tax Act solely by reason of a Lender not dealing at arm’s length with the Borrower within the meaning of the Income Tax Act other than solely by reason of the interest of such Lender in the rights and securities of the Borrower and the Guarantors acquired by such Lender pursuant to the Plan of Arrangement.

     “Fair Market Value” means (a) with respect to any asset or group of assets (other than a marketable security) at any date, the value of the consideration obtainable in a sale of such asset at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal, and (b) with respect to any marketable security at any date, the closing sale price of such marketable security on the Business Day next preceding such date, or, if there is no such closing sale price of such marketable security, the final price for the purchase of such marketable security at face value quoted on such Business Day by a financial institution of recognized standing selected by the Administrative Agent which regularly deals in securities of such type.

     “Federal Funds Effective Rate” means, for any day, the per annum rate equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System of the United States of America arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Board of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by JPMorgan Chase Bank in New York City from three Federal funds brokers of recognized standing selected by it.

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

     “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower or the Parent.

     “Financing Documents” means this Agreement, the Security Documents, the Mortgages, the Intercreditor Agreement and the Notices of Borrowing/Conversion/Continuation, together

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with any other document, instrument or agreement (other than participation, agency or similar agreements among the Lenders or between any Lender and any other bank or creditor with respect to any Indebtedness or obligations of the Borrower or any Subsidiary (as applicable) hereunder or thereunder) now or hereafter entered into in connection with this Agreement, as such documents, instruments or agreements may be amended, modified or supplemented from time to time.

     “First Notes” means the first subordinated convertible 9% notes issuable by the Parent pursuant to a certain First Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “First Preferred Shares” means first preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Fiscal Quarter” means any fiscal quarter of the Borrower.

     “Fiscal Year” means any fiscal year of the Borrower.

     “Foreign Lender” means any Lender that is a non-resident of Canada for Canadian tax purposes and not an “authorized foreign bank” under Section 2 of the Bank Act (Canada).

     “FPNV Shares” means the first preferred non-voting shares in the capital of the Parent.

     “FPV Shares” means the first preferred voting shares in the capital of the Parent

     “GAAP” means generally accepted accounting principles in Canada as in effect from time to time.

     “Governmental Authority” means the Government of Canada, any other nation or any political subdivision thereof, whether provincial, state, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, fiscal or monetary authority or other authority regulating financial institutions, and any other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including the Basel Committee on Banking Supervision of the Bank for International Settlements.

     “Guarantee” of or by any Person (in this definition, the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (in this definition, the “primary credit party”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness

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or other obligation of the payment thereof, (c) to maintain working capital, equity capital solvency, or any other balance sheet, income statement or other financial statement condition or liquidity of the primary credit party so as to enable the primary credit party to pay such Indebtedness or other obligation, or (d) as an account party in respect of any letter of credit or letter of guarantee issued to support such Indebtedness or other obligation.

     “Hazardous Materials” means any substance, product, liquid, waste, pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid matter, organic or inorganic matter, fuel, micro-organism, ray, odour, radiation, energy, vector, plasma, constituent or material which (a) is or becomes listed, regulated or addressed under any Environmental Law, or (b) is, or is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of pollution or contamination under any Environmental Law, including, asbestos, petroleum and polychlorinated biphenyls, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

     “Income Tax Act” means the Income Tax Act (Canada), as amended from time to time.

     “Indebtedness” of any Person includes, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (j) all obligations, contingent or otherwise, of such Person in respect of banker’s acceptances, and (k) the net amount of obligations of such Person (determined on a marked-to-market basis) under Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general or limited partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. For greater certainty, “Indebtedness” does not include short-term trade debt incurred in the ordinary course of business.

     “Indemnified Taxes” means all Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning specified in Section 9.3(b).

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     “Information Circular” means the Information Circular and Proxy Statement dated February 17, 2003 issued by the Pre-Filing Parent, Pre-Filing Borrowers and certain of their subsidiaries in connection with the Plan of Arrangement.

     “Intercreditor Agreement” means an Intercreditor and Collateral Agency Agreement substantially in the form attached as Exhibit B, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Interest Payment Date” means, (a) in the case of any Loan other than a Eurodollar Loan, a B/A or a B/A Equivalent Loan, the first Business Day of each month, and (b) in the case of a Eurodollar Loan, the last day of each Interest Period relating to such Eurodollar Loan, provided that if an Interest Period for any Eurodollar Loan is of a duration exceeding 90 days, then “Interest Payment Date” shall also include each date which occurs at each 90-day interval during such Interest Period.

     “Interest Period” means, with respect to a Eurodollar Loan, the period commencing on the first day of such Loan and ending on the numerically corresponding day in the calendar month that is 30, 60, 90 or 180 days thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the immediately succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period pertaining to a Eurodollar Loan that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (iii) no Interest Period shall extend beyond any date that any principal payment or prepayment is scheduled to be due unless the aggregate principal amount of Prime Rate Loans, Base Rate Loans, B/As, B/A Equivalent Loans and Eurodollar Loans which have Interest Periods or Contract Periods which will expire on or before such date, less the aggregate amount of any other principal payments or prepayments due during such Interest Period, is equal to or in excess of the amount of such principal payment or prepayment, and (iv) no Interest Period shall extend beyond the Maturity Date.

     “Investment” means, as applied to any Person (the “investor”), any direct or indirect purchase or other acquisition by the investor of, or a beneficial interest in, Equity Securities of any other Person, including any exchange of Equity Securities for Indebtedness, or any direct or indirect loan, advance (other than advances to employees for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by the investor to any other Person, including all Indebtedness and accounts receivable owing to the investor from such other Person that did not arise from sales or services rendered to such other Person in the ordinary course of the investor’s business, or any direct or indirect purchase or other acquisition of bonds, notes, debentures or other debt securities of, any other Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment minus any amounts

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(a) realized upon the disposition of assets comprising an Investment (including the value of any liabilities assumed by any Person other than the Credit Parties in connection with such disposition), (b) constituting repayments of Investments that are loans or advances or (c) constituting cash returns of principal or capital thereon (including any dividend, redemption or repurchase of equity that is accounted for, in accordance with GAAP, as a return of principal or capital).

     “Issuing Bank” means JPMorgan Chase Bank, Toronto Branch, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.15(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

     “Judgment Currency” is defined in Section 2.13.

     “Laws” means all federal, provincial, municipal, foreign and international statutes, acts, codes, ordinances, decrees, treaties, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards or any provisions of the foregoing, including general principles of common and civil law and equity, and all policies, practices and guidelines of any Governmental Authority binding on or affecting the Person referred to in the context in which such word is used (including, in the case of tax matters, any accepted practice or application or official interpretation of any relevant taxation authority); and “Law” means any one or more of the foregoing.

     “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

     “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total Commitments at such time.

     “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of such Lender, or (ii) any Person that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender, and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

     “Lenders” means the Persons listed as lenders on Schedule A and any other Person that shall have become a party hereto pursuant to Section 2.17 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

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     “Letter of Credit” means any Standby Letter of Credit issued pursuant to this Agreement.

     “Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, security interest, royalty interest, adverse claim, defect of title or right of set off in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease, title retention agreement or consignment agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to any asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, (d) any netting arrangement, defeasance arrangement or reciprocal fee arrangement, and (e) any other arrangement having the effect of providing security.

     “Loan” is defined in Section 2.1.

     “Material Adverse Change” means any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its subsidiaries taken as a whole, which affect the ability of the Borrower to timely pay any amounts owing under the Credit Agreement or fulfil any other covenant or obligation of a material nature arising under the Financing Documents, or (b) the validity or enforceability of any of the Financing Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.

     “Material Contract” means any contract, licence or agreement (i) to which any Credit Party is a party, (ii) which is material to, or necessary in, the operation of the business of the Credit Parties, and (iii) which the Credit Parties cannot promptly replace by an alternative and comparable contract with comparable commercial terms.

     “Material Indebtedness” means Indebtedness of any one or more of the Credit Parties, other than Indebtedness hereunder, the aggregate principal amount of which exceeds Cdn.$5,000,000.

     “Maturity Date” means April 30, 2006.

     “Minimum Denomination” is defined in Section 2.1.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Mortgage” means a mortgage, debenture, deed of trust, hypothec, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be satisfactory in form and substance to the Collateral Agent.

     “Mortgaged Property” means, initially, each parcel of real property and the improvements thereto owned by a Credit Party and identified as a Mortgaged Property on

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Schedule B, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12.

     “Notes” means the First Notes and the Second Notes.

     “Notice of Borrowing/Continuation/Conversion” means a request by the Borrower to make a Borrowing, or to convert or continue a Loan in accordance with Section 2.2(a) or 2.2(d), as applicable, in the form of the notice set forth in Exhibit “C”.

     “Parent” means Microcell Telecommunications Inc. (incorporated on April 28, 2003, being New Microcell for purposes of the Plan of Arrangement), a CBCA corporation, and its successors and permitted assigns.

     “Parent Articles of Incorporation” means the Articles of Incorporation of the Parent as in effect on the Effective Date.

     “Participant” has the meaning set forth in Section 9.4 (d).

     “Payment Office” means the Administrative Agent’s office located at Suite 1800, South Tower, Royal Bank Plaza, Toronto, Ontario, Attention: Corporate Banking Officers, (or such other office or individual as the Administrative Agent may hereafter designate in writing to the other parties hereto).

     “PCS Network” means the digital mobile PCS network owned and operated by the Borrower.

     “Pension Plan” means any pension benefit plan in respect of which any Credit Party makes or has made contributions in respect of its employees.

     “Perfection Certificate” means a certificate in the form of Exhibit A to the general security agreements provided by the Credit Parties pursuant to Section 4.1(r)(ii), or in any other form approved by the Collateral Agent.

     “Permitted Additional Exit Facility Debt” means secured Indebtedness, in an aggregate principal amount not exceeding an amount equal to Cdn.$75,000,000 less the principal amount of the Commitments hereunder on the Effective Date, incurred by the Borrower at any time after the Effective Date, by way of an increase in the Commitments hereunder.

     “Permitted Investments” means:

(i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of Canada or of any Canadian province), in each case maturing within one year from the date of acquisition thereof;

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(ii)	direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(iii)	investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating from Dominion Bond Rating Service of R-1 (Low) or better, from Moody’s of P-1 or better, or from Standard and Poor’s Corporation of A-1 or better;
(iv)	investments in certificates of deposit, banker’s acceptances and time deposits maturing within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any Lender, any Schedule I chartered bank under the Bank Act (Canada), any domestic office of any chartered bank organized under the laws of Canada which has a combined capital surplus and undivided profits of not less than Cdn.$500,000,000 or by any Affiliate of any such chartered bank provided that the obligations of such Affiliate are unconditionally guaranteed by such chartered bank or any financial institution subject to regulation by the Federal Reserve Board which has a combined capital surplus and undivided profits of not less than U.S.$500,000,000 or by any Affiliate of any such financial institution provided that the obligations of such Affiliate are unconditionally guaranteed by such financial institution;
(v)	fully collateralized repurchase agreements with a term of not more than 270 days for securities described in clauses (i), (ii) and (iii) above and (vi) below (but without regard to the maturity dates described therein) and entered into with a financial institution satisfying the criteria described in clause (iv) above; provided that any repurchase agreement relating to securities with a maturity date of more than 270 days includes a “mark to market” provision which is satisfactory to the Administrative Agent; and
(vi)	marketable and freely-tradeable securities evidencing direct obligations of corporations, hospitals, municipal boards or school boards having, at the date of acquisition, a rating from Dominion Bond Rating Service of A or better, from Moody’s of A-2 or better, or from Standard and Poor’s Corporation of A or better, in each case maturing within 270 days from the date of acquisition thereof.

     “Permitted Liens” means:

(i) Liens in favour of the Tranche B Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche B Credit Agreement, and Liens in favour of the Tranche C Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche C Credit Agreement;

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(ii)	Liens in favour of the Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) for the obligations of the Borrower and other Credit Parties under or pursuant to this Agreement and the other Financing Documents, and Liens granted pursuant to the Pre-Filing Credit Agreement;
(iii)	Liens granted by a Credit Party in favour of another Credit Party in order to secure any of its Indebtedness to the other Credit Party, provided that such Liens are subject to assignment, payment subordination and Lien subordination arrangements satisfactory to the Administrative Agent;
(iv)	Purchase Money Liens and Liens securing Capital Lease Obligations securing Indebtedness to the extent permitted by Section 6.1(g);
(v)	Liens imposed by any Governmental Authority for Taxes not yet due and delinquent or which are being contested in good faith in accordance with Section 5.3, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties;
(vi)	carrier’s, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction and other like Liens arising by operation of Law, arising in the ordinary course of business, which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties, provided that the Credit Parties shall have set aside on its books reserves deemed adequate therefor and not resulting in qualification by auditors;
(vii)	statutory Liens incurred or pledges or deposits made under worker’s compensation, unemployment insurance and other social security legislation;
(viii)	deposits to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature (other than for borrowed money) incurred in the ordinary course of business, and Liens in respect of cash collateral to secure reimbursement obligations in respect of letters of credit (other than Letters of Credit), provided that, in each such case, such deposits or Liens existed on the Effective Date (and have not been extended or renewed after the Effective Date) and the amount of all such deposits and cash collateral shall not exceed Cdn.$4,500,000 in the aggregate at any time;
(ix)	servitudes, easements, rights-of-way, restrictions and other similar encumbrances on real property imposed by Law or incurred in the ordinary course of business and encumbrances consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minor imperfections in title thereto which, in the aggregate, are not material, and which do not in any case materially

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	detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Credit Parties;
(x)	Liens of or resulting from any judgement or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Credit Parties shall at any time in good faith be prosecuting an appeal or proceeding for review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;
(xi)	undetermined or inchoate Liens and charges arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Law or of which written notice has not been duly given in accordance with applicable Law or which although filed or registered, relate to obligations not due or delinquent;
(xii)	the rights reserved to or vested in Governmental Authorities by statutory provisions or by the terms of leases, licenses, franchises, grants or permits, which affect any land, to terminate the leases, licenses, franchises, grants or permits or to require annual or other periodic payments as a condition of the continuance thereof;
(xiii)	securities to public utilities or to any municipalities or Governmental Authorities or other public authority when required by the utility, municipality or Governmental Authorities or other public authority in connection with the supply of services or utilities to the Credit Parties;
(xiv)	Liens or covenants restricting or prohibiting access to or from lands abutting on controlled access highways or covenants affecting the use to which lands may be put; provided that such Liens or covenants do not materially and adversely affect the use of the lands by the Credit Parties;
(xv)	Liens consisting of royalties payable with respect to any asset or property of the Credit Parties existing as of the Effective Date, provided that the existence of any such Lien on any material property or asset of the Credit Parties shall have been disclosed in writing to the Lenders prior to the Effective Date;
(xvi)	statutory Liens incurred or pledges or deposits made in favour of a Governmental Authority to secure the performance of obligations of the Credit Parties under Environmental Laws to which any assets of the Credit Parties are subject;
(xvii)	a Lien granted by a Credit Party to a landlord to secure the payment of arrears of rent in respect of leased property in the Province of Quebec leased from such landlord, provided that such Lien is limited to the assets located at or about such leased property; and

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any extension, renewal or replacement of any of the foregoing; provided that the Liens permitted hereunder shall not be extended to cover any additional Indebtedness of the Credit Parties or their property (other than a substitution of like property), except Liens in respect of Purchase Money Liens and Capital Lease Obligations as permitted by (iv) above.

          “Permitted Subordinated Refinancing Debt” means Indebtedness of the Parent that is used to refinance, replace, defease or refund, in whole or in part, the Indebtedness under the Tranche B Credit Agreement, provided that if, after the incurrence and application of such Indebtedness to refinance, replace, defease or refund, in whole or in part, the Indebtedness under the Tranche B Credit Agreement, there will still be Indebtedness outstanding thereunder, then (i) the principal amount of such Indebtedness will not exceed the principal amount of the Indebtedness so refinanced, replaced, defeased or refunded, plus any other amounts required to be paid in connection therewith and the reasonable and customary fees and expenses incurred in connection therewith, (ii) no material terms applicable to such Indebtedness (including the covenants and events of default) will be materially less favourable to the Parent, the Borrower or the Lenders than the terms that are applicable under the Tranche B Credit Agreement, (iii) the covenants contained therein will be less restrictive than the covenants contained in the Tranche B Credit Agreement, (iv) there will be no principal amortization payments (including any sinking fund therefor) on such Indebtedness before the date which is six months after the “Maturity Date” under the Tranche B Credit Agreement, (v) such Indebtedness will mature at least six months after the “Maturity Date” under the Tranche B Credit Agreement, (vi) such Indebtedness will be Indebtedness of the Parent only, and will not be Guaranteed by the Borrower, (vii) such Indebtedness will be unsecured, (viii) such Indebtedness will accrue interest at a rate determined in good faith by the board of directors of the Parent to be a market rate of interest for such Indebtedness at the time of issuance thereof, and (ix) such Indebtedness will be otherwise on terms and conditions satisfactory to the “Administrative Agent” under the Tranche B Credit Agreement; provided, however, that the restrictions in subparagraphs (ii) and (ix) above shall not apply to pricing of such Indebtedness.

     “Person” includes any natural person, corporation, company, limited liability company, trust, joint venture, association, incorporated organization, partnership, Governmental Authority or other entity.

     “Plan of Arrangement” is defined in Introductory Statement C.

     “PPSA” means the Personal Property Security Act (Ontario), as amended from time to time, or the analogous legislation in any other relevant jurisdiction.

     “Pre-Filing Borrowers” is defined in Introductory Statement A.

     “Pre-Filing Credit Agreement” is defined in Introductory Statement A.

     “Pre-Filing Lenders” is defined in Introductory Statement A.

     “Pre-Filing Loans” is defined in Introductory Statement A.

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     “Pre-Filing Parent” is defined in Introductory Statement A.

     “Prime Rate” means, on any day, the annual rate of interest equal to the greater of (i) the annual rate of interest announced by the Administrative Agent and in effect as its prime rate at its principal office in Toronto, Ontario on such day for determining interest rates on Canadian Dollar-denominated commercial loans in Canada, and (ii) the annual rate of interest equal to the sum of (A) the one-month CDOR Rate in effect on such day, plus (B) 1.00%.

     “Prime Rate Borrowing” means a Borrowing comprised of one or more Prime Rate Loans.

     “Prime Rate Loan” means a Loan denominated in Canadian Dollars which bears interest at a rate based upon the Prime Rate.

     “Purchase Money Lien” means a Lien taken or reserved in personal property to secure payment of all or part of its purchase price, provided that such Lien (i) secures an amount not exceeding the lesser of the purchase price of such personal property and the Fair Market Value of such personal property, (ii) extends only to such personal property and its proceeds, and (iii) is granted prior to or within 30 days after the purchase of such personal property.

     “Quarterly Date” means the last day of each of March, June, September, and December in each calendar year.

     “Radiocom Licences” means all Authorizations issued to any Credit Party to operate wireless PCS communication systems in Canada pursuant to the provisions of the Radiocommunication Act (Canada).

     “Register” has the meaning set forth in Section 9.4(b).

     “Reimbursement Obligations” means, at any date, the obligations of the Borrower then outstanding in respect of the Letters of Credit, to reimburse the Administrative Agent for the account of the Issuing Bank for the amount paid by the Issuing Bank in respect of any drawings under the Letters of Credit.

     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

     “Required Lenders” means, at any time, Lenders with Loans representing more than 50% of the aggregate amount of Loans or, if no Loans are then outstanding, Lenders having Commitments representing more than 50% of the aggregate amount of the Commitments.

     “Responsible Officer” means, with respect to any Person (other than a natural person), the chairman, the president, any vice president, the chief executive officer or the chief operating officer, and, in respect of financial or accounting matters, any Financial Officer of such Person;

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unless otherwise specified, all references herein to a Responsible Officer mean a Responsible Officer of the Borrower.

     “Restricted Payment” shall mean, with respect to any Person, any payment by such Person (i) of any dividends on any of its Equity Securities, (ii) on account of, or for the purpose of setting apart any property for a sinking or other analogous fund for, the purchase, redemption, retirement or other acquisition of any of its Equity Securities or any warrants, options or rights to acquire any such shares, or the making by such Person of any other distribution in respect of any of its Equity Securities, (iii) of any principal of or interest or premium on, or of any amount in respect of, a sinking or analogous fund or defeasance fund for any Indebtedness of such Person ranking in right of payment subordinate to any liability of such Person under the Financing Documents, (iv) of any principal of or of any amount in respect of a sinking or analogous fund or defeasance fund for any Indebtedness of such Person to a shareholder of such Person or to an Affiliate of a shareholder of such Person, (v) in respect of an Investment (other than a Permitted Investment), or (vi) of any management, consulting or similar fee or any bonus payment or comparable payment, or by way of gift or other gratuity, to any Affiliate of such Person or to any director or officer thereof.

     “Rolling Period” means each Fiscal Quarter taken together with the three immediately preceding Fiscal Quarters.

     “Sale/Leaseback Transaction” means any arrangement between a Credit Party and another Person (other than another Credit Party) providing for the leasing by the Credit Party of property which has been or is to be sold or transferred by the Credit Party to such other Person.

     “Sanction Order” means the order of the Canadian Court sanctioning the Plan of Arrangement, dated March 18, 2003, as such order may be amended, modified or supplemented in accordance with the terms of the Plan of Arrangement.

     “Second Notes” means the second subordinated convertible 9% notes issuable by the Parent pursuant to a certain Second Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “Second Preferred Shares” means the second preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Security Documents” means the documents listed in Section 4.1(r).

     “SPNV Shares” means the second preferred non-voting shares in the capital of the Parent.

     “SPV Shares” means the second preferred voting shares in the capital of the Parent.

     “Standby Letter of Credit” means a letter of credit that (i) is used in lieu or in support of performance guarantees or performance, surety or other similar bonds (but expressly excluding stay and appeal bonds) arising in the ordinary course of business, (ii) is used in lieu or in support

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of stay or appeal bonds, (iii) supports the payment of insurance premiums for reasonably necessary casualty insurance carried by the Borrower, or (iv) supports payment or performance for identified purchases or exchanges of products in the ordinary course of business.

     “Subscriber” means an end user of the Borrower’s Fido wireless communication services that has been assigned a mobile identification number by the Borrower and whose mobile identification number has been activated on the Borrower’s billing system or platform such that the Borrower can record and bill the airtime used by that end user. Notwithstanding the foregoing, a Subscriber does not include (a) any mobile identification numbers activated for the Borrower’s agents, sales representatives or employees, or for demonstration purposes or other numbers, which do not generate revenue for the Borrower on local usage; (b) any end user whose mobile identification number has been deactivated or should have been deactivated by the Borrower in accordance with its standard credit policies; or (c) any mobile identification numbers activated for resellers or wholesalers of the Borrower’s services.

     “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, limited partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, limited partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

     “Subsidiary” means any subsidiary of the Parent (other than the Borrower and any Unrestricted Subsidiary).

     “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Credit Parties shall be a Swap Agreement.

     “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, unemployment insurance payments and workers’ compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties with respect thereto,

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imposed by any Governmental Authority (including federal, state, provincial, municipal and foreign Governmental Authorities), and whether disputed or not.

     “Tranche B Credit Agreement” means the credit agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche B Loans, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche B Lenders” means the lenders under the Tranche B Credit Agreement.

     “Tranche B Loans” means the secured Canadian Dollar and U.S. Dollar non-revolving loans to the Borrower in the aggregate principal amount of Cdn.$300,000,000 made by the Tranche B Lenders under the Tranche B Credit Agreement, as contemplated in Section 7.3(c)(ii) of the Plan of Arrangement.

     “Tranche C Credit Agreement” means the credit agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche C Loans, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche C Lenders” means the lenders under the Tranche C Credit Agreement.

     “Tranche C Loans” means the secured non-revolving term loans in the aggregate principal amount of Cdn.$50,000,000 owing by the Borrower to the Tranche C Lenders under the Tranche C Credit Agreement, as contemplated in Section 7.3(c)(ii) of the Plan of Arrangement.

     “Transactions” means the execution, delivery and performance by the Borrower and the Credit Parties of this Agreement and the other Financing Documents.

     “Type”, when used in reference to any Loan, refers to whether the rate of interest on such Loan is determined by reference to the Prime Rate, the Base Rate, the Discount Rate or the Eurodollar Rate.

     “Unrestricted Subsidiary” means Inukshuk Internet Inc. and Telcom Investments Inc. (but in the case of Telcom Investments Inc., only for so long as its sole activity is serving as general partner of GSM Capital Partners), and their respective successors and permitted assigns.

     “U.S. Dollars” and “U.S.$” refer to lawful money of the United States of America.

     “U.S.$ Hedges” is defined in Section 2.18.

     “U.S.$ Loans” means the Loans denominated in U.S. Dollars made hereunder.

     “wholly-owned subsidiary” of a Person means any subsidiary of such Person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the equity or 100% of the ordinary voting power or 100% of the general partnership or membership interests are, at the time any determination is being made, owned, controlled or held

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by such Person or one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person.

1.2      Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “or” is disjunctive; the word “and” is conjunctive. The word “shall” is mandatory; the word “may” is permissive. The words “to the knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by the Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by such Responsible Officer of that Person). Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference to such statute or section as amended, restated or re-enacted from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “this Agreement”, “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement (as the same may be amended, supplemented or otherwise modified or restated from time to time) in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

1.3      Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. All calculations for the purposes of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of this Agreement and used in the preparation of the financial statements of the Borrower and the Credit Parties referred to in Section 5.1. For greater certainty, should the classification given to the First Notes and Second Notes or the First Units and Second Units (as defined in the Plan of Arrangement) change under GAAP, such that the Notes or Units would be treated as debt instead of equity, the parties hereto acknowledge and agree that, for the purposes of calculating, and compliance with, the financial ratios and financial covenants set forth hereunder, the classification given to the said Notes and

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Units as at the date of this Agreement shall be the classification used until the termination of this Agreement. Any financial ratios required to be maintained by the Borrower and the Credit Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement. In the event of a change in GAAP, the Borrower and the Administrative Agent shall negotiate in good faith to revise (if appropriate) such ratios and covenants to reflect GAAP as then in effect, and any new ratio or covenant shall be subject to approval by the Required Lenders. In the event that such negotiation is successful, all calculations thereafter made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of such revision.

1.4      Time. All time references herein shall, unless otherwise specified, be references to local time in Toronto, Ontario. Time is of the essence of this Agreement and the other Financing Documents.

1.5     Permitted Liens. Any reference in any of the Financing Documents to Permitted Liens is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien created by any of the Financing Documents to any Permitted Liens.

1.6      Schedules and Exhibits. The following Schedules and Exhibits are attached to and form part of this Agreement:

SCHEDULES:

Schedule A	- -	Commitments
Schedule B	- -	Disclosed Matters

EXHIBITS:

Exhibit A	- -	Form of Assignment and Assumption
Exhibit B	- -	Form of Intercreditor Agreement
Exhibit C	- -	Form of Notice of Borrowing/Continuation/Conversion

ARTICLE 2
LOANS

2.1      Loans. Subject to the terms and conditions herein, each Lender commits to make loans (each, a “Loan”) to the Borrower from time to time during the period commencing on the Effective Date and ending on the Maturity Date (each such commitment, a

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“Commitment”) in an aggregate principal amount equal to the amount set forth beside such Lender’s name in Schedule A under the heading “Commitment”, provided that any Loans made by any Lender as requested by the Borrower will not result in (i) such Lender’s aggregate Loans and LC Exposure hereunder exceeding such Lender’s Commitment, or (ii) the aggregate Loans and LC Exposure outstanding hereunder exceeding the aggregate Commitments of all Lenders. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, repay and reborrow Loans, by way of Cdn.$ Loans and/or U.S.$ Loans. Subject to Section 2.7(h) and Section 2.8, Cdn.$ Loans shall consist entirely of Prime Rate Loans and B/As (or, as applicable, B/A Equivalent Loans), and U.S.$ Loans shall consist entirely of Base Rate Loans and Eurodollar Loans, in each case as the Borrower may request in accordance herewith. Without limiting any of the foregoing, the Borrower hereby acknowledges and agrees that its liability in respect of the Loans shall be absolute and unconditional. At the commencement of each Contract Period for any B/A (or, as applicable, any B/A Equivalent Loan) or Interest Period for any Eurodollar Loan, such Loan shall be in an aggregate amount that is an integral multiple of $500,000 (the “Minimum Denomination”) and not less than $5,000,000, in each case measured in the currency of such Loan. Cdn.$ Loans and U.S.$ Loans of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 5 B/A Borrowings or 5 Eurodollar Borrowings outstanding.

2.2     Borrowing, Continuation, Conversion and Roll-Over Elections.

(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. To request a Borrowing, or to continue or convert an existing Borrowing (which are also subject to the requirements in Section 2.2(d) below), the Borrower shall notify the Administrative Agent of such request by telephone or by written Notice of Borrowing/Continuation/Conversion substantially in the form of Exhibit C, (i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Toronto time, three Business Days before the date of the proposed Borrowing, (ii) in the case of a B/A Borrowing, not later than 11:00 a.m., Toronto time, two Business Days before the date of the proposed Borrowing, or (iii) in the case of a Prime Rate Borrowing or a Base Rate Borrowing, not later than 11:00 a.m., Toronto time, one Business Day before the date of the proposed Borrowing; provided that any such notice of a Prime Rate Borrowing to finance the reimbursement of an LC Disbursement may be given no later than 10:00 a.m., Toronto time, on the date of the proposed Borrowing. Each such telephone request or written Notice of Borrowing/Continuation/Conversion shall be irrevocable, and any telephone request shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Notice of Borrowing/Continuation/Conversion in the form of Exhibit C, signed by the Borrower, by 12:00 noon on the date of such telephone request. The Administrative Agent and each Lender are entitled to rely upon and act upon any telephone request or written Notice of Borrowing/Continuation/Conversion given or purportedly given by the Borrower, and the Borrower hereby waives the right to dispute the authenticity and validity

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	of any such transaction once the Administrative Agent or any Lender has advanced funds, accepted a B/A or made a B/A Equivalent Loan based upon such telephone request or written Notice of Borrowing/Continuation/Conversion.
(b)	Each telephone request or written Notice of Borrowing/Continuation/Conversion shall specify the following information:

(i)	the aggregate amount of the requested Borrowing;
(ii)	the date of such Borrowing, which shall be a Business Day;
(iii)	whether such Borrowing is to be a Prime Rate Borrowing, a B/A Borrowing, a Base Rate Borrowing or a Eurodollar Borrowing;
(iv)	in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”, and in the case of a B/A Borrowing, the initial Contract Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Contract Period”; and
(v)	the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 5.17.

(c)

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a Prime Rate Borrowing (if denominated in Canadian Dollars) or a Base Rate Borrowing (if denominated in U. S. Dollars). If no currency is specified, the Borrowing shall be denominated in Canadian Dollars. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of 30 days’ duration. If no Contract Period is specified with respect to any requested B/A Borrowing, then the Borrower shall be deemed to have selected a Contract Period of 30 days’ duration. Promptly following receipt of a telephone request or a written Notice of Borrowing/Continuation/Conversion, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

(d)

Each Borrowing initially shall be of the Type specified in the applicable Notice of Borrowing/Continuation/Conversion. Thereafter, the Borrower may:

(i) elect, as of any Business Day, in the case of a Prime Rate Borrowing, to convert any Prime Rate Loans (or any part thereof in an amount not less than Cdn.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof) into another type of Borrowing;

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(ii)	elect, as of the last day of the applicable Contract Period, to roll over any B/A Borrowings which have Contract Periods expiring on such day (or any part thereof in an amount not less than Cdn.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof), or to convert such B/A Borrowing into another type of Borrowing;
(iii)	elect, as of any Business Day, in the case of Base Rate Borrowings, to convert any Base Rate Borrowing (or any part thereof in an amount not less than U.S.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof) into a another type of Borrowing; or

(iv) elect, as of the last day of the applicable Interest Period, to continue any Eurodollar Borrowings which have Interest Periods expiring on such day (or any part thereof in an amount not less than U.S.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof), or to convert such Eurodollar Borrowings into another type of Borrowing;

provided that (i) if at any time the aggregate amount of Eurodollar Loans with respect to any Interest Period is reduced, by payment, prepayment or conversion, to less than U.S.$5,000,000, such Eurodollar Loans shall automatically convert into Base Rate Loans upon the expiration of the then current Interest Period, and (ii) B/A Borrowings may not be rolled over if the amount remaining, after partial conversion into Prime Rate Loans upon the expiration of the applicable Contract Period, is less than Cdn.$5,000,000, and such amount remaining shall automatically convert into Prime Rate Loans upon the expiration of such Contract Period ; provided further that if the notice shall fail to specify the duration of the Contract Period or Interest Period with respect to any B/A Borrowing or Eurodollar Loan, such Contract Period or Interest Period, as applicable, shall be one month. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans, with respect to which the notice was given, held by each Lender.

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2.3      Interest and Acceptance Fees.

(a)	Each Prime Rate Loan shall bear interest (computed in arrears on the basis of the actual number of days elapsed over a year of 365 days or 366 days, as the case may be) at a rate per annum equal to the Prime Rate plus the Applicable Margin. Each Base Rate Loan shall bear interest (computed in arrears on the basis of the actual number of days elapsed over a year of 365 days or 366 days, as the case may be) at a rate per annum equal to the Base Rate plus the Applicable Margin. Each Eurodollar Loan shall bear interest (computed in arrears on the basis of the actual number of days in the relevant Interest Period over a year of 360 days) at the Eurodollar Rate for the Interest Period in effect for such Eurodollar Loan plus the Applicable Margin.
(b)	The Loans comprising each B/A Borrowing shall be subject to an Acceptance Fee payable on the first day of the Contract Period applicable thereto.
(c)	Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan.
(d)	Accrued interest on each Loan (other than B/A Borrowings) shall be payable in arrears on each Interest Payment Date and, in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.
(e)	All interest hereunder shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Prime Rate, Base Rate, Eurodollar Rate or Discount Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
(f)	For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.
(g)	If any provision of this Agreement would oblige the Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt

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by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by Law or so result in a receipt by that Lender of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:

(i)	first, by reducing the amount or rate of interest or the amount or rate of any Acceptance Fee required to be paid to the affected Lender under this Section 2.3; and
(ii)	thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid to the affected Lender which would constitute interest for purposes of Section 347 of the Criminal Code (Canada).

2.4                Repayment of Loans; Fees.

(a)	The Borrower hereby unconditionally promises to pay to the Administrative Agent, for the account of the Lenders, the unpaid principal amount of all of the Loans on the Maturity Date.
(b)	The Borrower shall pay to the Administrative Agent for the account of and distribution to each Lender in accordance with its Applicable Percentage a standby fee for the period commencing on the Effective Date to and including the Maturity Date (or such earlier date as the Commitments shall have been terminated entirely) computed at a rate of 1.00% per annum on the average daily excess amount of the Commitments over the aggregate amount of outstanding Loans. These standby fees shall be payable in arrears on each Quarterly Date, commencing on the first Quarterly Date to occur after the Effective Date, and on the date on which the Commitments terminate. All standby fees shall be computed on the basis of a year of 365 or 366 days, as the case may be, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c)	The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon in writing between the Borrower and the Administrative Agent.
(d)	The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the rate of 3.50% per annum on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the

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Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees accrued through and including each Quarterly Date shall be payable on the first Business Day following each Quarterly Date, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this Section 2.4(d) shall be payable within 10 days after demand. All participation fees shall be computed on the basis of a year of 365 days or 366 days, as the case may be, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(e)

All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of standby fees and participation fees, to the Lenders. Fees paid shall not be refundable except in the case of manifest error in the calculation of any fee payment.

2.5                Evidence of Debt.

(a)	Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender hereunder, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b)	The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and, in the cases of B/A Borrowings and Eurodollar Borrowings, the relevant Contract Period or Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(c)	The entries made in the accounts maintained pursuant to Sections 2.5(a) and (b) shall be conclusive evidence (absent manifest error) of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the

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	Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. In the event of a conflict between the records maintained by the Administrative Agent and any Lender, the records maintained by the Administrative Agent shall govern.
(d)	Any Lender may request that Loans (other than B/As) made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.4) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
(e)	If any payment is required to be made on a day which is not a Business Day, such payment shall be payable on the next Business Day.

2.6               Prepayments of Loans.

(a) Voluntary Prepayments. The Borrower may, at its option, at any time and from time to time, prepay the Loans, in whole or in part, upon giving three Business Days’ prior written notice to the Administrative Agent; provided, however, that the Borrower may not prepay any B/A (or, as applicable, any B/A Equivalent Loan) but may defease any B/A (or, as applicable, any B/A Equivalent Loan) in accordance with Section 2.7(l). Such notice shall specify the date and amount of prepayment and whether the prepayment is of Prime Rate Loans, Base Rate Loans, Eurodollar Loans or any combination thereof, and, in each case if a combination thereof, the principal amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s Applicable Percentage of such prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to Section 2.10 and accrued interest to such date on the amount prepaid in accordance with Section 2.3. Each voluntary prepayment of any Cdn.$ Loan shall be in a minimum principal amount of Cdn.$1,000,000 and in an integral multiple of Cdn.$100,000, and each voluntary prepayment of any U.S.$ Loan shall be in a minimum principal amount of U.S.$1,000,000 and in an integral multiple of U.S.$100,000. In addition, the Borrower may, at its option, at any time and from time to time, cancel permanently, in whole or in part, any unused portion of the Commitments, upon giving three Business Days’ prior written notice to the Administrative Agent.

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(b)	Notice by Borrower. Each notice provided by the Borrower hereunder in respect of any payment hereunder shall be irrevocable and shall specify the payment date and the principal amount of each Loan or portion thereof to be prepaid.
(c)	Notice by Administrative Agent. Upon receipt of a notice of payment pursuant to this Section 2.6, the Administrative Agent shall promptly notify each affected party of the contents thereof and of such party’s rateable share of such payment.

2.7                Banker’s Acceptances.

(a)	Subject to the terms and conditions of this Agreement, the Borrower may request a B/A Borrowing by presenting drafts for acceptance and purchase as B/As by the Lenders.
(b)	No Contract Period with respect to a B/A Borrowing shall extend beyond the Maturity Date.
(c)	To facilitate the availment of B/A Borrowings, the Borrower hereby appoints each Lender as its attorney to sign and endorse on its behalf (in accordance with a Notice of Borrowing/Continuation/Conversion relating to a B/A Borrowing), in handwriting or by facsimile or mechanical signature as and when deemed necessary by such Lender, blank forms of B/As in the form requested by such Lender. In this respect, it is each Lender’s responsibility to maintain an adequate supply of blank forms of B/As for acceptance under this Agreement. The Borrower recognizes and agrees that all B/As signed and/or endorsed by a Lender on behalf of the Borrower shall bind the Borrower as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officers of the Borrower. Each Lender is hereby authorized (in accordance with a Notice of Borrowing/Continuation/Conversion relating to a B/A Borrowing) to issue such B/As endorsed in blank in such face amounts as may be determined by such Lender; provided that the aggregate amount thereof is equal to the aggregate amount of B/As required to be accepted and purchased by such Lender. No Lender shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except the gross negligence or wilful misconduct of the Lender or its officers, employees, agents or representatives. Each Lender shall maintain a record with respect to B/As (i) received by it in blank hereunder, (ii) voided by it for any reason, (iii) accepted and purchased by it hereunder, and (iv) cancelled at their respective maturities. On request by or on behalf of the Borrower, a Lender shall cancel all forms of B/A which have been pre-signed or pre-endorsed on behalf of the Borrower and which are held by such Lender and are not required to be issued in accordance with the Borrower’s irrevocable notice. Alternatively, the Borrower agrees that, at the request of the Administrative Agent, the Borrower shall deliver to the Administrative Agent a “depository note” which complies with the requirements of the Depository Bills and Notes Act (Canada), and consents to the deposit of any such depository note

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	in the book-based debt clearance system maintained by the Canadian Depository for Securities.
(d)	Drafts of the Borrower to be accepted as B/As hereunder shall be signed as set forth in this Section 2.7. Notwithstanding that any person whose signature appears on any B/A may no longer be an authorized signatory for any Lender or the Borrower at the date of issuance of a B/A, such signature shall nevertheless be valid and sufficient for all purposes as if such authority had remained in force at the time of such issuance and any such B/A so signed shall be binding on the Borrower.
(e)	Promptly following receipt of a Notice of Borrowing/Continuation/Conversion specifying a Borrowing by way of B/As, the Administrative Agent shall so advise the Lenders and shall advise each Lender of the aggregate face amount of the B/As to be accepted by it and the applicable Contract Period (which shall be identical for all Lenders). The aggregate face amount of the B/As to be accepted by the Lenders shall be in a minimum aggregate amount of Cdn.$5,000,000 and shall be a whole multiple of Cdn.$500,000, and such face amount shall be in the Lenders’ pro rata portions of such Loan, provided that the Administrative Agent may in its sole discretion increase or reduce any Lender’s portion of such B/A to the nearest Cdn.$100,000 without affecting the aggregate Loan exposure of any Lender.
(f)	Upon acceptance of a B/A by a Lender, such Lender shall purchase, or arrange for the purchase of, each B/A from the Borrower at the Discount Rate for such Lender applicable to such B/A accepted by it and provide to the Administrative Agent the Discount Proceeds for the account of the Borrower. The Acceptance Fee payable by the Borrower to a Lender under Section 2.3(b) in respect of each B/A accepted by such Lender shall be set off against the Discount Proceeds payable by such Lender under this Section 2.7.
(g)	Each Lender may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all B/As accepted and purchased by it.
(h)	If a Lender is not a chartered bank under the Bank Act (Canada) or if a Lender notifies the Administrative Agent in writing that it is otherwise unable to accept Banker’s Acceptances, such Lender will, instead of accepting and purchasing Banker’s Acceptances, make a Loan (a “B/A Equivalent Loan”) to the Borrower in the amount and for the same term as the draft which such Lender would otherwise have been required to accept and purchase hereunder. Each such Lender will provide to the Administrative Agent the Discount Proceeds of such B/A Equivalent Loan for the account of the Borrower. Each such B/A Equivalent Loan will bear interest at the same rate which would result if such Lender had accepted (and been paid an Acceptance Fee) and purchased (on a discounted basis) a Banker’s Acceptance for the relevant Contract Period (it being the

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	intention of the parties that each such B/A Equivalent Loan shall have the same economic consequences for the Lenders and the Borrower as the Banker’s Acceptance which such B/A Equivalent Loan replaces). All such interest shall be paid in advance on the date such B/A Equivalent Loan is made, and will be deducted from the principal amount of such B/A Equivalent Loan in the same manner in which the Discount Proceeds of a Banker’s Acceptance would be deducted from the face amount of the Banker’s Acceptance. Subject to repayment requirements, on the last day of the relevant Contract Period for such B/A Equivalent Loan, the Borrower shall be entitled to convert each such B/A Equivalent Loan into another Type of Loan, or to roll over each such B/A Equivalent Loan into another B/A Equivalent Loan, all in accordance with the applicable provisions of this Agreement.
(i)	With respect to each B/A Borrowing, at or before 10:00 a.m. two Business Days before the last day of the Contract Period of such B/A (or, as applicable, such B/A Equivalent Loan), the Borrower shall notify the Administrative Agent by irrevocable telephone notice, followed by a written Notice of Borrowing/Continuation/Conversion by 12:00 noon on the same day, if the Borrower intends to issue B/As or roll over maturing B/A Equivalent Loans, as applicable, on such last day of the Contract Period to provide for the payment of such maturing B/A (or, as applicable, such B/A Equivalent Loan). If the Borrower fails to notify the Administrative Agent of its intention to issue B/As or roll over maturing B/As or B/A Equivalent Loans, as applicable, on such last day of the Contract Period, the Borrower shall provide payment to the Administrative Agent on behalf of the Lenders of an amount equal to the aggregate face amount of such B/As (or, as applicable, such B/A Equivalent Loans) on the last day of the Contract Period of such B/As or B/A Equivalent Loans. If the Borrower fails to make such payment, such maturing B/As (or, as applicable, such B/A Equivalent Loans) shall be deemed to have been converted on the last day of the Contract Period into a Prime Rate Loan in an amount equal to the face amount of such B/As or B/A Equivalent Loans.
(j)	The Borrower waives presentment for payment and any other defence to payment of any amounts due to a Lender in respect of a B/A accepted and purchased by it pursuant to this Agreement which might exist solely by reason of such B/A being held, at the maturity thereof, by such Lender in its own right, and the Borrower agrees not to claim any days of grace if such Lender, as holder, sues the Borrower on the B/A for payment of the amount payable by the Borrower thereunder. On the last day of the Contract Period of a B/A, or such earlier date as may be required or permitted pursuant to the provisions of this Agreement, the Borrower shall pay the Lender that has accepted and purchased such B/A the full face amount of such B/A and, after such payment, the Borrower shall have no further liability in respect of such B/A and such Lender shall be entitled to all benefits of, and be responsible for all payments due to third parties under, such B/A.

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(k)

If a Lender grants a participation in a portion of its rights under this Agreement to a Participant under Section 9.4(d), then, in respect of any B/A Borrowing, a portion thereof may, at the option of such Lender, be by way of Banker’s Acceptances accepted by such Participant. In such event, the Borrower shall upon request of the Administrative Agent or the Lender granting the participation execute and deliver a form of Banker’s Acceptance undertaking in favour of such Participant, having terms substantially similar to this Section 2.7, for delivery to such Participant.

(l)

Except as required by any Lender upon the occurrence of an Event of Default, no B/A Borrowing may be repaid by the Borrower prior to the expiry date of the Contract Period applicable to such B/A Borrowing; provided, however, that the Borrower may defease any B/A Borrowing by depositing with the Administrative Agent an amount that is sufficient to repay such B/A Borrowing on the expiry date of the Contract Period applicable to such B/A Borrowing.

2.8                Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Loan:

(a)	the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or
(b)	the Administrative Agent is advised by the Required Lenders that the Eurodollar Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Eurodollar Loans for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Notice of Borrowing/Continuation/Conversion that requests the conversion of any Loan to, or continuation of any Loan as, a Eurodollar Loan shall be ineffective, and (ii) if any Notice of Borrowing/Continuation/Conversion requests a Eurodollar Loan, such Loan shall be made as a Base Rate Loan.

2.9               Increased Costs; Illegality.

(a) If any Change in Law shall:

(i)	impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or
(ii)	impose on any Lender, the Issuing Bank or the London interbank market any other condition affecting this Agreement (including the imposition

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on any Lender of, or any change to, any Indemnified Tax or other charge with respect to its Eurodollar Loans or any Letter of Credit or participation therein, or its obligation to make Eurodollar Loans or to issue any Letter of Credit);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan or to increase the cost to such Lender or the Issuing Bank of participating in any Letter of Credit or any Loan or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

(b)	If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s holding company or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy and such Lender’s desired return on capital), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c)	A certificate of the Issuing Bank or a Lender setting forth the amount or amounts necessary to compensate such Lender as specified in Sections 2.9(a) or (b), together with a brief description of the Change of Law, shall be delivered to the Borrower, and shall be conclusive absent manifest error. In preparing any such certificate, a Lender shall be entitled to use averages and to make reasonable estimates, and shall not be required to “match contracts” or to isolate particular transactions. The Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.
(d)	Failure or delay on the part of the Issuing Bank or any Lender to demand compensation pursuant to this Section 2.9 shall not constitute a waiver of such Lender’s right to demand such compensation.
(e)	In the event that any Lender shall have determined (which determination shall be reasonably exercised and shall, absent manifest error, be final, conclusive and binding upon all parties) at any time that the making or continuance of any

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Eurodollar Loan has become unlawful or materially restricted as a result of compliance by such Lender in good faith with any Change in Law, or by any applicable guideline or order (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), then, in any such event, such Lender shall give prompt notice (by telephone and confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to the other Lenders). Upon the giving of the notice to the Borrower referred to in this Section 2.9(e), the Borrower’s right to request (by continuation, conversion or otherwise), and such Lender’s obligation to make, Eurodollar Loans shall be immediately suspended, and thereafter any requested conversion into, or continuation of, Eurodollar Loans shall, as to such Lender only, be deemed to be a request for a Base Rate Loan, and if the affected Eurodollar Loan or Loans are then outstanding, the Borrower shall immediately, or if permitted by applicable Law, no later than the date permitted thereby, upon at least one Business Day prior written notice to the Administrative Agent and the affected Lender, convert each such Eurodollar Loan into a Base Rate Loan, provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.9(e).

2.10                Break Funding Payments. In the event of (a) the failure by the Borrower to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered by the Borrower pursuant hereto, (b) the payment or conversion of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), or (c) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.14, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Eurodollar Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.10 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

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2.11               Taxes.

(a)	Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11), the Administrative Agent or relevant Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deduction been made, (ii) the Borrower shall make such deduction, and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.
(b)	In addition to the payments by the Borrower required by Section 2.11(a), the Borrower shall pay any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement to the relevant Governmental Authority in accordance with applicable Law.
(c)	The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d)	As soon as practicable after any payment of Indemnified Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)	In the event that the Borrower is required by applicable Law to deduct any Indemnified Taxes from any payment hereunder, any Foreign Lender that is entitled to an exemption from or reduction of withholding Tax under the law of

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the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), if requested to do so by the Borrower, at the time or times prescribed by applicable Law, such properly completed and executed documentation prescribed by applicable Law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.

2.12                Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)	The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, amounts payable under any of Sections 2.9, 2.10 or 2.11, or otherwise) prior to 12:00 noon, Toronto time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension, provided that, in the case of any payment with respect to a Eurodollar Loan, the date for payment shall be advanced to the next preceding Business Day if the next succeeding Business Day is in a subsequent calendar month. All payments under this Section 2.12 in respect of Eurodollar Loans and Base Rate Loans shall be made in U.S. Dollars. All other payments under this Section 2.12 shall be made in Canadian Dollars.
(b)	If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of any amounts payable to the Administrative Agent pursuant to Section 9.3, (ii) second, towards payment of interest and fees then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, towards payment of unreimbursed LC Disbursements and principal then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c)	If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans, and

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	participation in LC Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans, and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders rateably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) this Section 2.12(c) shall not apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to any Credit Party (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)	Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the applicable default rate for Prime Rate Loans (if such amount is denominated in Canadian Dollars) or the applicable default rate for Base Rate Loans (if such amount is denominated in U.S. Dollars).
(e)	If the Issuing Bank or any Lender shall fail to make any payment required to be made by it pursuant to Section 2.12(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of the Issuing Bank or such Lender to satisfy the Issuing Bank or such Lender’s obligations under such Section 2.12(d) until all such unsatisfied obligations are fully paid.

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2.13                Currency Indemnity. If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement or any other Financing Document, it becomes necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or under any other Financing Document in any currency other than the Judgment Currency (the “Currency Due”), then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgment is given. For this purpose “rate of exchange” means the rate at which the Administrative Agent is able, on the relevant date, to purchase the Currency Due with the Judgment Currency in accordance with its normal practice at its head office in Toronto, Ontario. In the event that there is a change in the rate of exchange prevailing between the Business Day before the day on which the judgment is given and the date of receipt by the Administrative Agent of the amount due, the Borrower will, on the date of receipt by the Administrative Agent, pay such additional amounts, if any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount received by the Administrative Agent on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on the date of receipt by the Administrative Agent is the amount then due under this Agreement or such other Financing Document in the Currency Due. If the amount of the Currency Due which the Administrative Agent is so able to purchase is less than the amount of the Currency Due originally due to it, the Borrower shall indemnify and save the Administrative Agent and the Lenders harmless from and against all loss or damage arising as a result of such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Financing Documents, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Administrative Agent from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due under this Agreement or any other Financing Document or under any judgment or order.

2.14                Mitigation Obligations; Replacement of Lenders.

(a)

If any Lender requests compensation under Section 2.9, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, then such Lender shall use reasonable efforts to designate a different lending office for booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.9 or 2.11, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)

If any Lender requests compensation under Section 2.9, or if the Borrower is required to pay any additional amount to any Lender or any Governmental

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Authority for the account of any Lender pursuant to Section 2.11, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent and the Issuing Bank, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.9 or payments required to be made pursuant to Section 2.11, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if an Event of Default has occurred and is continuing or if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

2.15                Letters of Credit.

(a)

General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit, in amount not to exceed $5,000,000 (less the amount of any deposits and cash collateral provided as permitted under paragraph (viii) of the definition of Permitted Liens) in the aggregate, as an availment of the Commitments, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time up to the Maturity Date. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of Letter of Credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall govern.

(b)

Notice of Issuance, Amendment, Renewal, Extension, Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (at least five Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended,

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	the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with Section 2.15(c)), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a Letter of Credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit, the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, the aggregate LC Exposure shall not exceed Cdn.$5,000,000.
(c)	Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the date that is five Business Days prior to the Maturity Date.
(d)	Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in Section 2.15(e), or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.15(d) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e)	Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Toronto time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., Toronto time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, Toronto time, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., Toronto time, on the day of receipt, or

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(ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.2 that such payment be financed with a Prime Rate Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Prime Rate Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.15(e), the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this Section 2.15(e) to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of Prime Rate Borrowings as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f)

Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in Section 2.15(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.15, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit

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	(including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable Law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g)	Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h)	Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate then applicable to Prime Rate Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to Section 2.15(e), then this Section 2.15(h) shall apply. Interest accrued pursuant to this Section 2.15(h) shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to this Section 2.15(h) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

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(i)

Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank. From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter, and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j)

Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this Section 2.15(j), the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 7.1(h), (i) or (j). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such

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amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

2.16     Indemnity for Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Loans, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Loans or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender and the Borrower shall be liable to pay to the Administrative Agent and the Lenders, and hereby does indemnify the Administrative Agent and the Lenders and holds the Administrative Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.16 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Administrative Agent’s and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.16 shall survive the termination of this Agreement.

2.17     Increase in Commitments; Permitted Additional Exit Facility Debt. At any time after the Effective Date, and provided that no Default or Event of Default has occurred and is continuing, the Borrower may request that one or more of the then-existing Lenders or any other Person acceptable to the Administrative Agent provide to the Borrower Permitted Additional Exit Facility Debt, to be effected by way of an increase in the Commitments hereunder; provided that the amount of Permitted Additional Exit Facility Debt shall not exceed Cdn.$75,000,000, less the principal amount of Commitments existing on the Effective Date. Notwithstanding anything to the contrary in this Agreement, the incurrence of Permitted Additional Exit Facility Debt shall not require the consent of any Lender other than any Lender providing such Permitted Additional Exit Facility Debt, but no Lender shall have any obligation to participate in any Permitted Additional Exit Facility Debt unless it agrees to do so in its sole discretion. Any increase in the Commitments hereunder shall be documented by way of an amendment to this Agreement in form and substance satisfactory to the Administrative Agent.

2.18     Hedging Arrangements. The Borrower may, at its discretion, enter into Swap Agreements with the Lenders (or their respective Affiliates) solely to manage currency exposure assumed pursuant to the U.S.$ loans under the Tranche B Credit Agreement, and not for any other purpose (the “U.S.$ Hedges”). If established, the U.S.$ Hedges shall have notional amounts not exceeding Cdn.$100,000,000 at any time (in the aggregate for all such Swap Agreements) and shall have termination dates not later than six months after the date of the relevant Swap Agreement. Any obligations of the Borrower under any U.S.$ Hedges may be secured by the security instruments created in favour of the Lenders, pari passu with the other obligations of the Borrower under this Agreement. Any credit exposure under the U.S.$ Hedges

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(as determined by the Administrative Agent, in its sole discretion) shall be deducted from the amounts otherwise available to be borrowed under the Commitments. Notwithstanding anything to the contrary in this Agreement, no Lender (and no Affiliate of any Lender) shall have any obligation to participate in the U.S.$ Hedges unless it agrees to do so in its sole discretion.

2.19     Existing Security. The Borrower and the Parent confirm that, in accordance with paragraph 27 of the Sanction Order, (a) the Liens granted pursuant to the Pre-Filing Credit Agreement (the “Existing Security”) shall remain in place and be reserved pending the execution, delivery and registration of the Security Documents pursuant to this Agreement and the delivery of all required consents to such Security Documents, and (b) no steps to perfect or reperfect (including registration or publication of any hypothecs) the Existing Security, other than any steps which are required generally under applicable provincial laws to maintain perfection of security interests (including registration or publication of any hypothecs), shall be required to secure the obligations of the Borrower and the Parent hereunder.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

Each of the Borrower and the Parent represents and warrants to the Administrative Agent, the Issuing Bank and the Lenders that:

3.1     Organization; Powers. The Borrower and each other Credit Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now and formerly conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

3.2     Authorization; Enforceability. The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, shareholder action. This Agreement and the other Financing Documents have been duly executed and delivered by the Borrower and each other Credit Party (as applicable) and constitute legal, valid and binding obligations of the Borrower and each other Credit Party (as applicable), enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganisation, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.3     Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except those disclosed in Schedule B, (b) will not violate any applicable Law or the charter, by-laws or other organizational documents of the Borrower or any Credit Party or any order of any Governmental Authority, (c) will not violate or result in a default under any

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indenture, agreement or other instrument binding upon the Borrower or any Credit Party or their respective assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Credit Party, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Credit Party, except for any Lien arising in favour of the Collateral Agent, for the benefit of the Lenders, under the Financing Documents.

3.4     Financial Condition; No Material Adverse Effect. All information (including the information contained in the Information Circular and all financial statements) pertaining to the Parent, its Subsidiaries and any Unrestricted Subsidiary (other than projections) that has been or will be made available to the Lenders or the Administrative Agent by the Parent or any representative of the Parent and its Subsidiaries, taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made. The projections that have been or will be made available to the Lenders or the Administrative Agent by the Parent or the Borrower or any representative of the Parent or the Borrower have been or will be prepared in good faith based upon assumptions that were reasonable when made.

3.5     Litigation.

(a)

There are no actions, suits or proceedings (including any Tax-related matter) by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any other Credit Party (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect other than the matters disclosed in Schedule B, or (ii) that involve this Agreement, any other Financing Document, or the Transactions.

(b)

Except for the matters disclosed in Schedule B and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any other Credit Party (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability, or (iv) knows of any basis for any Environmental Liability.

3.6     Compliance with Laws and Agreements. Except as set forth in Schedule “B”, the Borrower and each other Credit Party is in compliance with all Laws applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Neither the Borrower nor any other Credit Party has violated or failed to obtain any Authorization necessary to the ownership of any of its

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property or assets or the conduct of its business, which violation or failure could reasonably be expected to have (in the event that such a violation or failure were asserted by any Person through appropriate action) a Material Adverse Effect.

3.7     Taxes. The Borrower and each other Credit Party has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it (including all instalments with respect to the current period) and has made adequate provisions for Taxes for the current period, except Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such other Credit Party, as applicable, has set aside on its books adequate reserves.

3.8     Titles to Real Property. Each Credit Party has indefeasible fee simple title to its respective owned real properties, and with respect to leased real properties, indefeasible title to the leasehold estate with respect thereto, pursuant to valid and enforceable leases, free and clear of all Liens except Permitted Liens. All real property owned by each Credit Party as at the Effective Date is described in Schedule B. All real property lease agreements pursuant to which any Credit Party leases any office space or switch room premises as at the Effective Date are described in Schedule B.

3.9     Titles to Personal Property. Each Credit Party has valid indefeasible title to all of its respective personal property, free and clear of all Liens except Permitted Liens.

3.10     Pension Plans. As of the Effective Date, no Credit Party has established or maintains a Pension Plan.

3.11     Disclosure. Each Credit Party has made available to the Lenders all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

3.12     Defaults. Except as set forth in Schedule “B”, no Credit Party is in default nor has any event or circumstance occurred which, but for the passage of time or the giving of notice, or both, would constitute a default (in either case in any respect that would have a Material Adverse Effect) under any loan or credit agreement, indenture, mortgage, deed of trust, security agreement or other instrument or agreement evidencing or pertaining to any Indebtedness of any Credit Party, or under any Material Contract.

3.13     Casualties; Taking of Properties. Since December 31, 2002, neither the business nor the properties of the Borrower or any other Credit Party have been affected in a manner that has had, or could reasonably be expected to have, a Material Adverse Effect as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by any domestic or foreign Governmental Authority, riot, activities of armed forces, or acts of God or of any public enemy.

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3.14     Subsidiaries. As of the Effective Date, the Borrower has no subsidiaries other than those listed in Schedule B. As of the Effective Date, the Parent has no subsidiaries except the Borrower, the Pre-Filing Parent and the subsidiaries of the Parent listed in Schedule B.

3.15     Insurance. All policies of fire, liability, workers’ compensation, casualty, flood, business interruption and other forms of insurance owned or held by each of the Credit Parties are: sufficient for compliance with all requirements of applicable Law and of all Material Contracts; are valid, outstanding and enforceable policies; provide adequate insurance coverage in at least such amounts and against at least such risks (but including in any event public liability) as are usually insured against in the same general area by companies engaged in the same or a similar business for the assets and operations of each Credit Party; and will not in any way be affected by, or terminate or lapse by reason of, the Transactions. All such material policies are in full force and effect, all premiums with respect thereto have been paid in accordance with their respective terms, and no notice of cancellation or termination has been received with respect to any such policy. No Credit Party maintains any self-insurance program or deductible limits with respect to its assets or operations or material risks with respect thereto in excess of Cdn.$1,000,000 (or U.S.$1,000,000 in the case of directors and officers liability coverage). The certificate of insurance delivered to the Lenders pursuant to Section 4.1(i) contains an accurate and complete description of all material policies of insurance owned or held by each Credit Party on the Effective Date.

3.16     Material Contracts. Schedule B sets out each Material Contract in effect as at the Effective Date. A copy of each such Material Contract (each of which copies is true and complete except for provisions thereof which by the express terms thereof may only be disclosed to authorized representatives of the parties thereto) has been delivered to the Administrative Agent. Each Material Contract is in full force and effect. No Credit Party is in default under or in breach of any term or condition of any Material Contract that would have, either individually or in the aggregate, a Material Adverse Effect, nor is any Credit Party aware of any default under or breach of any term or condition of any Material Contract by any other party thereto that would have a Material Adverse Effect. No Material Contract contains any material provisions which impose burdensome or onerous obligations on any Credit Party which are inconsistent with prudent commercial activity by each Credit Party.

3.17     Environmental Matters. Except as disclosed to the Lenders in Schedule B:

(a) Environmental Laws, etc. Neither any property of any Credit Party nor the operations conducted thereon violate any applicable order of any court or Governmental Authority or Environmental Laws, which violation could reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.

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(b)	Notices, Permits, etc. All notices, permits, licenses or similar authorizations, if any, required to be obtained or filed by any Credit Party in connection with the operation or use of any and all property of any Credit Party, including but not limited to past or present treatment, transportation, storage, disposal or release of Hazardous Materials into the environment, have been duly obtained or filed, except to the extent the failure to obtain or file such notices, permits, licenses or similar authorizations could not reasonably be expected to have a Material Adverse Effect, or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(c)	Hazardous Substances Carriers. To the knowledge of each of the Credit Parties, all Hazardous Materials generated at any and all property of any Credit Party have been treated, transported, stored and disposed of only in accordance with Environmental Law applicable to them, except to the extent the failure to have such Hazardous Materials transported, treated or disposed by such carriers could not reasonably be expected to have a Material Adverse Effect, and only at treatment, storage and disposal facilities maintaining valid permits under applicable Environmental Law, which carriers and facilities have been and are operating in compliance with such permits, except to the extent the failure to have such Hazardous Materials treated, transported, stored or disposed at such facilities, or the failure of such carriers or facilities to so operate, could not reasonably be expected to have a Material Adverse Effect or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(d)	Hazardous Materials Disposal. Each Credit Party has taken all reasonable steps necessary to determine and has determined that no Hazardous Materials have been disposed of or otherwise released and there has been no threatened release of any Hazardous Materials on or to any property of any Credit Party other than in compliance with Environmental Laws, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(e)	No Contingent Liability. The Credit Parties have no material contingent liability in connection with any release or threatened release of any Hazardous Materials into the environment other than such contingent liabilities at any one time and from time to time which could not reasonably be expected to exceed the

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applicable insurance coverage and for which adequate reserves for the payment thereof as required by GAAP have been provided, or which could reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such release or threatened release.

The representations and warranties in this Section 3.17 do not extend to transmitter sites or other real property in which any Credit Party has a leasehold interest, except to the extent that anything referred to in this Section 3.17 results from the act or omission of a Credit Party.

3.18     Employee Matters. As at the Effective Date, no Credit Party, nor any of their respective employees, is subject to any collective bargaining agreement. There are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of the Borrower, threatened against any Credit Party, or their respective employees, which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. As at the Effective Date, except as set forth in Schedule B, no Credit Party is subject to an employment contract providing for a fixed term of employment exceeding one year or providing for special payments on termination of employment exceeding one year’s salary.

3.19     Fiscal Year. The Fiscal Year of the Borrower ends on December 31 of each calendar year, and the Borrower’s Fiscal Quarters end on the last day of each of March, June, September and December of each calendar year.

3.20     Intellectual Property Rights. Each Credit Party is the registered and beneficial owner of, with good and marketable title, free of all licences, franchises and Liens other than Permitted Liens, to, or, alternatively, is a permitted licencee of, all patents, patent applications, trade marks, trade mark applications, trade names, service marks, copyrights, industrial designs, or other rights with respect to the foregoing and other similar property, used in or necessary for the present and planned future conduct of its business, without any conflict with the rights of any other Person other than as listed on Schedule B or other than for such conflicts as would not reasonably be expected to have a Material Adverse Effect. All material patents, trade marks, trade names, service marks, copyrights, industrial designs and other similar rights owned or licenced by any Credit Party, and all rights of any Credit Party to the use of any patents, trade marks, trade names, service marks, copyrights, industrial designs or other similar rights, are described in Schedule B (it being agreed that Schedule B excludes all such agreements which, if terminated, could be promptly replaced on comparable terms). Except as set forth in Schedule B, no material claim has been asserted and is pending by any Person with respect to the use by any Credit Party of any intellectual property or challenging or questioning the validity, enforceability or effectiveness of any intellectual property necessary for the conduct of the business of any Credit Party. Except as disclosed in Schedule B or except as would not reasonably be expected to have a Material Adverse Effect, (i) each Credit Party has the exclusive right to use the intellectual property which each Credit Party owns, and (ii) all applications and registrations for such intellectual property are current.

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3.21     Investment and Holding Company Status. No Credit Party is (a) an “investment company” subject to regulation under the United States Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the United States Public Utility Holding Company Act of 1935. No Credit Party is subject to the United States Employee Retirement Income Security Act of 1974, as amended from time to time. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying “margin stock”.

3.22     PCS Network Ownership. The Borrower owns or leases all material assets (and is the holder of all Radiocom Licences) necessary in connection with the operation of the PCS Network.

3.23     No Indebtedness for Borrowed Money. As at the Effective Date, no Credit Party has incurred any Indebtedness for borrowed money except Indebtedness in favour of the Lenders as expressly provided for in this Agreement and Indebtedness for borrowed money listed in Schedule B.

3.24     Permits, Licences, etc. Each Credit Party possesses all Authorizations as may be necessary to properly conduct the Business and operate the Borrower’s PCS Network. All of the material Authorizations as at the Effective Date are set forth in Schedule B, are all in full force and effect, and each Credit Party is in compliance therewith. All franchise, licence or other fees and charges which have become due pursuant to any material Authorization have been paid by the relevant Credit Party, and each Credit Party has made appropriate provisions as is required by GAAP for any such fees and charges which have accrued. The Radiocom Licences are valid and in full force and effect without conditions except for the conditions contained in or referred to in the Radiocom Licences. No event has occurred and is continuing which could reasonably be expected to (i) result in the revocation, termination or adverse modification of any Radiocom Licence or other material Authorization other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business, or (ii) materially and adversely affect any right of any Credit Party under any Radiocom Licence or other material Authorization other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business. No Credit Party has any reason to believe or has any knowledge that the Radiocom Licences will not be renewed in the ordinary course, other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business.

3.25     Security Interests. Each of the Security Documents creates (or continues the creation, as the case may be), as security for the obligations purported to be secured thereby, subject to the provisions hereof and thereof, a legal, valid and enforceable hypothec and/or security interest in all the Collateral subject to such Security Document and each such Security Document shall constitute, to the fullest extent possible under applicable law and upon completion of all required filings or actions, either (a) a fully published and/or perfected Lien on, and security interest in, all of the Collateral subject to such Security Document or (b) a floating charge, fixed charge, hypothecation or security interest, as specified in the applicable Security Document, with respect to all of the Collateral subject to such Security Document, in each case

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in favour of the Collateral Agent or the “fondé de pouvoir” (person holding an irrevocable power of attorney) appointed for the benefit of the Lenders), and subject to no other Liens except Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2. The pledgor or assignor, as the case may be, under each Security Document has good title to all Collateral subject thereto free and clear of all Liens other than Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2.

3.26     Regulatory Compliance. The Parent, the Borrower and each other Credit Party are in compliance with the Telecommunications Act (Canada) except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Parent and the Borrower, there is no investigation, notice of apparent liability, violation, forfeiture or other order or complaint issued by or before the CRTC or Industry Canada, or of any other proceedings of or before the CRTC or Industry Canada, affecting any Credit Party which could reasonably be expected to have a Material Adverse Effect except for the fee revision announced by Industry Canada in March, 2001 with respect to PCS license fees (which fee revision is disclosed in the Information Circular under the heading “PCS License Conditions and Fees”). No event has occurred which (i) results in or reasonably could be expected to result in, or after notice or lapse of time or both would result in or reasonably could be expected to result in, revocation, suspension, adverse modifications, non-renewal, impairment, restriction or termination of, or order of forfeiture with respect to, any license in any respect which could reasonably be expected to have a Material Adverse Effect or (ii) affects or could reasonably be expected in the future to affect any of the rights of any Credit Party under any license in any respect which could reasonably be expected to have a Material Adverse Effect. The Parent, the Borrower and each other Credit Party have duly filed in a timely manner all material filings, reports, applications, documents, instruments and information required to be filed by it under the Telecommunications Act (Canada), and all such filings were when made true, correct and complete in all respects except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

3.27     Budget Update. The updated budget provided by the Parent to the Administrative Agent on March 12, 2003 has been reviewed and approved by the board of directors of the Parent and, as of the Effective Date, continues to represent the Parent’s good faith estimate with respect to the matters contemplated therein.

ARTICLE 4
CONDITIONS

4.1     Conditions Precedent to Effectiveness of Agreement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2):

(a) Credit Agreement. The Administrative Agent (or its counsel) and the Issuing Bank shall have received from each of the Parent and the Borrower a counterpart of this Agreement signed on behalf of each of the Parent and the Borrower and

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	the Administrative Agent shall have delivered to the Borrower (or its counsel) a counterpart of this Agreement signed on behalf of the Administrative Agent and the Lenders.
(b)	Representations and Warranties. All representations and warranties made hereunder and in the other Financing Documents shall be true and correct as if made on the Effective Date.
(c)	No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing after giving effect to the Loans to be outstanding on the Effective Date.
(d)	Due Authorization. The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Credit Party, the authorization of the Transactions and any other legal matters relating to the Credit Parties, the Financing Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(e)	Fees and Expenses. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) incurred in connection with any of the Financing Documents and the Transactions, including perfecting Liens on any Collateral.
(f)	Legal Opinion. The Administrative Agent shall have received a favourable written opinion (addressed to the Administrative Agent, the Issuing Bank and the Lenders and dated the Effective Date) of Stikeman Elliott LLP, Canadian counsel to the Borrower and the Parent covering such matters relating to the Credit Parties, this Agreement or the Transactions as the Lenders shall reasonably request, and opinions of such other special and local counsel as may be required by the Administrative Agent and its counsel.
(g)	Satisfaction of Collateral and Guarantee Requirements. The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Effective Date and signed by a Responsible Officer of the Parent and its general counsel, together with all attachments contemplated thereby. All financing statements, instruments and other documents required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded, and all approvals and consents of Governmental Authorities required to be obtained, in each case in order to continue the publication, perfection of or to create, publish and perfect, as the case may be, the Liens intended to be created by the Security Documents with

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	respect to the Collateral of the Credit Parties shall have been filed, registered, or recorded or obtained, as the case may be.
(h)	Books and Records. The Administrative Agent shall have had an opportunity, if it so chooses, to examine the books of account and other records and files of any Credit Party and to make copies thereof, and the results of such examination shall have been satisfactory to the Administrative Agent in all respects.
(i)	Insurance. The Administrative Agent shall have received evidence satisfactory to the Administrative Agent that the insurance required by Section 5.10 and each of the Security Documents are in effect.
(j)	Liquidity and Subscriber Numbers. The consolidated cash and cash equivalents of the Parent shall be not less than Cdn.$75,000,000 and the aggregate number of Subscribers shall be not less than 1,000,000.
(k)	Consents and Approvals. All consents and approvals required to be obtained from any Governmental Authority or other Person in connection with the Transactions (including interim approval or its equivalent by Industry Canada with respect to the MCS licenses held by Inukshuk) shall have been obtained, and all applicable waiting periods and appeal periods shall have expired, in each case without the imposition of any burdensome conditions.
(l)	Satisfaction of Administrative Agent. All proceedings taken in connection with the execution of this Agreement, all other Financing Documents and all documents and papers relating thereto shall be satisfactory in form, scope, and substance to the Administrative Agent.
(m)	Indebtedness. After giving effect to the Transactions, no Credit Party shall have outstanding any shares of preferred stock or any Indebtedness, other than (i) the obligations created hereunder and (ii) the Indebtedness and preferred stock described in Schedule B.
(n)	Occurrence of Effective Date under Plan of Arrangement. The “Effective Date” (as defined under the Plan of Arrangement) shall have occurred or shall occur contemporaneously with the effectiveness of this Agreement.
(o)	Sanction Order. The Sanction Order shall not have been stayed by any court having jurisdiction to issue any such stay, and the time to appeal the Sanction Order or to seek review, rehearing or certiorari with respect to the Sanction Order must have expired; no appeal or petition for review, rehearing or certiorari with respect to the Sanction Order may be pending, and the Sanction Order must otherwise be in full force and effect; and the corporate transactions contemplated by Section 3 of the Plan of Arrangement shall have been completed pursuant to documentation satisfactory (in form and substance) to the Administrative Agent.

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(p)	Plan of Arrangement Not Amended, etc. The Plan of Arrangement shall not have been amended, supplemented, restated or otherwise modified in any manner not approved by the Administrative Agent.
(q)	Commitment Fees. The Borrower shall have paid to the Administrative Agent the fees stipulated in the separate fee letter entered into between the Administrative Agent, the Borrower and the Parent on the date hereof.
(r)	Security Documents. The Collateral Agent (or, with respect to (i), the Administrative Agent) shall have received:

(i)	a guarantee executed by each Credit Party other than the Borrower in favour of the Administrative Agent, as agent for the Lenders and the Issuing Bank, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent;
(ii)	a general security agreement executed by each Credit Party in favour of the Collateral Agent, as agent for the Lenders, the Administrative Agent and the Issuing Bank, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all property from time to time of each Credit Party, subject only to Permitted Liens;
(iii)	a hypothec executed by each Credit Party in favour of the Collateral Agent, in its capacity as “fondé de pouvoir” for the Lenders appointed pursuant to Section 8.11 hereof (together with a bond issued pursuant to such hypothec and a pledge agreement pledging such bond), each dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority hypothecation of all property from time to time of each Credit Party, subject only to Permitted Liens;
(iv)	mortgages executed by each Credit Party in favour of the Collateral Agent, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all real property from time to time of such Credit Party, subject only to Permitted Liens;

provided that if any of the foregoing documents are not suitable for use in any jurisdiction, the applicable Credit Party shall provide to the Collateral Agent (or the Administrative Agent with respect to (i) above) alternative document(s) with substantially equivalent substantive effect and which are suitable for use in such jurisdiction.

(s) Execution of Financing Documents. The other Financing Documents and all instruments and documents hereunder and thereunder shall have been duly

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	executed and delivered to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, together with any and all other documents and instruments as may have been reasonably requested by the Administrative Agent.
(t)	Execution and Delivery of Documentation. Without limiting the generality of the items described above, each of the Credit Parties shall have delivered or caused to be delivered to the Administrative Agent (in form and substance reasonably satisfactory to the Administrative Agent), the financial statements, instruments, resolutions, documents, agreements, mortgages, title reports, certificates, opinions and other items as may have been requested by the Administrative Agent.
(u)	Other Financing. The Tranche B Credit Agreement and the Tranche C Credit Agreement shall have been executed and delivered by the parties thereto and all conditions thereunder shall have been satisfied or waived.

4.2     Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)	the representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of each such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (except where such representation or warranty refers to a different date);
(b)	at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing; and
(c)	the Administrative Agent shall have received a Notice of Borrowing/Continuation/Conversion in the manner and within the time period required by Section 2.2.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the accuracy of the matters specified in paragraphs (a) and (b) above. This requirement does not apply on the conversion or rollover of an existing Borrowing provided that the aggregate outstanding Borrowings will not be increased as a consequence thereof.

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ARTICLE 5
AFFIRMATIVE COVENANTS

     The Borrower and the Parent jointly and severally covenant and agree with the Lenders that from (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit and the Commitments shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

5.1     Financial Statements and Other Information. The Parent or the Borrower (as applicable) will furnish to the Administrative Agent with copies for each Lender:

(i)	within 120 days after the end of each Fiscal Year of the Parent, the Parent’s audited consolidated and unconsolidated balance sheets and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Parent and its consolidated subsidiaries on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;
(ii)	within 120 days after the end of each Fiscal Year of the Borrower, the Borrower’s audited consolidated and unconsolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries, if any, on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;
(iii)	within 120 days after the end of each Fiscal Year of each Unrestricted Subsidiary and each Credit Party other than the Parent and the Borrower, each such Unrestricted Subsidiary’s or Credit Party’s audited unconsolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such

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	Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of such Unrestricted Subsidiary or Credit Party, as applicable, on an unconsolidated basis in accordance with GAAP consistently applied;
(iv)	if requested by the Administrative Agent, within 120 days after the end of each Fiscal Year of the Parent, the Credit Parties’ audited combined and consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such combined and consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Credit Parties on a combined and consolidated basis in accordance with GAAP consistently applied;
(v)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Parent, the Parent’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form (a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer of the Parent as presenting fairly in all material respects the financial condition and results of operations of the Parent and its subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of notes and normal year-end audit adjustments;
(vi)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, the Borrower’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which

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	includes such Fiscal Quarter, setting forth in each case in comparative form (a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its subsidiaries, if any, on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(vii)	within 60 days after the end of each Fiscal Quarter of each Fiscal Year of the Parent, the Credit Parties’ unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form (a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Credit Parties on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(viii)	concurrently with the financial statements required pursuant to Sections 5.1(i), (ii), (iii), (iv), (v), (vi), and (vii) above, a certificate, signed by a Financial Officer, (a) stating that a review of such financial statements during the period covered thereby and of the activities of each Credit Party has been made under such Financial Officer’s supervision with a view to determining whether each Credit Party has fulfilled all of its obligations under this Agreement and the other Financing Documents; (b) stating that each Credit Party has fulfilled its obligations under this Agreement and the other Financing Documents and that all representations made in this Agreement continue to be true and correct as if made on the date of such certification (or specifying the nature of any change), except where such representation or warranty refers to a different date, or, if there shall be a Default or Event of Default, specifying the nature and status thereof and the relevant Credit Party’s proposed response thereto; (c) demonstrating in reasonable detail compliance (including showing all material calculations) as at the end of the most recently completed Fiscal Year or the most recently completed Fiscal Quarter with the financial covenants in Section 5.14

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	and including a description by category (utilizing the same categories as are used by the Borrower in internal financial reports) of any permitted dispositions and acquisitions and any Capital Expenditures made by the Borrower or any other Credit Party as of the end of the most recently-completed Fiscal Year, and (d) containing or accompanied by such financial or other details, information and material as the Administrative Agent may reasonably request to evidence such compliance;
(ix)	copies of each management letter issued to each Credit Party by such accountants promptly following consideration or review thereof by the board of directors of each Credit Party, or any committee thereof (together with any response thereto prepared by any Credit Party);
(x)	promptly after the same become publicly available, copies of all periodic reports, proxy statements and other similar materials filed by any Credit Party with any securities commission, stock exchange or similar entity, and all materials distributed out of the ordinary course by the Parent to its shareholders and which relate to matters in which any Lender or the Administrative Agent, in such capacities, can reasonably be expected to have an interest;
(xi)	within a reasonable time after a request by the Administrative Agent, additional title information in form and substance acceptable to the Administrative Agent as is reasonably necessary covering the Collateral so that the Lenders shall have received, together with the title information previously received by the Lenders, satisfactory title information covering all of the Collateral;
(xii)	promptly after the Parent or the Borrower learns of the receipt or occurrence of any of the following, a certificate signed by a Responsible Officer, specifying (a) any official notice of any violation, possible violation, non-compliance or possible non-compliance, or claim made by any Governmental Authority pertaining to all or any part of the properties of any Credit Party which could reasonably be expected to have a Material Adverse Effect; (b) any event which constitutes a Default or Event of Default, together with a detailed statement specifying the nature thereof and the steps being taken to cure such Default or Event of Default; (c) the creation, dissolution, merger or acquisition of any Subsidiary; (d) any event or condition not previously disclosed to the Administrative Agent, which violates any Environmental Law and which may reasonably be expected to have a Material Adverse Effect; (e) any material amendment to, revocation or termination prior to scheduled expiry of, or material default under, a Material Contract or any execution of, or material amendment to,

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	termination prior to scheduled expiry or revocation of, or material default under, any material collective bargaining agreement; and (f) any event, development or condition which may reasonably be expected to have a Material Adverse Effect;
(xiii)	promptly after the occurrence thereof, notice of the institution of or any material adverse development in any action, suit or proceeding or any governmental investigation or any arbitration, before any court or arbitrator or any governmental or administrative body, agency or official against any Credit Party or any material property of any Credit Party which could reasonably be expected to have a Material Adverse Effect;
(xiv)	promptly after the filing thereof with any Governmental Authority (if requested by the Administrative Agent), copies of each annual and other report (including applicable schedules) with respect to each Pension Plan, if any, of any Credit Party or any trust created thereunder;
(xv)	upon request by the Administrative Agent, a summary of the insurance coverages of each Credit Party in form and substance reasonably satisfactory to the Administrative Agent; upon renewal of any insurance policy, a copy of an insurance certificate summarizing the terms of such policy; and upon request by the Administrative Agent, copies of the applicable policies;
(xvi)	on or before the 60th day after the end of each Fiscal Year, an annual budget of the Parent, reviewed by the board of directors of the Parent, setting forth in reasonable detail the consolidated projected revenues and expenses of the Parent for the following Fiscal Year, it being recognized by the Lenders that projections as to future results are not to be viewed as fact and that the actual results for the period or periods covered by such projections may differ from the projected results;
(xvii)	on or before the 90th day after the end of each Fiscal Year ending on or after December 31, 2003, the Borrower’s calculation of Excess Cash Flow (as defined in the Intercreditor Agreement) for the Fiscal Year then ended;
(xviii)	promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of each Credit Party and each Unrestricted Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent may reasonably request;

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(xix)	within 60 days after the end of each Fiscal Quarter, a certificate of a Financial Officer of the Borrower, certifying as to (a) total number of Subscribers of the Borrower as at the end of such Fiscal Quarter and net additional Subscribers during such Fiscal Quarter, and (b) the Subscriber churn ratios of the Borrower in respect of such Fiscal Quarter;
(xx)	written notice promptly, and in any event within five Business Days, after any Credit Party becomes aware of the initiation of any proceeding by any Governmental Authority having jurisdiction over any Credit Party which could result in the expiration without renewal, termination, revocation, suspension, modification or impairment of any Radiocom Licence or other Authorization where the same could reasonably be expected to cause a Material Adverse Effect;
(xxi)	written notice promptly, and in any event within five Business Days, after any Credit Party becomes aware of any proceeding or Law affecting the operation of the Business, the Radiocom Licences or any other Authorization which has been enacted or adopted or which will shortly be enacted or adopted and which could reasonably be expected to materially adversely affect the Business or any Credit Party;
(xxii)	within 30 days after the end of each month, a report setting out or providing, as the case may be, with respect to each switch-site for which a landlord consent pursuant to Section 5.16 has not already been obtained (a) whether the landlord/licensor has executed a consent and acknowledgement relating to the charge by the Borrower of its leasehold interest in the relevant switch site premises in favour of the Collateral Agent, and (b) the originals of all such consents and acknowledgements received during the month;
(xxiii)	prompt written notice of any Swap Agreement entered into by the Borrower or any other Credit Party or any amendment or termination thereof, together with all details relating thereto reasonably requested by the Administrative Agent (including, without limitation, its effective date, notional amount, currency, applicable rate, amortization and maturity date and such other information as may be reasonably requested by the Administrative Agent to verify on a continuing basis the mark-to-market exposure of the Credit Parties under all Swap Agreements);
(xxiv)	prompt written notice of any collective bargaining agreement to which any Credit Party becomes a party;

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(xxv)	all environmental site assessments or other environment-related materials in the possession of any Credit Party relating to properties owned or leased by a Credit Party which have not been previously provided to the Administrative Agent;
(xxvi)	prompt written notice of any change in the name of any Credit Party and of any change in the location of the chief executive office of any Credit Party and of any change in any other information on Schedule B necessary to ensure the accuracy at all times of the representations and warranties set out in Section 3.20;
(xxvii)	promptly after the Parent or the Borrower learns of the occurrence thereof, written notice of any material default under any lease (including any sublease) relating to a switch site used in the Business, including any payment default thereunder; and
(xxviii)	prompt written notice of any material event with respect to any Unrestricted Subsidiary, including any Investment by any Person in an Unrestricted Subsidiary.

5.2     Existence; Conduct of Business. Each Credit Party will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence (subject only to Section 6.3), and except to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect, obtain, preserve, renew and keep in full force and effect any and all rights, licenses, permits, privileges and franchises material to the conduct of its business.

5.3     Payment of Obligations. Each Credit Party will pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Credit Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

5.4     Maintenance of Properties. Each Credit Party will keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.5     Maintenance of Authorizations. Each Credit Party will maintain and keep in full force and effect all Authorizations necessary to operate the PCS Network and otherwise carry on the Business.

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5.6     Books and Records; Inspection Rights. Each Credit Party will keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Credit Party will maintain its billing, accounting and software systems at a level sufficient to enable it to conduct the Business. Each Credit Party will permit any representatives designated by the Administrative Agent, upon reasonable prior notice and during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (it being agreed that the aforementioned notice requirements and normal business hour restrictions shall not be applicable after the occurrence and continuation of a Default or an Event of Default, and after a Default or an Event of Default an individual Lender may designate its own representative to perform any such tasks); provided that, prior to a Default or an Event of Default, (i) any representative of a Lender who is not an employee of that Lender has established to the reasonable satisfaction of the Borrower and the Lenders that there is no inherent conflict of interest between the business and clientele of the Credit Parties and the business and clientele (other than the Lenders) of that representative, and (ii) the Lenders and their representatives shall not be entitled to take copies of (but may nevertheless examine) any portion of the books, accounts and records of the Credit Parties if allowing such copies to be taken would result in any Credit Party being in breach of any contractual or other legally binding obligation of confidentiality. All information provided or obtained pursuant to this Section 5.6 is subject to Section 9.12.

5.7     Compliance with Laws and Material Contracts. Each Credit Party will comply with all Laws and orders of any Governmental Authority applicable to it or its property (including the Sanction Order) and with all of its material contractual obligations, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

5.8     Use of Proceeds and Letters of Credit. The Borrower will use the proceeds of any Loan and Letters of Credit hereunder for working capital purposes only.

5.9     Further Assurances. The Borrower will, and will cause each other Credit Party to, cure promptly any defects in the execution and delivery of the Financing Documents, including this Agreement. Upon request, the Borrower will, at its expense, as promptly as practical, execute and deliver to the Administrative Agent, all such other and further documents, agreements and instruments (and cause each other Credit Party to take such action) in compliance with or performance of the covenants and agreements of the Borrower or any other Credit Party in any of the Financing Documents, including this Agreement, or to further evidence and more fully describe the Collateral, or to correct any omissions in any of the Financing Documents, or more fully to state the security obligations set out herein or in any of the Financing Documents, or to publish, perfect, protect or preserve any Liens created pursuant to any of the Financing Documents, or to make any recordings, to file any notices, or obtain any consents, all as may be necessary or appropriate in connection therewith.

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5.10     Insurance. The Borrower will, and will cause each other Credit Party to, maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to their respective properties and business against such liabilities, casualties, risks and contingencies and in such types (including business interruption insurance and flood insurance) and amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated and in accordance with any requirement of any Governmental Authority. In the case of any fire, accident or other casualty causing loss or damage to any properties of the Borrower used in generating cash flow or required by applicable Law, all proceeds of such policies shall be used promptly to repair or replace any such damaged properties, and otherwise shall be used as directed by the Administrative Agent (i) to repair or replace the damaged property, or (ii) to prepay the Loans or to make other payments in accordance with Section 2.6(a). The Borrower will obtain endorsements to the policies pertaining to all physical properties in which the Collateral Agent or the Lenders shall have a Lien under the Financing Documents, naming the Collateral Agent as a loss payee, and containing provisions that such policies will not be cancelled without 15 days prior written notice having been given by the insurance company to the Administrative Agent.

5.11     Operation and Maintenance of Property. The Parent will, and will cause each other Credit Party to, manage and operate its business or cause its business to be managed and operated (i) in accordance with prudent industry practice in all material respects and in compliance in all material respects with the terms and provisions of all applicable licenses, leases, contracts and agreements, and (ii) in compliance with all applicable laws of the jurisdiction in which such businesses are carried on, and all applicable Laws of every other Governmental Authority from time to time constituted to regulate the ownership, management and operation of such businesses, except where a failure to so manage and operate could not reasonably be expected to have a Material Adverse Effect.

5.12     Additional Subsidiaries; Additional Liens. If any additional subsidiary is formed or acquired after the Effective Date (each such subsidiary, an “Additional Subsidiary”), the Parent and the Borrower will, within three Business Days after such subsidiary is formed or acquired, notify the Administrative Agent thereof and promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such subsidiary and with respect to any Equity Securities in or Indebtedness of such subsidiary owned by or on behalf of any Credit Party; provided that (i) any action otherwise necessary to satisfy the Collateral and Guarantee Requirement that is prohibited by applicable Law and not legally capable of being taken without the appropriate consents of Governmental Authorities need not be taken and (ii) in the event any consent or approval of a Governmental Authority necessary to satisfy the Collateral and Guarantee Requirement cannot reasonably be obtained within 90 days after such Additional Subsidiary is acquired or formed, the Parent and the Borrower shall, so long as they exercise commercially reasonable efforts to obtain such consent or approval from the time such Additional Subsidiary is acquired or formed, have an additional period of time, not to exceed 30 days after such acquisition or formation, to obtain such consent or approval.

5.13     Intentionally Deleted.

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5.14              Financial Covenants. The Credit Parties will comply with the financial covenants listed in subsections (a) to (e) below. All such financial covenants shall be calculated on a consolidated basis, except that such calculations shall not include amounts in respect of Unrestricted Subsidiaries.

(a) Minimum EBITDA. The Credit Parties will ensure that minimum EBITDA for the Parent for the Rolling Period ending on each Quarterly Date set forth below is not less than the amount for such Rolling Period set out in the following table:

Quarterly Date	Minimum EBITDA (Cdn.$)
June 30, 2003		85,000,000
September 30, 2003		80,000,000
December 31, 2003		60,000,000
March 31, 2004		60,000,000
June 30, 2004		65,000,000
September 30, 2004		85,000,000
December 31, 2004		110,000,000
March 31, 2005		135,000,000
June 30, 2005		145,000,000
September 30, 2005		150,000,000
December 31, 2005		160,000,000
March 31, 2006		170,000,000
June 30, 2006		180,000,000
September 30, 2006		200,000,000
December 31, 2006		210,000,000
March 31, 2007		220,000,000
June 30, 2007		225,000,000
September 30, 2007		225,000,000
December 31, 2007		225,000,000
March 31, 2008		225,000,000
June 30, 2008		225,000,000
September 30, 2008		225,000,000
December 31, 2008		225,000,000

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(b) Minimum Number of Subscribers. The Credit Parties will ensure that the aggregate number of Subscribers on any date shall not be less than the number for such date set out in the following table:

	Number of
Date	Subscribers
On any date from June 30, 2003 to September 29, 2003		955,000
On any date from September 30, 2003 to December 30, 2003		955,000
On any date from December 31, 2003 to March 30, 2004		955,000
On any date from March 31, 2004 to June 29, 2004		1,055,000
On any date from June 30, 2004 to September 29, 2004		1,155,000
On any date from September 30, 2004 to December 30, 2004		1,155,000
On any date from December 31, 2004 to March 30, 2005		1,255,000
On any date from March 31, 2005 to June 29, 2005		1,305,000
On any date from June 30, 2005 to September 29, 2005		1,355,000
On any date from September 30, 2005 to December 30, 2005		1,405,000
On any date from December 31, 2005 to March 30, 2006		1,455,000
On any date from March 31, 2006 to June 29, 2006		1,455,000
On any date from June 30, 2006 to September 29, 2006		1,455,000
On any date from September 30, 2006 to December 30, 2006		1,455,000
On any date from December 31, 2006 to March 30, 2007		1,455,000
On any date from March 31, 2007 to June 29, 2007		1,455,000
On any date from June 30, 2007 to September 29, 2007		1,455,000
On any date from September 30, 2007 to December 30, 2007		1,455,000
On any date from December 31, 2007 to March 30, 2008		1,455,000
On any date from March 31, 2008 to June 29, 2008		1,455,000
On any date from June 30, 2008 to September 29, 2008		1,455,000
On any date from September 30, 2008 to December 30, 2008		1,455,000
On December 31, 2008		1,455,000

(c) Minimum ARPU. The Credit Parties will ensure that minimum ARPU for the Fiscal Quarter ending on each date set forth below is not less than the amount for such Fiscal Quarter set out in the following table:

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Fiscal Quarter Ending	Minimum ARPU (Cdn.$)
June 30, 2003		32.00
September 30, 2003		32.00
December 31, 2003		32.00
March 31, 2004		32.00
June 30, 2004		33.00
September 30, 2004		33.00
December 31, 2004		33.00
March 31, 2005		34.00
June 30, 2005		34.00
September 30, 2005		34.00
December 31, 2005		34.00
March 31, 2006		34.00
June 30, 2006		34.00
September 30, 2006		34.00
December 31, 2006		34.00
March 31, 2007		34.00
June 30, 2007		34.00
September 30, 2007		34.00
December 31, 2007		34.00
March 31, 2008		34.00
June 30, 2008		34.00
September 30, 2008		34.00
December 31, 2008		34.00

(d) Minimum Liquidity. The Credit Parties will ensure that, at all times, the consolidated cash and Permitted Investments of the Credit Parties, when aggregated with the available unused portion of the Commitments hereunder, will be not less than the aggregate of (i) the amount set forth in the table below (as applicable for such time), plus (ii) an amount equal to 50% of the principal amount of the Commitments hereunder, less (iii) an amount equal to the cumulative amount of Excess Cash Flow (as defined in the Intercreditor Agreement) paid to the Collateral Agent pursuant to Section 2.2 of the Intercreditor Agreement since the Effective Date. Any cash or Permitted Investments of any Credit Party which is subject to any Lien, other than a Permitted Lien, in favour of any Person other than the Collateral Agent, the

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Administrative Agent, any trustee or “fondé de pouvoir” on behalf of the Collateral Agent, the Administrative Agent, the Issuing Bank or any Lender, shall not be included in the consolidated cash and Permitted Investments of the Credit Parties for the purpose of determining compliance with this Section 5.14(d).

Fiscal Quarter Ending
on Quarterly Date below		Minimum Amount (Cdn.$)
	June 30, 2003		50,000,000
	September 30, 2003		50,000,000
	December 31, 2003		50,000,000
	March 31, 2004		10,000,000
	June 30, 2004		10,000,000
	September 30, 2004		20,000,000
	December 31, 2004		20,000,000
	March 31, 2005		(-5,000,000	)
	June 30, 2005		0
	September 30, 2005		20,000,000
	December 31, 2005		25,000,000
	March 31, 2006		30,000,000
	June 30, 2006		45,000,000
	September 30, 2006		100,000,000
	December 31, 2006		130,000,000
	March 31, 2007		130,000,000
	June 30, 2007		150,000,000
	September 30, 2007		150,000,000
	December 31, 2007		150,000,000
	March 31, 2008		150,000,000
	June 30, 2008		150,000,000
	September 30, 2008		150,000,000
	December 31, 2008		150,000,000

(e) Maximum Capital Expenditures. The Credit Parties will ensure that the cumulative aggregate amount of Capital Expenditures incurred by the Credit Parties from the Effective Date until each Fiscal Year end date set forth in the following table shall not exceed the cumulative aggregate amounts set forth for the applicable date in the following table; provided, however, that if the aggregate

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number of Subscribers as at any such Fiscal Year end date is less than the “Target Subscriber Number” for such date as set forth in the following table, then the permitted aggregate amount of Capital Expenditures which may be incurred by the Credit Parties from the Effective Date until the next Fiscal Year end date shall be reduced to an amount determined by multiplying the cumulative aggregate maximum amount of permitted Capital Expenditures set forth in such table by a fraction, the numerator of which is the actual number of Subscribers on such Fiscal Year end date and the denominator of which is the “Target Subscriber Number” for such Fiscal Year end date as set forth in the following table:

			Cumulative
			Aggregate
	Target		Amount of
	Subscriber		Capital
Date	Number		Expenditures
Effective Date to December 31, 2003		1,268,749		100,000,000
Effective Date to December 31, 2004		1,480,503		250,000,000
Effective Date to December 31, 2005		1,704,166		420,000,000
Effective Date to December 31, 2006		1,919,790		540,000,000
Effective Date to December 31, 2007		2,103,761		660,000,000
Effective Date to December 31, 2008		2,259,751		780,000,000

5.15              Most Favoured Nations. The Borrower will ensure that, if the Borrower provides to any lender as at the Effective Date, or provides to any other lender in the future, a financial ratio or other form of financial measurement covenant which is not specifically included in this Agreement, or which is more restrictive than the corresponding covenant in this Agreement, then this Agreement shall be deemed to have been amended automatically to have the benefit of such other present or future financial ratio or other form of financial measurement covenant; provided that if any such present or future financial ratio or other form of financial measurement covenant provided by the Borrower to another lender and not specifically included in this Agreement is changed or eliminated, the same change or elimination will automatically apply to this Agreement. For greater certainty, but without limitation, a covenant to maintain any particular type or class of assets or any particular type or class of liabilities (as the terms “asset” and “liability” are used under GAAP) at a specified maximum or minimum dollar amount (for example, a covenant that indebtedness will not exceed a fixed dollar amount) shall not constitute a “financial ratio or other financial measurement covenant”; however, a covenant such as a net worth covenant, which is not limited to any particular type or class of assets or any particular type or class of liabilities, shall constitute a “financial ratio or other financial measurement covenant”.

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5.16              Landlord Consents. The Credit Parties shall use their best efforts to deliver to the Administrative Agent as promptly as possible a consent from each landlord of each leased switch site premises in such form as the Administrative Agent may agree.

5.17              Bank Accounts. All bank accounts and other investment accounts of the Credit Parties shall be maintained in Canada with a Lender or with a financial institution which has confirmed in writing to the Administrative Agent that such financial institution will not have a credit relationship with the Credit Parties and will not exercise any right of set-off or other similar right against the assets in any such account.

ARTICLE 6
NEGATIVE COVENANTS

                     From (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, and all Commitments hereunder have expired or been terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

6.1              Indebtedness. The Borrower will not, and will not permit any Credit Party to, create, incur, assume or permit to exist any Indebtedness, except:

(a)	any Indebtedness created hereunder;
(b)	any Indebtedness created under the Tranche B Credit Agreement;
(c)	any Indebtedness created under the Tranche C Credit Agreement, the First Notes or the Second Notes;
(d)	Indebtedness existing on the date hereof and set forth in Schedule B and any extensions, renewals or replacements of any such Indebtedness so long as the terms and conditions of any such extension, renewal or replacement do not impose on any Credit Party any terms or conditions which are more onerous than the terms and conditions of the Indebtedness being extended, renewed or replaced except for changes in pricing resulting solely from changes in market conditions generally;
(e)	any Indebtedness of the Borrower to any other Credit Party and of any other Credit Party to the Borrower or any other Credit Party;
(f)	any Guarantee by any other Credit Party of Indebtedness of the Borrower or any other Credit Party;
(g)	any Indebtedness of any Credit Party incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Indebtedness secured by Purchase Money Liens and Capital Lease Obligations

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	and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof, provided that (i) such Indebtedness is incurred prior to or within 30 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed Cdn.$5,000,000 at any time outstanding;
(h)	any Indebtedness in respect of sight trade letters of credit in an aggregate amount not exceeding Cdn.$5,000,000;
(i)	any Indebtedness in respect of judgments against any Credit Party that the Borrower has determined in good faith will be (and which are) stayed or discharged within 45 days of the rendering thereof;
(j)	any Indebtedness in respect of Swap Agreements not prohibited by Section 6.5;
(k)	other unsecured Indebtedness of the Borrower in an aggregate principal amount not exceeding Cdn.$5,000,000 at any time;
(l)	any Permitted Subordinated Refinancing Debt; and
(m)	any other Indebtedness consented to by the Required Lenders.

6.2              Liens. The Parent and the Borrower will not, and will not permit any other Credit Party to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by the Parent, the Borrower or any other Credit Party, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens.

6.3              Fundamental Changes. The Parent and the Borrower will not, and will not permit any Credit Party to, merge into or amalgamate or consolidate with any other Person, or permit any other Person to merge into or amalgamate or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or any of the Equity Securities of any of the Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Subsidiary may amalgamate with the Borrower, (ii) any Subsidiary may amalgamate with any other Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve into the Borrower or another Credit Party if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and the Administrative Agent determines that such liquidation or dissolution is not disadvantageous to the Lenders, and (v) the Parent may amalgamate with the Pre-Filing Parent, as contemplated by Article 3 of the

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Plan of Arrangement; provided that any amalgamation pursuant to Sections 6.3(i), (ii) or (v) shall not be permitted unless the amalgamated corporation confirms to the Administrative Agent in writing that the amalgamated corporation is liable, by operation of law or otherwise, for the obligations of the Borrower or the relevant amalgamating corporation under this Agreement. The Borrower will not, and will not permit any Credit Party to, engage to any material extent in any material business other than the Business.

6.4              Investments, Loans, Advances, and Guarantees. The Parent and the Borrower will not, and will not permit any Credit Party to, purchase, hold or acquire (including pursuant to any amalgamation with any Person that was not a wholly-owned subsidiary prior to such amalgamation) any Equity Securities, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, provide any Guarantee of any obligations of, or make or permit to exist any Investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person, except:

(a)	Investments by a Credit Party in the Equity Securities of any other Credit Party, except the Parent;
(b)	loans or advances made by the Parent to the Borrower or any Subsidiary, by the Borrower to any Subsidiary, or made by any Subsidiary to the Borrower or any other Subsidiary;
(c)	Guarantees constituting Indebtedness permitted by Section 6.1;
(d)	Investments in Unrestricted Subsidiaries held by the Credit Parties on the Effective Date, and a further Investment of up to $3,500,000 in Inukshuk Internet Inc. to the extent necessary to permit Inukshuk Internet Inc. to make required payments in accordance with the requirements of its MCS licenses, and to make certain payments to employees;
(e)	Permitted Investments;
(f)	the existing Investments made by the Credit Parties and listed in Schedule “B” hereto; and
(g)	a further Investment of up to U.S.$500,000 in Argo II – The Wireless Internet Fund Limited Partnership.

For greater certainty, except as set forth in Section 6.4(d), the Credit Parties will not make any further Investment in any Unrestricted Subsidiary after the Effective Date.

6.5              Hedging Agreements. No Credit Party will enter into any Swap Agreement, other than U.S.$ Hedges having notional amounts not exceeding Cdn.$100,000,000

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at any time (in the aggregate for all such Swap Agreements) and having termination dates not later than six months after the date of the relevant Swap Agreement.

6.6              Restricted Payments. The Borrower will not, and will not permit any Credit Party to, declare, pay or make, or agree to pay or make, directly or indirectly, any Restricted Payment, provided that (a) the Parent may declare and pay dividends with respect to the FPV Shares, the FPNV Shares, the SPV Shares and the SPNV Shares to the extent contemplated by the Parent Articles of Incorporation, provided that no Default has occurred and is continuing and there is sufficient aggregate Excess Cash Flow (as defined in the Intercreditor Agreement), proceeds from Asset Dispositions and proceeds from the issuance of Equity Securities to fund the payment of all amounts which, by the terms of the Intercreditor Agreement, are to be paid prior to any payment on account of dividends on the FPV Shares, the FPNV Shares, the SPV Shares and the SPNV Shares (or the payment of interest on the First Notes or Second Notes, as applicable), (b) the Borrower may declare and pay dividends to the Parent, (c) any Subsidiary may declare and pay dividends to the Parent, the Borrower or any wholly-owned Subsidiary and any wholly-owned Subsidiary may redeem or repurchase its own Equity Securities, (d) the Borrower may make Restricted Payments pursuant to and in accordance with management bonus plans, employee bonus plans, stock option plans, profit sharing plans and/or other benefit plans for management or employees of the Parent, the Borrower and its Subsidiaries, provided that the aggregate amount of cash payments made by the Parent, the Borrower and the Subsidiaries in any Fiscal Year pursuant to all such management bonus plans, employee bonus plans, stock option plans, profit sharing plans and other compensation benefit plans shall not exceed Cdn.$1,000,000, and (e) the Parent may redeem, pursuant to Parent Articles of Incorporation, First Preferred Shares and Second Preferred Shares by issuing First Units and Second Units (as defined in the Plan of Arrangement).

6.7              Transactions with Affiliates. The Borrower will not, and will not permit any Credit Party to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favourable to the Borrower or such Credit Party than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among Credit Parties and not involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.6, and (d) any transaction permitted under Section 6.3. The Borrower and other Credit Parties will not enter into any transaction or series of transactions with Affiliates of the Parent, which involve an outflow of money or other Property from the Parent, the Borrower or other Credit Parties to an Affiliate of the Parent, including repayment of Indebtedness, or payment of management fees, affiliation fees, administration fees, compensation, salaries, asset purchase payments or any other type of fees or payments similar in nature, other than on terms and conditions substantially as favourable to the Parent, the Borrower and the other Credit Parties as would be obtainable by the Parent, the Borrower and the other Credit Parties in a reasonably comparable arm’s-length transaction with a Person other than an Affiliate of the Parent, the Borrower or the Subsidiaries, provided, however, that, in any event, the aggregate amount of all management fees, affiliation fees, administration fees and other similar fees paid by the Parent, the Borrower or any of the

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Subsidiaries to an Affiliate of the Parent, the Borrower or the Subsidiaries in any Fiscal Year shall not exceed Cdn.$2,000,000. The foregoing restrictions shall not apply to: (i) the payment of reasonable and customary fees to directors of the Parent or the Borrower who are not employees of the Parent or the Borrower, (ii) any other transaction with any employee, officer or director of the Parent, the Borrower or any Subsidiary pursuant to employee profit sharing and/or benefit plans and compensation and non-competition arrangements in amounts customary for corporations similarly situated to the Parent, the Borrower or any such Subsidiary and entered into in the ordinary course of business and approved by the board of directors of the Parent, the Borrower or such Subsidiary, or (iii) any reimbursement of reasonable out-of-pocket costs incurred by an Affiliate of the Parent or the Borrower on behalf of or for the account of the Parent, the Borrower or any of the Subsidiaries.

6.8              Repayment of Debt. The Borrower will not, and will not permit any Credit Party to, repay, prepay, redeem, repurchase, defease or otherwise make any payment on account of any Indebtedness for borrowed money except for (a) payment on account of Indebtedness created hereunder, (b) any payment consented to in writing by the Required Lenders, (c) Indebtedness for borrowed money permitted by Section 6.1, the repayment of which is not restricted by Section 6.6, and (d) any payment made pursuant to Section 2.2 of the Intercreditor Agreement.

6.9              Restrictive Agreements. The Borrower will not, and will not permit any Credit Party to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Credit Party to create, incur or permit to exist any Lien upon any of its property or assets, (b) the ability of any Credit Party to pay dividends or other distributions with respect to any Equity Securities or with respect to, or measured by, its profits or to make or repay loans or advances to any other Credit Party or to provide a Guarantee of any Indebtedness of any other Credit Party, (c) the ability of any Credit Party to make any loan or advance to any other Credit Party, or (d) the ability of any Credit Party to sell, lease or transfer any of its property to the Borrower or any other Credit Party; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule B (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of any Credit Party pending such sale, provided such restrictions and conditions apply only to the Credit Party that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other ordinary course contracts restricting the assignment thereof.

6.10              Capital Lease Obligations. The Borrower will not create, incur, assume or suffer to exist, or permit any Credit Party to create, incur, assume or suffer to exist, any

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Capital Lease Obligations, whether directly or as a guarantor, if, after giving effect thereto, the aggregate amount of all payments required to be made by the Parent, the Borrower and the other Credit Parties on a consolidated basis pursuant to such Capital Lease Obligations would exceed Cdn.$1,000,000 in any Fiscal Year.

6.11              Sales and Leasebacks. No Credit Party shall enter into any arrangement, directly or indirectly, with any Person whereby any Credit Party shall sell or transfer any property, whether now owned or hereafter acquired, and whereby such Credit Party shall then or thereafter rent or lease as lessee such property or any part thereof or other property which such Credit Party intends to use for substantially the same purpose or purposes as the property sold or transferred.

6.12              Pension Plan Compliance. If any Credit Party establishes a Pension Plan, such Credit Party will not (a) terminate such Pension Plan in a manner, or take any other action with respect to such Pension Plan, which could reasonably be expected to have a Material Adverse Effect; (b) fail to make full payment when due of all amounts which, under the provisions of such Pension Plan, any agreement relating thereto or applicable Law, any Credit Party is required to pay as contributions thereto, except where the failure to make such payments could not reasonably be expected to have a Material Adverse Effect; (c) permit to exist any accumulated funding deficiency, whether or not waived, with respect to such Pension Plan in an amount which could reasonably be expected to cause a Material Adverse Effect; (d) contribute to or assume an obligation to contribute to any “multi-employer pension plan” as such term is defined in the Pension Benefits Act (Ontario); (e) permit the actuarial present value of the benefit liabilities (computed on an accumulated benefit obligation basis in accordance with GAAP) under all Pension Plans in the aggregate to exceed the current value of the assets of all Pension Plans in the aggregate that are allocable to such benefit liabilities, in each case only to the extent such liabilities and assets relate to benefits to be paid to employees of the Credit Parties, by an amount that could reasonably be expected to cause a Material Adverse Effect.

6.13              Sale or Discount of Receivables. The Borrower will not, and will not permit any Credit Party to, discount or sell (with or without recourse) any notes receivable or accounts receivable to any Person (except for sales from one Credit Party to another Credit Party), other than accounts receivable that are more than 90 days overdue and which are sold on arm’s length commercial terms to a factoring company.

6.14              Unconditional Purchase Obligations. The Borrower will not, and will not permit any Credit Party to, enter into or be a party to, any material contract for the purchase of materials, supplies or other property or services, if such contract requires that payment be made by it regardless of whether or not delivery of such materials, supplies or other property or services is ever made.

6.15              Ownership of Shares. The Borrower will not authorize or issue any shares in its capital to any Person other than the Parent and the Pre-Filing Parent, and the Borrower will not permit the transfer of any shares in its capital to any Person other than the Parent. No Subsidiary will authorize or issue any shares in its capital to any Person other than another Credit

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Party, and no Subsidiary will permit the transfer of any shares in its capital to any Person other than another Credit Party.

6.16              No Amendments to Material Contracts. The Borrower will not amend (or waive any provision of), or permit any Credit Party to amend (or waive any provision of), any Material Contract in a manner which may reasonably be expected to have a Material Adverse Effect.

ARTICLE 7
EVENTS OF DEFAULT

7.1              Events of Default. If any of the following events (“Events of Default”) shall occur:

(a)	the Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b)	the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) above) payable under this Agreement, when and as the same shall become due and payable;
(c)	any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in or in connection with any Financing Document or any amendment or modification thereof or waiver thereunder shall prove to have been incorrect when made or deemed to be made, or any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Financing Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed to be made;
(d)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.1(xii)(b) (notices of Default or Events of Default), 5.2 (with respect to the Borrower’s existence), 5.14 (Financial Covenants) or in Article 6 (or in any comparable provision of any other Financing Document);
(e)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clauses (a), (b) or (d) above) or any other Financing Document, and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

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(f)	any Credit Party shall fail to make any payment whether of principal or interest, and regardless of amount, in respect of any Material Indebtedness, when and as the same shall become due and payable;
(g)	any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 7.1(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness so long as the proceeds of such sale or transfer are sufficient to, and are applied to, reduce such secured Indebtedness to nil;
(h)	any Credit Party:

(i)	becomes insolvent, or generally does not or becomes unable to pay its debts or meet its liabilities as the same become due, or admits in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, or proposes a compromise or arrangement between it and any class of its creditors;
(ii)	commits an act of bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an assignment of its property for the general benefit of its creditors under such Act, or makes a proposal (or files a notice of its intention to do so) under such Act;
(iii)	institutes any proceeding seeking to adjudicate it an insolvent, or except as permitted by Section 6.3, seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity, or files an answer admitting the material allegations of a petition filed against it in any such proceeding;
(iv)	applies for the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property; or

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(v) threatens to do any of the foregoing, or takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions described in this Section 7.1(h) or in Section 7.1(i), or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof,

(i) any petition is filed, application made or other proceeding instituted against or in respect of any Credit Party:

(i)	seeking to adjudicate it an insolvent;
(ii)	seeking a receiving order against it under the Bankruptcy and Insolvency Act (Canada);
(iii)	seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity; or
(iv)	seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property;

	and such petition, application or proceeding continues undismissed, or unstayed and in effect, for a period of 30 days after the institution thereof, provided that if an order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against any Credit Party thereunder in the interim, such grace period will cease to apply, and provided further that if any Credit Party files an answer admitting the material allegations of a petition filed against it in any such proceeding, such grace period will cease to apply;
(j)	any other event occurs which, under the Laws of any applicable jurisdiction, has an effect equivalent to any of the events referred to in either of Sections 7.1(h) or (i);
(k)	one or more judgments of a court of competent jurisdiction for the payment of money in a cumulative amount in excess of Cdn.$10,000,000 (or its then equivalent in any other currency) in the aggregate is rendered against the Borrower, any other Credit Party or any combination thereof and the Borrower or

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	other Credit Party has not (i) provided for its discharge in accordance with its terms within 30 days from the date of entry thereof, or (ii) procured a stay of execution thereof within 30 days from the date of entry thereof and within such period, or such longer period during which execution of such judgment has not been stayed, appealed such judgment and caused the execution thereof to be stayed during such appeal, provided that if enforcement and/or realization proceedings are lawfully commenced in respect thereof in the interim, such grace period will cease to apply;
(l)	any property of any Credit Party having a Fair Market Value in excess of Cdn.$5,000,000 (or its then equivalent in any other currency) in the aggregate is seized (including by way of execution, attachment, garnishment, levy or distraint), or any Lien thereon securing Indebtedness in excess of Cdn.$5,000,000 (or its then equivalent in any other currency) is enforced, or such property has become subject to any charging order or equitable execution of a Governmental Authority, or any writ of execution or distress warrant exists in respect of any Credit Party or the property of any of them, or any sheriff or other Person becomes lawfully entitled by operation of law or otherwise to seize or distrain upon such property and in any case such seizure, enforcement, execution, attachment, garnishment, distraint, charging order or equitable execution, or other seizure or right, continues in effect and is not released or discharged for more than 30 days or such longer period during which entitlement to the use of such property continues with the Credit Party, and the Credit Party is contesting the same in good faith and by appropriate proceedings, provided that if the property is removed from the use of the relevant Credit Party, or is sold, in the interim, such grace period will cease to apply, and provided further that if the Person seizing the property is a Lender or any person “related” to the Lender (as “related” is defined in the Income Tax Act), the seizure will not constitute an Event of Default;
(m)	one or more final judgments of a court of competent jurisdiction, not involving the payment of money and not otherwise specified in this Section 7.1, has been rendered against any Credit Party, the result of which could reasonably be expected to result in a Material Adverse Effect, so long as the Credit Party has not (i) provided for its discharge in accordance with its terms within 30 days from the date of entry thereof, or (ii) procured a stay of execution thereof within 30 days from the date of entry thereof and within such period, or such longer period during which execution of such judgment has been stayed, appealed such judgment and caused the execution thereof to be stayed during such appeal, provided that if enforcement and/or realization proceedings are lawfully commenced in respect thereof in the interim, such grace period will cease to apply;
(n)	this Agreement, any other Financing Document or any material obligation or other provision hereof or thereof at any time for any reason terminates or ceases

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	to be in full force and effect and a legally valid, binding and enforceable obligation of any Credit Party, is declared to be void or voidable or is repudiated, or the validity, binding effect, legality or enforceability hereof or thereof is at any time contested by any Credit Party, or any Credit Party denies that it has any or any further liability or obligation hereunder or thereunder or any action or proceeding is commenced to enjoin or restrain the performance or observance by any Credit Party of any material terms hereof or thereof or to question the validity or enforceability hereof or thereof, or at any time it is unlawful or impossible for the Credit Party to perform any of its material obligations hereunder or thereunder, except to the extent that any of the foregoing results directly from the gross negligence or wilful misconduct of the Administrative Agent or any Lender;
(o)	any Lien purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement, the Intercreditor Agreement or such Security Document) Lien in Collateral with a Fair Market Value or book value (whichever is greater) in excess, individually or in the aggregate, of Cdn.$5,000,000;
(p)	a Material Adverse Change shall occur; or
(q)	a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower described in clause (h), (i) or (j) above), and at any time thereafter during the continuance of such event or any other such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind except as set forth earlier in this paragraph, all of which are hereby waived by the Borrower; and in the case of any event with respect to the Borrower described in clause (h), (i) or (j) above, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE 8
THE ADMINISTRATIVE AGENT

8.1              Appointment of Agent. Each Lender and the Issuing Bank hereby designates JPMorgan Chase Bank, Toronto Branch, as Administrative Agent to act as herein specified and as specified in the other Financing Documents. Each Lender and the Issuing Bank

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hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions of the Financing Documents and to exercise such powers and to perform such duties thereunder as are specifically delegated to or required of the Administrative Agent by the terms thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its agents or employees.

8.2              Limitation of Duties of Agent. The Administrative Agent shall have no duties or responsibilities except those expressly set forth with respect to the Administrative Agent in this Agreement and as specified in the other Financing Documents. Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or omitted by it as such hereunder or in connection herewith, unless caused by its or their gross negligence or wilful misconduct. The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have, by reason of this Agreement or the other Financing Documents, a fiduciary relationship in respect of any Lender or the Issuing Bank. Nothing in this Agreement or the other Financing Documents, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement except as expressly set forth herein. The Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to this Agreement or the other Financing Documents unless it is requested in writing to do so by the Required Lenders.

8.3              Lack of Reliance on the Agent.

(a)

Independent Investigation. Independently, and without reliance upon the Administrative Agent, each Lender and the Issuing Bank, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Credit Parties in connection with the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of the Credit Parties, and, except as expressly provided in this Agreement and the other Financing Documents, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender or the Issuing Bank with any credit or other information with respect thereto, whether coming into its possession before the consummation of the Transactions or at any time or times thereafter.

(b)

Agent Not Responsible. The Administrative Agent shall not be responsible to any Lender or the Issuing Bank for any recitals, statements, information, representations or warranties contained herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, collectibility, priority or sufficiency of this Agreement or the other Financing Documents or the financial condition of any Credit Party or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or the other Financing Documents, or the financial condition of any Credit Party, or the existence or possible existence of any Default or Event of Default.

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8.4              Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Lenders or the Required Lenders (as the case may be) with respect to any act or action (including the failure to act) in connection with this Agreement or the other Financing Documents, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received written instructions from the Lenders or the Required Lenders, as applicable, and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement and the other Financing Documents in accordance with the instructions of the Required Lenders, or, to the extent required by Section 9.2, all of the Lenders.

8.5              Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or facsimile message, electronic mail, cablegram, radiogram, order or other documentary teletransmission or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

8.6              Indemnification of Agent. To the extent the Administrative Agent is not reimbursed and indemnified by the Borrower, each Lender will reimburse and indemnify the Administrative Agent, in proportion to its aggregate Applicable Percentage, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in performing its duties hereunder, in any way relating to or arising out of this Agreement or any other Financing Document, including all applicable Taxes to which the Administrative Agent may be subject in so performing or that are in any way so related; provided that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct.

8.7              The Agent in its Individual Capacities. With respect to its obligations under this Agreement and the Loans made by it, JPMorgan Chase Bank, Toronto Branch, in its capacity as a Lender hereunder, shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties, if any, specified herein; and the terms “Lenders” and “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include JPMorgan Chase Bank, Toronto Branch in its capacity as a Lender hereunder. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust, financial advisory or other

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business with the Borrower or any affiliate of the Borrower as if it were not performing the duties, if any, specified herein, and may accept fees and other consideration from the Borrower for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

8.8              May Treat Lender as Owner. The Borrower, Administrative Agent and the Issuing Bank may deem and treat each Lender as the owner of the Loans recorded on the Register maintained pursuant to Section 9.4(b) for all purposes hereof until a written notice of the assignment or transfer thereof shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who at the time of making such request or giving such authority or consent is the owner of a Loan shall be conclusive and binding on any subsequent owner, transferee or assignee of such Loan.

8.9              Successor Administrative Agent.

(a)

Administrative Agent Resignation. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, upon five Business Days’ notice to the Borrower, to appoint a successor Administrative Agent (who shall not be a non-resident of Canada within the meaning of the Income Tax Act), subject to the approval of the Borrower, such approval not to be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation then, upon five Business Days’ notice to the Borrower, the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent (subject to approval of the Borrower, such approval not to be unreasonably withheld), which shall be a financial institution organized under the laws of Canada having a combined capital and surplus of at least Cdn.$500,000,000 or having a parent company with combined capital and surplus of at least Cdn.$500,000,000.

(b)

Rights, Powers, etc. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.

8.10              Lenders to Enforce through Administrative Agent. Each Lender hereby acknowledges that, to the extent permitted by applicable Law, the Security Documents and the remedies provided thereunder to the Lenders are for the benefit of the Lenders collectively and

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acting together and not severally, and further acknowledges that each Lender’s rights hereunder and under the Security Documents are to be exercised collectively, not severally, by the Administrative Agent upon the decision of the Required Lenders. Accordingly, notwithstanding any of the provisions contained herein or in the Security Documents, each of the Lenders hereby covenants and agrees that it shall not be entitled to take any action hereunder or thereunder, including any declaration of default hereunder or thereunder, but that any such action shall be taken only by the Administrative Agent with the prior written agreement of the Required Lenders, provided that, notwithstanding the foregoing, in the absence of instructions from the Lenders (or the Required Lenders) and where in the sole opinion of the Administrative Agent the exigencies of the situation so warrant such action, the Administrative Agent may without notice to or consent of the Lenders (or the Required Lenders) take such action on behalf of the Lenders as it deems appropriate or desirable in the interests of the Lenders. Each Lender hereby further covenants and agrees that upon any such written consent being given by the Required Lenders, it shall co-operate fully with the Administrative Agent to the extent requested by the Administrative Agent, and each Lender further covenants and agrees that all proceeds from the realization of the Security Documents, to the extent permitted by applicable Law, are held for the benefit of all of the Lenders and shall be shared among the Lenders rateably in accordance with this Agreement, and each Lender acknowledges that all costs of any such realization (including all amounts for which the Administrative Agent is required to be indemnified under the provisions hereof) shall be shared among the Lenders rateably in accordance with this Agreement. Each Lender covenants and agrees to do all acts and things and to make, execute and deliver all agreements and other instruments, so as to fully carry out the intent and purpose of this Section and each Lender hereby covenants and agrees that it shall not seek, take, accept or receive any security for any of the obligations and liabilities of the Borrower hereunder or under the other Financing Documents, or any other document, instrument, writing or agreement ancillary hereto or thereto, other than such security as is provided hereunder or thereunder, unless all of the Lenders shall at the same time obtain the benefit of any such security or agreement, as the case may be.

8.11              Quebec Security. For greater certainty, and without limiting the powers of the Administrative Agent or the Collateral Agent, or any other Person acting as an agent or mandatary for such Agents hereunder or under any of the other Financing Documents, the Borrower and the Parent hereby acknowledge that, for purposes of holding any security granted by any Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of the Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party, the Collateral Agent shall be the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Quebec) for: (i) all present and future Lenders (including the Issuing Bank and any Affiliate of the Issuing Bank that issues Letters of Credit); (ii) any Affiliate of any Lender that may from time to time enter into Swap Agreements with the Borrower, and (iii) any Lender or Person that makes available to the Borrower Permitted Additional Exit Facility Debt. Each Lender, for itself and on behalf of any of its Affiliates that enter into Swap Agreements with the Borrower, the Issuing Bank (and any Affiliate of the Issuing Bank that issues Letters of Credit) and any Person (including any Lender) that makes available to the Borrower Permitted Additional Exit Facility

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Debt, hereby (i) irrevocably constitutes, to the extent necessary the Collateral Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any other Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party; and (ii) appoints and agrees that the Administrative Agent may act as the bondholder and mandatary with respect to any bond that may be issued and pledged from time to time for the benefit of the Lenders, the Persons that make available Permitted Additional Exit Facility Debt, the Issuing Bank and any Affiliate of the Issuing Bank that issues Letters of Credit and any Affiliates of the Lenders that enter into Swap Agreements.

The constitution of the Collateral Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) and the Administrative Agent as bondholder and mandatary with respect to any bond that may be issued and pledged from time to time for the benefit of the Lenders, the Persons that make available Permitted Additional Exit Facility Debt, the Issuing Bank and any Affiliate of the Issuing Bank that issues Letters of Credit and any Affiliates of the Lenders that enter into Swap Agreements shall be deemed to have been ratified and confirmed as follows:

(i)	by any assignee of a Lender (or an Issuing Bank and any Affiliate of the Issuing Bank that issues Letters of Credit), by the execution of an Assignment and Assumption;
(ii)	by any Person (including a Lender) that provides Permitted Additional Exit Facility Debt, by the execution of a supplemental agreement hereto; and
(iii)	by any Affiliate of a Lender that enters into Swaps Agreements, by the execution of the Swap Agreements.

Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), the Administrative Agent or the Collateral Agent may purchase, acquire and be the holder of any bond issued by the Borrower or any other Credit Party (i.e. the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Credit Party). The Borrower and each Credit Party hereby acknowledge that any such bond shall constitute a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.

The Collateral Agent herein appointed as fondé de pouvoir shall have the same rights, powers and immunities as the Agents as stipulated herein, including under this Section 8, which shall apply mutatis mutandis. Without limitation, the provisions of Section 8.9 shall apply mutatis mutandis to the resignation and appointment of a successor Collateral Agent acting as fondé de pouvoir.

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ARTICLE 9
MISCELLANEOUS

9.1              Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile in each case to the addressee, as follows:

(i) if to the Borrower:

MICROCELL SOLUTIONS INC.

800 de La Gauchetière Street West

Suite 4000

Montreal, Quebec

H5A 1K3

Attention:       Chief Financial Officer

Facsimile:       514.846.6959

(ii)	if to the Administrative Agent or the Collateral Agent:
	JPMORGAN CHASE BANK, TORONTO BRANCH
	Suite 1800, South Tower
	Royal Bank Plaza
	200 Bay Street, P.O. Box 80
	Toronto, ON M5J 2J2
	Attention:        Vice President, Corporate Finance
	Facsimile:        416.981.9128
(iii)	if to any Lender or the Issuing Bank, to it at its address (or facsimile number) set forth opposite its name in the execution page(s) of this Agreement.

          (b)         Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communication to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

          (c)         Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

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9.2              Waivers; Amendments.

(a)

No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 9.2(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the continuation, conversion or rolling over of a Loan or the issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of such Default at the time.

(b)

Neither this Agreement nor any other Financing Document (or any provision hereof or thereof) may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the amount or extend the expiry date of any Loan of any Lender without the prior written consent of each Lender directly affected thereby, (ii) reduce the principal amount of any Loan or reduce the rate of interest or any fee applicable to any Loan without the prior written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable in respect thereof, or reduce the amount of, waive or excuse any such payment, without the prior written consent of each Lender directly affected thereby, (iv) change Section 2.12(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the prior written consent of each Lender directly affected thereby, (v) change any of the provisions of this Section 9.2 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the prior written consent of each Lender, or (vi) waive any Event of Default under Section 7.1 (h), (i) or (j) without the prior written consent of each Lender, or (vii) release any Credit Party from any material obligations under the Security Documents and other instruments contemplated by this Agreement or release or discharge any of the Liens arising under the Security Documents, in each case without the prior written consent of each Lender; and

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provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank, as the case may be, without the prior written consent of the Administrative Agent or the Issuing Bank, as applicable. For greater certainty, the Administrative Agent may release and discharge the Liens constituted by the Security Documents to the extent necessary to enable the Borrower or any other Credit Party to complete any asset sale which is not prohibited by this Agreement or the other Financing Documents, and the Administrative Agent may agree to amend or waive Section 2.2 of the Intercreditor Agreement with the consent of the Required Lenders.

9.3              Expenses; Indemnity; Damage Waiver.

(a)

The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and all applicable Taxes, in connection with the syndication of the credit facilities provided for herein and the preparation and administration of this Agreement and the other Financing Documents, (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and applicable Taxes, in connection with any amendments, modifications or waivers of the provisions hereof or of any of the other Financing Documents, (whether or not the transactions contemplated hereby or thereby shall be consummated), and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent or any Lender and all applicable Taxes, in connection with the enforcement or protection of their rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)

The Borrower shall indemnify the Administrative Agent, the Collateral Agent, the Issuing Bank and each Lender, as well as each Related Party and each assignee of any of the foregoing Persons (each such Person and each such assignee being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, cost recovery actions, damages, expenses and liabilities of whatsoever nature or kind and all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, travel expenses and reasonable fees, charges and disbursements of counsel) and all applicable Taxes to which any Indemnitee may become subject arising out of or in connection with (i) the execution or delivery of the Financing Documents or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder, and the consummation of the Transactions or any other

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	transactions thereunder, (ii) any Loan or Letter of Credit or any actual or proposed use of the proceeds therefrom, including any refusal by the Issuing Bank to honour a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Credit Party, or any Environmental Liability related in any way to any Credit Party, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, (v) any other aspect of this Agreement and the other Financing Documents, or (vi) the enforcement of any Indemnitee’s rights hereunder and any related investigation, defence, preparation of defence, litigation and enquiries, in each case regardless of whether or not the Transactions are consummated; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct of or material breach of this Agreement by such Indemnitee. No Indemnitee shall be liable for any indirect or consequential damages in connection with its activities related to the Loans nor shall any Credit Party be liable for any indirect or consequential damages in connection with its activities related to the Loans.
(c)	To the extent that the Borrower fails to pay any amount required to be paid under Sections 9.3 (a) or (b), each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Collateral Agent (as applicable) such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Collateral Agent, in its capacity as such.
(d)	The Borrower shall not assert, and hereby waives (to the fullest extent permitted by applicable Law), any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Financing Document, or any agreement or instrument contemplated thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e)	Any inspection of any property of any Credit Party made by or through the Administrative Agent or any Lender is for purposes of administration of this Agreement and the Financing Documents only, and neither the Borrower nor any

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	other Credit Party is entitled to rely upon the same (whether or not such inspections are at the expense of the Borrower).
(f)	By accepting or approving anything required to be observed, performed, fulfilled or given to the Administrative Agent or the Lenders pursuant to the Financing Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Administrative Agent or the Lenders.
(g)	The relationship between the Borrower and the Administrative Agent and the Lenders is, and shall at all times remain, solely that of borrower and lenders. Neither the Administrative Agent nor the Lenders shall under any circumstance be construed to be partners or joint venturers of the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a fiduciary relationship with the Borrower or its Affiliates, or to owe any fiduciary duty to the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to the Borrower or its Affiliates to select, review, inspect, supervise, pass judgment upon or inform the Borrower or its Affiliates of any matter in connection with their property or the operations of the Borrower or its Affiliates. The Borrower and its Affiliates shall rely entirely upon their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Administrative Agent or the Lenders in connection with such matters is solely for the protection of the Administrative Agent and the Lenders, and neither the Borrower nor any other Person is entitled to rely thereon.
(h)	The Administrative Agent, the Issuing Bank and the Lenders shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of any Credit Party or their Affiliates and the Borrower hereby indemnifies and holds the Administrative Agent, the Issuing Bank and the Lenders harmless on the terms set forth in Section 9.3(b) from any such loss, damage, liability or claim.
(i)	This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of the Borrower, the Administrative Agent and the Lenders in connection with the Loans, and is made for the sole benefit of the Borrower, the Administrative Agent and the Lenders, and their respective successors and permitted assigns. Except as provided in Sections 9.3(b) and 9.4, no other Person shall have any rights of any nature hereunder or by reason hereof.

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(j) All amounts due under this Section 9.3 shall be payable not later than three Business Days after written demand therefor.

9.4              Successors and Assigns.

(a)

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)

Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender or any Lender Affiliate, the Borrower, the Issuing Bank and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed); provided further that the Borrower’s consent shall not be required with respect to any assignment made at any time after the occurrence and during the continuance of an Event of Default, (ii) except in the case of an assignment to a Lender or any Lender Affiliate, the aggregate amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date on which the Assignment and Assumption relating to such assignment is delivered to the Administrative Agent) shall not be less than U.S.$ 3,500,000 (if in U.S. $) or Cdn.$5,000,000 (if in Cdn. $), unless both the Borrower and the Administrative Agent otherwise consent in writing, and the amount held by each Lender after each such assignment shall not be less than the minimum assignable amount described in this section above, unless both the Borrower and the Administrative Agent otherwise consent in writing, (iii) each partial assignment in respect of any assigned Loans shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in respect of such Loans, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with (except in the case of an assignment by a Lender to an Affiliate of such Lender) a processing and recordation fee of Cdn.$5,000, payable by the assigning Lender, (v) the

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assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, and (vi) the Borrower shall not incur any increased costs merely due to any such assignment including any obligation to make any payment under Section 2.11 that would exceed the amount payable to the assigning Lender. The Administrative Agent shall provide the Borrower and each Lender with written notice of any change in (or new) address of a Lender disclosed in an Administrative Questionnaire. Subject to acceptance and recording thereof pursuant to Section 9.4(c), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, shall have all of the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.9, 2.10 and 2.11 and 9.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.4 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 9.4(d). The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in Toronto, Ontario a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and the principal amount of the Loans and LC Disbursements owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(c)

Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 9.4(b) and any written consent to such assignment required by Section 9.4(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in Section 9.4(b).

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(d)	Any Lender may, without notice to the Borrower or the consent of the Borrower or the Administrative Agent or the Issuing Bank, sell participations to one or more Persons (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.2(b) that affects such Participant. Subject to Section 9.4(e), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.9, 2.10 and 2.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 9.4(d). To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.8 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.12(c) as though it were a Lender.
(e)	A Participant shall not be entitled to receive any greater payment under Section 2.9 or 2.10 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant shall not be entitled to receive any greater amount under Section 2.11 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant.
(f)	Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and Section 9.4 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g)	Any assignment or grant of a participation pursuant to Section 9.4 shall constitute neither a repayment by the Borrower to the assigning or granting Lender of any Loan included therein, nor a new advance of any such Loan to the Borrower by such Lender or by the assignee or Participant, as the case may be. The parties

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acknowledge that the Borrower’s obligations hereunder with respect to any such Loans will continue and will not constitute new obligations as a result of such assignment or participation.

9.5              Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and the issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or been terminated. Sections 2.9, 2.10 or 2.11 and 9.3 and Article 8 shall survive and remain in full force and effect, regardless of the consummation of the Transactions, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

9.6              Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Financing Documents and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed original or faxed counterpart of a signature page of this Agreement by facsimile shall be as effective as delivery of a manually executed original counterpart of this Agreement.

9.7              Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.8              Right of Set Off. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any

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time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set off) which such Lender may have.

9.9              Governing Law; Jurisdiction; Consent to Service of Process.

(a)	This Agreement shall be construed in accordance with and governed by the Laws of the Province of Ontario.
(b)	The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the Courts of the Province of Ontario, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement, or any other Financing Document or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in Ontario. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Financing Document against the Borrower or its properties in the courts of any other jurisdiction.
(c)	The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9.9(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Law, any forum non conveniens defence to the maintenance of such action or proceeding in any such court.
(d)	Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

9.10              WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FINANCING DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR

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THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

9.11              Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.12              Confidentiality. The Administrative Agent, the Issuing Bank, the Collateral Agent and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to each of their Affiliates, directors, officers, employees, agents and advisors, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or other Governmental Authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Financing Document or any suit, action or proceeding relating to any Financing Document or the enforcement of rights thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or prospective assignee of or Participant in any of its rights or obligations under this Agreement, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section, or (ii) becomes available to the Administrative Agent, the Issuing Bank, the Collateral Agent or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower, any of its subsidiaries, or their respective business, other than any such information that is available to the Administrative Agent, the Issuing Bank, the Collateral Agent or any Lender on a non-confidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified as confidential in writing at the time of delivery. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

[Balance of page intentionally left blank; signature page follows.]

TRANCHE A EXIT FACILITY AGREEMENT

S-1

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWER	PARENT
MICROCELL SOLUTIONS INC.	MICROCELL TELECOMMUNICATIONS INC.

By:
	By:
By:
	By:

AGENTS

JPMORGAN CHASE BANK TORONTO
BRANCH, as Administrative Agent under the
Tranche A Exit Facility Agreement and as
Collateral Agent

By:

By:

TRANCHE A EXIT FACILITY AGREEMENT

S 2

TRANCHE A LENDERS

	Address:    (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:	Postal/Zip Code:
By:	Country:
Name:	Contact:
Title:	Phone:
	Fax:
	E-mail:

SCHEDULE A

COMMITMENTS

Lender	Commitment
JPMorgan Chase Bank, Toronto Branch	Cdn.$25,000,000

SCHEDULE B

DISCLOSED MATTERS

[Note: The numbers in parentheses denote the provision of the Credit Agreement which
refers to this Schedule B.]

Governmental Approvals (3.3)

1. None

Litigation (3.5)

1. On April 10, 2002, ASP WirelessNet Inc. (“ASP”), a former service provider of the Borrower, filed a notice of arbitration pursuant to an agreement that ASP had with the Borrower. ASP claims in the notice of arbitration that the Borrower has breached its agreements with ASP and that it therefore suffered damages in the amount of $18.5 million, which ASP is claiming from the Borrower. The Borrower considers ASP’s claim as frivolous and unfounded in fact and in law and intends to vigorously contest it.

Real Property and Office and Switchroom Leases (3.8)

OWNED REAL PROPERTIES

Immovable Properties

Québec Property

Le lot UN MILLION DEUX CENT CINQUANTE SEPT MILLE CINQ CENT TREIZE (1 257 513) du cadastre du Québec, circonscription foncière de Québec.

Nicolet Property

Un immeuble situé dans le secteur St-Grégoire de Ville de Bécancour, connu et désigné comme étant le lot numéro SEIZE de la subdivision officielle du lot originaire numéro CINQUANTE-NEUF (59-16) du cadastre de la Paroisse de St-Grégoire, circonscription foncière de Nicolet.

Hull Property

Un immeuble situé en la Municipalité de Gatineau, connu et désigné comme étant le lot numéro UN MILLION TROIS CENT SOIXANTE-TREIZE MILLE TROIS CENT SOIXANTE-DOUZE (1 373 372) du Cadastre du Québec, circonscription foncière de Hull.

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Trois-Rivières Property
	Un immeuble situé en la Municipalité de Pointe-du-Lac connu et désigné comme étant le lot DEUX MILLIONS TROIS CENT TRENTE ET UN MILLE SEPT CENT TRENTE-NEUF (2 331 739) du cadastre du Québec, circonscription foncière de Trois-Rivières.

L’Assomption Property

(a)	Le lot numéro TRENTE-DEUX de la subdivision officielle du lot originaire numéro TROIS CENT QUARANTE-HUIT (348-32) du cadastre officiel de la Paroisse de Saint-Henri-de-Mascouche, circonscription foncière de l’Assomption.
(b)	Le lot numéro DIX-NEUF de la subdivision officielle du lot originaire numéro TROIS CENT QUARANTE-NEUF (349-19) dudit cadastre.

Champlain Property

Un immeuble situé en la Municipalité de Saint-Louis-de-France, connu et désigné comme étant une partie du lot SOIXANTE-CINQ (Ptie 65) du cadastre de la Paroisse de Saint-Maurice, circonscription foncière de Champlain, de figure irrégulière, dont les tenants et aboutissants sont:

- vers le nord-est, par la rue Courteau (montré à l’originaire) et par une partie du lot 65, rue Courteau; vers le sud-est, par une partie du lot 65; vers le sud-ouest, par le lot 67-1 et par une partie du lot 67; vers le nord-ouest, par le rang St-Alexis (montré à l’originaire);

Rattachement :

Le coin nord de ce lot correspond au coin nord du lot 65;

Dimensions :

	DIRECTION		LONGUEUR
LIGNE	GÉODÉSIQUE		MÈTRES		LIMITE
10261-23847		136°50’20”		286,61	nord-est
23847-10257		146°27’10”		30,91	nord-est
10257-10258		136°57’15”		49,76	nord-est
10258-10223		220°050’30”		147,36	sud-est
10223-10124		316°033’25”		375,25	sud-ouest
10124-10261		440°13’53”		153,82	nord-ouest

Superficie de : 56 305,1 mètres carrés.

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Le tout tel que montré par un liséré rouge sur le plan préparé par Pierre Roy, arpenteur-géomètre, le 13 octobre 2000, sous le numéro 50408 de ses dossiers et sous le numéro 3488 de ses minutes.

Terrebonne Property

	Un immeuble situé en la Ville de Blainville, connu et désigné comme étant le lot un million neuf cent sept mille sept cent soixante-sept (1 907 767) du Cadastre du Québec, circonscription foncière de Terrebonne.
With all the buildings thereon erected, and as the said properties now subsist with all its rights, members and appurtenances, without exception or reserve of any kind and together with and subject to all servitudes, continued or discontinued, apparent or non apparent, attached thereto.

Servitudes

All of the Borrower’s rights, title and interest in, to and pursuant to the following servitudes affecting the immovable properties described hereunder:

Sainte-Agathe-des-Monts Servitude

Une servitude de droit de passage pour le bénéfice de la tour, des constructions et ouvrages appartenant à Microcell Connexions Inc., identifiés comme étant le Fonds Dominant, sur la lisière ci-après désignée, étant le Fonds Servant, à savoir :

Fonds Servant

(a)	Le lot quarante-deux de la subdivision officielle du lot originaire quatre (4-42), Rang 3, Canton de Beresford, cadastre officiel de la Paroisse de Sainte-Agathe-des-Monts, circonscription foncière de Terrebonne, (ledit lot connu comme étant la rue Panorama);
(b)	Une partie du lot cent quarante-quatre de la subdivision officielle du lot originaire quatre (4-144) Rang 3, Canton Beresford, dudit cadastre, décrite comme suit :
	De figure trapézoïdale, indiquée par les nombres 1, 2, 3 et 4 sur le plan préparé par François Houle, arpenteur-géomètre, le 25 octobre 2000, sous le numéro 2655 de ses minutes, commençant au point « 1 » étant situé au coin sud-est du lot 4-144 du Rang III du Canton de Beresford, ladite parcelle est bornée et décrite comme suit :
-	vers le sud-ouest, la ligne 1-2, par le lot 4-145 et mesurant le long de cette limite quarante-quatre mètres et trois centièmes (44,03m) suivant une ligne ayant un gisement de 298°21’23’’.

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- vers le nord-ouest, la ligne 2-3, par une partie du lot 5A et mesurant le long de cette limite quatre mètres et soixante-neuf centièmes (4,69m) suivant une ligne ayant un gisement de 15°25’26’’.

- vers le nord-est, la ligne 3-4, par le résidu du lot 4-144 et mesurant le long de cette limite quarante-trois mètres et quatre-vingt-douze centièmes (43,92m) suivant une ligne ayant un gisement de 118°21’23’’.

- vers le sud-est, la ligne 4-1, par le lot 4-42 (rue Panorama) et mesurant le long d’un arc quatre mètres et soixante-treize centièmes (a :4,73m) ayant un rayon de vingt mètres (r :20,00m).

Superficie : 200,5 mètres carrés.

Fonds Dominant

La tour, les constructions et ouvrages sont érigés sur l’emplacement suivant :

(a)	Une partie du lot cinq a (Ptie 5A), Rang 3, Canton Beresford, cadastre officiel de la Paroisse de Sainte-Agathe-des-Monts, circonscription foncière de Terrebonne, décrite comme suit :
	De figure irrégulière, indiquée par les nombres 2, 5, 6, 7, 8 et 3 sur ledit plan, commençant au point « 2 » étant situé au coin sud-ouest du lot 4-144 du Rang III du Canton de Beresford, ladite parcelle est bornée et décrite comme suit :
-	vers le sud-ouest, la ligne 2-5 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite huit mètres et cinq centièmes (8,05m) suivant une ligne ayant un gisement de 298°21’23’’.
-	vers l’ouest, la ligne 5-6 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite cent trente-cinq mètres et cinq centièmes (135,05m) suivant une ligne ayant un gisement de 0°04’07’’.
-	vers le Nord, la ligne 6-7 sur ledit plan, par une autre partie du lot 5A décrite plus bas, et mesurant le long de cette limite quatre mètres et soixante centièmes (4,60m) suivant une ligne ayant un gisement de 96°19’15’’.
-	vers l’est, la ligne 7-8 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite cent trente et un mètres et quatre-vingt-deux centièmes (131,82m) suivant une ligne ayant un gisement de 180°04’07’’.
-	vers le nord-est, la ligne 8-3 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite quatre mètres et vingt-sept centièmes (4,27m) suivant une ligne ayant un gisement de 118°21’23’’.

- 5 -

- vers le sud-est, la ligne 3-2 sur ledit plan, par le résidu du lot 4-144 et mesurant le long de cette limite quatre mètres et soixante-neuf centièmes (4,69m) suivant une ligne ayant un gisement de 195°25’26’’.

Superficie : 638,0 mètres carrés.

(b)	Une partie du lot cinq a (Ptie 5A), Rang 3, Canton de Beresford, dudit cadastre, décrite comme suit :
	De figure carrée, indiquée par les nombres 6, 9, 10 et 11 sur ledit plan, commençant au point « 6 », rattaché précédemment, ladite parcelle est bornée comme suit :
-	vers l’est, la ligne 6-9 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant un ligne ayant un gisement de 6°19’15’’.
-	vers le nord, la ligne 9-10 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 96°19’15’’.
-	vers l’est, la ligne 10-11 sur ledit plan, par une partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 186°19’15’’.
-	vers le sud, la ligne 11-6 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 276°19’15’’.

Superficie : 8,2 mètres carrés.»

Pursuant to a Deed of Right of Way entered into between Chalets Chanteclair Inc. and Microcell Connexions Inc., which right of way is registered on November 29, 2000 at the Land Registration Division of Terrebonne under number 1244541.

Lévis Servitude

Une servitude de droit de passage pour le bénéfice de la tour, des constructions et ouvrages appartenant à Microcell Connexions Inc., identifiés comme étant le Fonds Dominant, sur la lisière ci-après désignée, étant le Fonds Servant, à savoir :

Fonds Servant

(a) Une partie du lot QUARANTE-trois (Ptie 43) du cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon, circonscription foncière de Lévis, désignée comme suit :

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	De figure irrégulière, indiquée par les nombres 1 à 6 du plan préparé par François Houle, arpenteur-géomètre, le 1er mai 2001, sous le numéro 3138 de ses minutes, commençant au point « 1 » étant l’intersection entre la ligne séparative des lots 42 et 43 avec la limite SUD-EST de l’emprise du Chemin Sainte-Anne Est (une partie du lot 43), ladite parcelle est bornée et décrite comme suit :
-	vers le NORD-EST, par une partie du lot 42, dans une première ligne 1-2, et mesurant le long de cette limite quatre-vingt-quatre mètres et quatre-vingt-deux centièmes (84,82m) suivant une ligne ayant un gisement de 134°57’29’’; dans une deuxième ligne 2-3, et mesurant le long de cette limite deux cent quarante-huit mètres et vingt et un centièmes (248,21m) suivant une ligne ayant un gisement de 133°48’58’’.
-	vers le sud-est, la ligne 3-4, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 228°48’58’’.
-	vers le sud-ouest, par une autre partie du lot 43, dans une première ligne 4-5, et mesurant le long de cette limite deux cent quarante-sept mètres et quarante-quatre centièmes (247,44m) suivant une ligne ayant un gisement de 313°48’58’’; dans une deuxième ligne 5-6, et mesurant le long de cette limite soixante-dix-huit mètres et quatre-vingt-sept centièmes (78,87m) suivant une ligne ayant un gisement de 314°57’29’’.
-	vers le Nord-ouest, la ligne 6-1, par une autre partie du lot 43, étant le Chemin Sainte-Anne Est et mesurant le long de cette limite onze mètres et soixante-neuf centièmes (11,69m) suivant une ligne ayant un gisement de 13°46’34’’.

Superficie : 3 296,7 mètres carrés

(b)	Une partie du lot QUARANTE-TROIS (Ptie 43) dudit cadastre, désignée comme suit :
	De figure parallélogrammique, indiquée par les nombres 3, 4, 7 et 8 sur ledit plan, commençant au point « 3 » précédemment rattaché, ladite parcelle est bornée et décrite comme suit :
-	vers le nord-est, la ligne 3-7, par une partie du lot 42 décrite plus bas, et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 133°48’58’’.
-	vers le sud-est, la ligne 7-8, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 228°48’58’’.

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- vers le sud-ouest, la ligne 8-4, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 313°48’58’’.

- vers le nord-ouest, la ligne 4-3, par une autre partie du lot 43, décrite précédemment, et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 48°48’58’’.

Superficie : 100,4 mètres carrés.

Fonds Dominant

La tour, les constructions et ouvrages sont érigés sur l’emplacement suivant :

(a)	Une partie du lot quarante-deux (Ptie 42) du cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon, circonscription foncière de Lévis, désignée comme suit :
	De figure carrée, indiquée par les nombres 11, 12, 14 et 15 sur ledit plan, commençant au point « 11 » ci-après rattaché, ladite parcelle est bornée et décrite comme suit :
-	vers le NORD-OUEST, la ligne 11-14, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 49°43’36’’.
-	vers le Nord-est, la ligne 14-15, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 139°43’36’’.
-	vers le sud-est, la ligne 15-12, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 229°43’36’’.
-	vers le sud-ouest, la ligne 12-11, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 319°43’36’’.

Superficie : 48,4 mètres carrés.

(b)	Une partie du lot QUARANTE-DEUX (Ptie 42) dudit cadastre, désignée comme suit :
	De figure irrégulière, indiquée par les nombres 3, 9, 10, 11, 12 et 13 sur ledit plan, commençant au point « 3 », ci-après rattaché, ladite parcelle est bornée et décrite comme suit :
-	vers le nord-ouest, la ligne 3-9, par une autre partie du lot 42 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 48°48’58’’.

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- vers le nord-est, la ligne 9-10, par une autre partie du lot 42 et mesurant le long de cette limite cent seize mètres et quatre-vingt-six centièmes (116,86m) suivant une ligne ayant un gisement de 133°48’58’’.

- vers le nord-ouest, la ligne 10-11, par une autre partie du lot 42 et mesurant le long de cette limite cinquante mètres et soixante-douze centièmes (50,72m) suivant une ligne ayant un gisement de 49°43’36’’.

- vers le nord-est, la ligne 11-12, par une autre partie du lot 42, décrite plus haut, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 139°43’36’’.

- vers le sud-est, la ligne 12-12, par une autre partie du lot 42, et mesurant le long de cette limite soixante mètres et six centièmes (60,06m) suivant une ligne ayant un gisement de 229°43’36’’.

- vers le sud-ouest, la ligne 13-3, par une partie du lot 43, et mesurant le long de cette limite cent-vingt-trois mètres et soixante-dix centièmes (123,70m) suivant une ligne ayant un gisement de 313°48’58’’.

Superficie : 1 588,3 mètres carrés.»

Pursuant to a Deed of Right of Way entered into between Mr. Roch Desrochers and Microcell Connexions Inc., which right of way is registered on July 11, 2001 at the Land Registration Division of Levis under number 452431.

Office and Switchroom Leases

(a)

Office space situated on the 4th, 9th, 10th and 11th Floors at the building located at 1250 Rene Levesque Boulevard West, Montreal, Quebec, containing an area of approximately 124,500 square feet pursuant to a Sublease Agreement between IBM Canada Limited as Sublessor, Societe en Commandite Douze-Cinquante/Twelve-Fifty Company Limited, as Lessor and Microcell 1-2-1 Inc. (now known as Microcell Telecommunications Inc.) as Subtenant dated as of the 3rd day of February, 1995 as amended by an Amendment to Sublease dated March 28, 1996 and by a Second Amendment to Sublease dated November 22, 1996. The 11th and 9th floor has been sub-leased to Cap Gemini Ernst & Young starting January 1, 2003 and March 1, 2003 respectively. (A portion of the 10th floor representing half of the floor will also be sub-leased by Cap Gemini at a later date).

(b)

Office space situated on the 20th and 21st floors of the building located at 1250 René-Lévesque Boulevard West, Montreal, Quebec, containing an area of approximately 47,403 square feet pursuant to a Sublease Agreement between Bowater Pulp & Paper (Canada) Inc. as Sublessor, and Parent as Subtenant dated as of the 17th day of December 1998. The 20th floor has been sub-leased to PSP starting December 1, 2002.

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(c)	Office space situated on Level A and part of Level B & C at the building located at 800 de la Gauchetière West, Montreal, Quebec, containing an area of approximately 317,000 square feet pursuant to an Offer to Lease entered into between Place Bonaventure Inc. (now known as WPBI Property Management Inc.), as Lessor and Parent, as Tenant dated as of July 14th 1998, as amended by Amendments to Lease dated March 22, 1999, October 1, 2000 and June 15, 2001. A portion of level C representing 12,796 square feet has been canceled, without penalty, on July 1, 2002. The rest of Level C which represents 42,204 square feet is under negotiation for a sub-lease by January 1, 2003;
(d)	Office space situated on the 17th Floor of the building located at 20 Bay Street, Toronto, Ontario containing an area of approximately 21,350 square feet pursuant to a Lease with Omers Realty Co. made as of February 1, 1996 as amended by Lease Amending Agreements made as of May 1, 1997, May 26, 1997 and June 1, 1997.
(e)	Office space situated on the 5th and 8th Floors of the building located at 815 West Hastings Street, Vancouver, British Columbia, containing an area of approximately 14,000 square feet, pursuant to a Lease entered into between Investors Group Trust Co. Ltd. and Parent as of March 22, 1996. Since June 14, 2002 the office space has been reduced to 12,437 square feet and renewed until June 14, 2005.
(f)	Office space situated on the 20th floor of the building located at 500 – 4th Avenue S.W., Calgary, Alberta, containing an area of approximately 10,253 square feet, pursuant to a Lease entered into between O&Y Properties Inc. and Grosvenor Canada Limited and Parent as of February 7, 2001. This office space has been sub-leased to Integrated Data Corporation starting July 1, 2003.
(g)	Office space situated at 891 Charest blvd, suite 201, Quebec, Quebec, containing an area of approximately 3,875 square feet, pursuant to a Lease entered into between Téléimmeuble Inc. and Parent as of January 2000;
(h)	Switch Room and computer room space situated on the 5th Floor of the building located at 1250 Rene Levesque Boulevard West, Montreal, Quebec containing an area of approximately 8,642 square feet, pursuant to a Sublease dated as of February 3, 1995 between IBM Canada Limited as Sublessor, Societe en Commandite Douze-Cinquante/Twelve-Fifty Company Limited as Lessor and Microcell 1-2-1 Inc. (now known as Microcell Telecommunications Inc.) as Subtenant which Sublease Agreement was assigned as of March 31, 1996 and amended by an Amendment to Sublease dated April 19, 1996 and by an Second Amendment to sublease dated October 9, 2002;
(i)	Switch Room space situated on part of the 2nd Floor of the building located at 10 Bay Street, Toronto, Ontario, containing an area of approximately 8,663 square feet, pursuant to a Lease entered into between Omers Realty Co. and Microcell Telecommunications Inc. dated February 1, 1996 which Lease was assigned to

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	Borrower as of March 31, 1996 and amended by a Lease Amending Agreement to the Lease effective July 1, 1997;
(j)	Switch Room space situated on the 3rd Floor of the building located at 815 West Hastings Street, Vancouver, British Columbia, containing an area of approximately 4,788 square feet, pursuant to a Lease entered into between Investors Group Trust Co. Ltd. and Microcell Telecommunications Inc. dated March 22, 1996 which Lease was assigned to Borrower as of March 31, 1996;
(k)	Switch Room space situated on part of the 5th Floor of the building located at 630 Third Avenue South West, Calgary, Alberta, containing an area of approximately 6,280 square feet, pursuant to an Offer to Lease entered into between Shaw Communications Inc. and Borrower dated August 8, 1997;
(l)	Switch Room space situated on Level A of the building located at 800 de la Gauchetière West, Montreal, Quebec, containing an area of approximately 15,594 square feet, pursuant to a Lease Agreement dated March 16th, 1999 and August 1, 2001 between WPBI Property Management Inc. and Borrower;
(m)	Switch Room space situated on the 5th floor of the building located at 2 Robert - Specks Park Way, Mississauga, Ontario, containing an area of approximately 10,627 square feet, pursuant to a Lease Agreement dated November 1, 2000 between Clarica Life Insurance Company and Canadian Partners Fund Inc. (as Lessor) and Borrower; and
(n)	Switch Room space situated on the 1st floor of the building located at 555 sixth street, NewWestminster, British Columbia, containing an area of approximately 10,644 square feet, pursuant to a Lease Agreement dated as of November 22, 2000 between Canacemal Investment Inc. and Borrower.

Compliance with Laws and Agreements (3.6) and Defaults (3.12)

1.     Defaults under the Credit Agreement and the Notes (as these terms are defined in the Plan of Arrangement); on the Effective Date of the Plan of Arrangement these defaults will be cured pursuant to section 6.18 of the Plan of Arrangement.

Subsidiaries (3.14)

1.	2861399 Canada Inc. (Pre-Filing Parent and wholly-owned subsidiary of Microcell Telecommunications Inc.)
2.	Inukshuk Internet Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)
3.	Telcom Investments Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)

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Material Contracts (3.16)

1.	Tranche B Credit Agreement.
2.	Tranche C Credit Agreement.

Environmental Matters (3.17)

1. None

Employee Matters (3.18)

1.	Employment Agreement with Alain Rhéaume, President and Chief Operating Officer of the Borrower, providing for an indemnity of 24 months in the event of dismissal without reasonable cause.
2.	Employment Agreement with André Tremblay, President and Chief Executive Officer of Parent, providing for an indemnity of 24 months in the event of dismissal without reasonable cause.
3.	Employment Agreement with Jacques Leduc, Chief Financial Officer and Treasurer of Parent, providing for an indemnity of 24 months in the event of dismissal without reasonable cause before September 30, 2004.
4.	Retention program for key employees disclosed in Appendix G of the Information Circular.

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Intellectual Property Rights (3.20)

1. Registered Trade Marks:

(a)	FIDO registered by Borrower on April 28, 1997, registration no. TMA475,321;
(b)	FIDO registered in the United Sates by Borrower on December 11, 2001, registration no. 2,517,638;
(b)	FIDO & DESIGN registered by Borrower on February 2, 1998, registration no. TMA489,000;
(c)	FIDO & DESIGN registered in the United States by Borrower on April 16, 2002, registration no. 2,560,921;
(c)	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on February 21, 2001, registration no. TMA541,416;
(b)	FIDOMATIC registered by Borrower on June 11, 2001, registration no. TMA546,433;
(c)	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on April 19, 2002, registration no. TMA560,471;
(d)	FIDOMATIC & DESIGN registered by Borrower on June 12, 2001, registration no. TMA546,451;
(e)	FIDOMATIC & DESIGN registered in the United States by Borrower on December 17, 2002, registration no. 2 661 037
(f)	FIDO C’EST VOUS LE MAÎTRE & DESIGN registered by Borrower on March 13, 2001, registration no. TMA542,267;
(g)	FIDO YOU ARE THE MASTER & DESIGN registered by Borrower on March 13, 2001, registration no. TMA542,265;
(h)	FIDO & DESIGN registered by Borrower on February 26, 2001, registration number TMA541,562;
(i)	FIDOPRO registered by Borrower on February 27, 2001, registration no. TMA541,653;
(j)	INSTANT REPLY registered by Borrower on June 11, 2001, registration no. TMA546,429;

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(k)	RÉPONSE ÉCLAIR registered by Borrower on June 11, 2001, registration no. TMA546,430;
(l)	LA MESSAGERIE VOCALE PERFORMANCE registered by Borrower on June 12, 2001, registration no. TMA546,480;
(m)	FIDO E-MAIL registered by Borrower on June 12, 2001, registration no. TMA546,477;
(n)	COURRIEL FIDO registered by Borrower on June 12, 2001, registration no. TMA546,478;
(o)	FIDODATA registered by Borrower on February 21, 2001, registration no. TMA541,437;
(p)	PERFORMANCE VOICE MESSAGING registered by Borrower on June 12, 2001, registration no. TMA546,454;
(q)	MICROCELL registered by Pre-Filing Parent on March 30, 1999, registration no. TMA510,356;
(r)	MICROCELL SOLUTIONS & DESIGN registered by Pre-Filing Parent on September 9, 1999, registration no. TMA516,140;
(s)	MICROCELL CAPITAL & DESIGN registered by Pre-Filing Parent on September 30, 1998, registration no. TMA501,581;
(t)	MICROCELL CONNEXIONS & DESIGN registered by Pre-Filing Parent on March 29, 1999, registration no. TMA510,183;
(u)	MICROCELL LABS & DESIGN registered by Pre-Filing Parent on September 30, 1998, registration no. TMA501,578;
(v)	FIDO registered by Borrower on February 20, 2003 under no. TMA576,104;
(w)	i.FIDO registered by Borrower on March 25, 2003 under no. TMA578,101;
(x)	POPFONE registered by Pre-Filing Parent on July 8, 1994 under no. TMA430,217;
(y)	POPFONE DESIGN registered by Pre-Filing Parent on June 10, 1994 under no. TMA428,627.

2. Trade Mark Applications:

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(a)	ACCÈS FINANCES application filed by Borrower on March 9, 2000 under no. 1,050,426;
(b)	ACCESS FINANCES application filed by Borrower on March 9, 2000 under no. 1,050,425;
(c)	SERVICES I.FIDO I.FIDO SERVICES application filed by Borrower on October 5, 2000 under no. 1,077,633;
(d)	FIDO M@GAZINE application filed by Borrower on March 6, 2001 under no. 1,095,074;
(e)	MICROCELL SCP application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,248;
(f)	MICROCELL PCS application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,245;
(g)	MICROCELL SCP & DESIGN application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,246 and;
(h)	MICROCELL PCS & DESIGN application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,247;

3.	Patent Application:
(a)	METHOD AND SYSTEM FOR EFFECTING AN ELECTRONIC TRANSACTION

• Nature of interest (owner, licensee, other): Owner

• Date of Application: April 4, 2002, claiming priority of a provisional application filed April 4, 2001.

• Country of Application: United States (“US”) and Patent Cooperation Treaty, designating all countries except the US (“PCT”), respectively under no. 10/117,623 and no. PCT/CA02/00473.

Please note that both the PCT and the US applications are currently in the name of Microcell i5 inc.

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Indebtedness for Borrowed Money (3.23, 4.1(m), 6.1(d))

1.	Tranche B Credit Agreement.
2.	Tranche C Credit Agreement.
3.	First Preferred Shares.
4.	Second Preferred Shares.
5.	First Notes (if issued).
6.	Second Notes (if issued).

Permits, Licences; Authorizations (3.24)

1. Special authorization to provide Personal Communications Services (PCS) pursuant to s. 5(1)(v) of the Radiocommunication Act issued by Industry Canada on April 15, 1996 and renewed on March 29, 2001 in favour of the Borrower (formerly Microcell Connexions Inc.) together with license conditions for Personal Communications Service (PCS) licensees accepted by the Borrower on April 25, 1996 and on March 29, 2001.

Executive Office; Location of Records (5.1(xxvi))

1.	Jurisdictions in which tangible assets are located:
	Parent: Quebec: Ontario Alberta British Columbia
	Borrower: Quebec Ontario Alberta British Columbia Saskatchewan Manitoba Nova Scotia Newfoundland

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2.	Jurisdictions in which aggregate accounts receivable exceeding $50,000 per year are generated:
	Parent: Quebec
	Borrower: Quebec Ontario Alberta Saskatchewan Manitoba British Columbia
3.	Locations of Chief Executive Offices:
	Borrower, Pre-Filing Parent and Parent:
	800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec
4.	Locations of Registered Office:
	Borrower, Pre-Filing Parent and Parent:
	1250 René-Lévesque blvd. West, 38th floor, Montreal, Quebec

Liens (6.2)

1.	Act of Movable Hypothec on a commercial paper of $3,000,000 dated May 28, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
2.	Act of Movable Hypothec on a commercial paper of $1,000,000 dated October 17, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
3.	Act of Movable Hypothec on a commercial paper of $337,000 dated October 23, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.

The Pre-Filing Parent and the Borrower have also entered into a number of commercial leases for various automobile vehicles and office equipment. These leases are true leases as opposed to capital leases. Therefore the vehicles and equipment leased do not form part of the Pre-Filing Parent or the Borrower property and assets and are not capitalized in their balance sheet. The following is a summary description of these leases.

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4.	Commercial Lease Agreements with Location Fortier Inc. and Deragon Leasing Inc. concerning 78 vehicles for two, three and four year terms.
5.	Commercial Lease Agreements with IBM Canada Ltd., CIT Financial services, Pitney Bowes Leasing a division of Pitney Bowes Canada Ltd., Minolta (Montreal) Inc. and Contract Funding Group and Panasonic concerning office photocopiers and fax.
6.	Commercial lease Agreements with various automobile leasing companies concerning 44 vehicles used by employees as part of their employee benefits.

Existing Investments (6.4)

1.	Long term investments (Shares or Units)
	Canadian LNP Consortium Inc. (owned by Borrower)
	Canadian Numbering Administration Consortium Inc. (owned by Borrower)
	Canadian Portable Contribution Consortium Inc. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Borrower and Pre-Filing Parent)
	Telcom Investments Inc. (owned by Borrower)
	Saraide, Inc. (owned by Borrower)
	Argo II - The Wireless Internet Fund Limited Partnership (owned by Borrower)
	Oz Communications, Inc. (owned by Borrower)
	GSM Capital Limited Partnership (owned by Borrower and Pre-Filing Parent)
2.	Other short term instruments in the form of marketable securities, which constitute Permitted Investments, are contained in the investments accounts of the Borrower, the Parent and the Pre-Filing Parent.

Restrictive Agreements (6.9)

1.	Tranche B Credit Agreement.
2.	Tranche C Credit Agreement.

EXHIBIT A

FORM OF
ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Credit Agreement (including any letters of credit and guarantees included in such Credit Agreement) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate of [identify Lender]]
3.	Borrower:	Microcell Solutions Inc.
4.	Administrative Agent:	JPMorgan Chase Bank, Toronto Branch, as the administrative agent under the Credit Agreement
5.	Credit Agreement:	The [Cdn.$25,000,000] Credit Agreement dated as of May 1, 2003 among Microcell Solutions Inc., as Borrower, Microcell

- 2 -

Telecommunications Inc., as Parent, the Lenders parties thereto, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent, Collateral Agent and Issuing Bank.

6. Assigned Interest:

Aggregate Amount of	Amount of
Commitments/Loans	Commitment/Loans	Percentage Assigned of
for all Lenders	Assigned	Commitment/Loans1
$	$		%

Effective Date:               , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:

      Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:

      Title:

¹ Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

2

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Consented to and Accepted:2
JPMORGAN CHASE BANK, TORONTO BRANCH, as      Administrative Agent and Issuing Bank
By
	Title:
Consented to:3
MICROCELL SOLUTIONS INC.
By
	Title:

² Not required with respect to any assignment to a Lender or an Affiliate of a Lender.

³ Not required at any time after and during the occurrence of an Event of Default. Not required with respect to any assignment to a Lender or a Lender Affiliate.

3

ANNEX 1

MICROCELL TRANCHE A EXIT FACILITY AGREEMENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby, including the payment to the Administrative Agent of a processing and recordation fee of Cdn.$5,000, pursuant to Section 9.4(b) of the Credit Agreement (except in the case of an assignment to an Affiliate of the Assignor); and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Financing Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Financing Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Financing Document.

          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Financing Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Documents are required to be performed by it as a Lender.

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          2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrued subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for the periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

          3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

2

EXHIBIT B

FORM OF INTERCREDITOR AGREEMENT

EXHIBIT C

NOTICE OF BORROWING /CONTINUATION/CONVERSION

TO:	JPMORGAN CHASE BANK, TORONTO BRANCH
RE:	Tranche A Exit Facility Agreement dated as of May 1, 2003 made between, among others, the undersigned (the “Borrower”), you, as Administrative Agent, and the lenders from time to time party thereto (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”)

          We refer to the Commitments of the Lenders under the Credit Agreement and we hereby give you notice that on [insert date] we wish to obtain a Borrowing in the aggregate amount of [Canadian][U.S.]$     .

          The Borrowing requested hereby is to take the form of:

[   ]	a B/A Borrowing
[   ]	a Prime Rate Borrowing
[   ]	a Base Rate Borrowing
[   ]	a Eurodollar Borrowing

          The Contract Period in respect of the B/A Borrowing requested hereby is      days¹.

          The Interest Period in respect of the Eurodollar Borrowing requested hereby is      days².

          The funds requested hereunder are hereby requested to be disbursed to our account at [Bank], Account #     . We confirm that this account complies with the requirements of Section 5.17 of the Credit Agreement, and that the advance notice required has been provided in compliance with Section 2.2 of the Credit Agreement.

          We hereby certify, after due and careful investigation, that³:

(i) each of the representations and warranties made by the Borrower in the Credit Agreement are true and correct on and as of the date hereof except

¹ This sentence is only required in the context of a Borrowing Request for a B/A Borrowing.

² This sentence is only required in the context of a Borrowing Request for a Eurodollar Borrowing.

³ This certification need not be made on conversions or rollovers.

Note: A separate Notice of Borrowing/Continuation/Conversion must be submitted for each Type of Borrowing.

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	to the extent that (i) any change to the representations and warranties has been disclosed to the Administrative Agent and accepted by the Required Lenders, or (ii) any representation and warranty is stated to be made as of a particular time; and
(ii)	on and as of the date hereof, no Default has occurred and is continuing.

      All terms defined in the Credit Agreement and used herein have the meanings given to them in the Credit Agreement.

DATED:
	MICROCELL SOLUTIONS INC.
	By:
	Name:
	Title:
	By:
	Name:
	Title:

2

TRANCHE “A” EXIT FACILITY AGREEMENT

dated as of

May 1, 2003

among

MICROCELL SOLUTIONS INC.

as Borrower,

MICROCELL TELECOMMUNICATIONS INC.

as Parent and Guarantor,

THE LENDERS FROM TIME TO TIME PARTIES HERETO

as Lenders

and

JPMORGAN CHASE BANK TORONTO BRANCH

as Administrative Agent and Collateral Agent

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS		2
1.1	Defined Terms		2
1.2	Terms Generally		25
1.3	Accounting Terms; GAAP		25
1.4	Time		26
1.5	Permitted Liens		26
1.6	Schedules and Exhibits		26
ARTICLE 2	LOANS		26
2.1	Loans		26
2.2	Borrowing, Continuation, Conversion and Roll-Over Elections		27
2.3	Interest and Acceptance Fees		30
2.4	Repayment of Loans; Fees		31
2.5	Evidence of Debt		32
2.6	Prepayments of Loans		33
2.7	Banker’s Acceptances		34
2.8	Alternate Rate of Interest		37
2.9	Increased Costs; Illegality		37
2.10	Break Funding Payments		39
2.11	Taxes		40
2.12	Payments Generally; Pro Rata Treatment; Sharing of Set-offs		41
2.13	Currency Indemnity		43
2.14	Mitigation Obligations; Replacement of Lenders		43
2.15	Letters of Credit		44
2.16	Indemnity for Returned Payments		49
2.17	Increase in Commitments; Permitted Additional Exit Facility Debt		49
2.18	Hedging Arrangements		49
2.19	Existing Security		50
ARTICLE 3	REPRESENTATIONS AND WARRANTIES		50
3.1	Organization; Powers		50
3.2	Authorization; Enforceability		50

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TABLE OF CONTENTS
(continued)

		Page
3.3	Governmental Approvals; No Conflicts		50
3.4	Financial Condition; No Material Adverse Effect		51
3.5	Litigation		51
3.6	Compliance with Laws and Agreements		51
3.7	Taxes		52
3.8	Titles to Real Property		52
3.9	Titles to Personal Property		52
3.10	Pension Plans		52
3.11	Disclosure		52
3.12	Defaults		52
3.13	Casualties; Taking of Properties		52
3.14	Subsidiaries		53
3.15	Insurance		53
3.16	Material Contracts		53
3.17	Environmental Matters		53
3.18	Employee Matters		55
3.19	Fiscal Year		55
3.20	Intellectual Property Rights		55
3.21	Investment and Holding Company Status		55
3.22	PCS Network Ownership		56
3.23	No Indebtedness for Borrowed Money		56
3.24	Permits, Licences, etc.		56
3.25	Security Interests		56
3.26	Regulatory Compliance		57
3.27	Budget Update		57
ARTICLE 4	CONDITIONS		57
4.1	Conditions Precedent to Effectiveness of Agreement		57
4.2	Each Credit Event		61
ARTICLE 5	AFFIRMATIVE COVENANTS		62
5.1	Financial Statements and Other Information		62

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TABLE OF CONTENTS
(continued)

		Page
5.2	Existence; Conduct of Business		68
5.3	Payment of Obligations		68
5.4	Maintenance of Properties		68
5.5	Maintenance of Authorizations		68
5.6	Books and Records; Inspection Rights		69
5.7	Compliance with Laws and Material Contracts		69
5.8	Use of Proceeds and Letters of Credit		69
5.9	Further Assurances		69
5.10	Insurance		70
5.11	Operation and Maintenance of Property		70
5.12	Additional Subsidiaries; Additional Liens		70
5.13	Intentionally Deleted		70
5.14	Financial Covenants		71
5.15	Most Favoured Nations		75
5.16	Landlord Consents		76
5.17	Bank Accounts		76
ARTICLE 6	NEGATIVE COVENANTS		76
6.1	Indebtedness		76
6.2	Liens		77
6.3	Fundamental Changes		77
6.4	Investments, Loans, Advances, and Guarantees		78
6.5	Hedging Agreements		78
6.6	Restricted Payments		79
6.7	Transactions with Affiliates		79
6.8	Repayment of Debt		80
6.9	Restrictive Agreements		80
6.10	Capital Lease Obligations		80
6.11	Sales and Leasebacks		81
6.12	Pension Plan Compliance		81
6.13	Sale or Discount of Receivables		81

-iii-

TABLE OF CONTENTS
(continued)

		Page
6.14	Unconditional Purchase Obligations		81
6.15	Ownership of Shares		81
6.16	No Amendments to Material Contracts		82
ARTICLE 7	EVENTS OF DEFAULT		82
7.1	Events of Default		82
ARTICLE 8	THE ADMINISTRATIVE AGENT		86
8.1	Appointment of Agent		86
8.2	Limitation of Duties of Agent		87
8.3	Lack of Reliance on the Agent		87
8.4	Certain Rights of the Administrative Agent		88
8.5	Reliance by Administrative Agent		88
8.6	Indemnification of Agent		88
8.7	The Agent in its Individual Capacities		88
8.8	May Treat Lender as Owner		89
8.9	Successor Administrative Agent		89
8.10	Lenders to Enforce through Administrative Agent		89
8.11	Quebec Security		90
ARTICLE 9	MISCELLANEOUS		92
9.1	Notices		92
9.2	Waivers; Amendments		93
9.3	Expenses; Indemnity; Damage Waiver		94
9.4	Successors and Assigns		97
9.5	Survival		100
9.6	Counterparts; Integration; Effectiveness		100
9.7	Severability		100
9.8	Right of Set Off		100
9.9	Governing Law; Jurisdiction; Consent to Service of Process		101
9.10	WAIVER OF JURY TRIAL		101
9.11	Headings		102
9.12	Confidentiality		102

-iv- EX-4.2 11 m10142orexv4w2.htm EX-4.2

Exhibit 4.2

TRANCHE B CREDIT AGREEMENT

          THIS TRANCHE B CREDIT AGREEMENT (this “Agreement”) dated as of May 1, 2003 is entered into among Microcell Telecommunications Inc., as Parent, Microcell Solutions Inc., as Borrower, the financial institutions from time to time parties hereto, as Lenders, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent and Collateral Agent. Reference is made to the Introductory Statements below and Section 1.1 hereof for the definition of certain capitalized terms used herein.

INTRODUCTORY STATEMENTS:

A.     Pursuant to that certain Amended and Restated Credit Agreement, dated as of May 7, 1999 (as amended, supplemented or otherwise modified or restated from time to time, the “Pre-Filing Credit Agreement”), among Microcell Connexions Inc. and Microcell Solutions Inc. (collectively, the “Pre-Filing Borrowers”), Microcell Telecommunications Inc. (the “Pre-Filing Parent”), the lenders from time to time party thereto (collectively, the “Pre-Filing Lenders”), J.P. Morgan Bank Canada, as administrative agent and collateral agent for the Pre-Filing Lenders, and National Bank of Canada, as letter of credit issuing bank, the Pre-Filing Lenders made loans and advances to, issued letters of credit for and/or provided other financial accommodations to, or on behalf of, the Pre-Filing Borrowers (collectively, the “Pre-Filing Loans”);

B.     The Pre-Filing Loans and other obligations of the Pre-Filing Borrowers under the Pre-Filing Credit Agreement and the guarantors in respect thereof, together with certain obligations under certain terminated hedging arrangements with J.P. Morgan Bank Canada as a successor in interest to ABN-AMRO Bank Canada and Canadian Imperial Bank of Commerce (collectively, the “Pre-Filing Hedging Obligations”), are secured by valid, binding, enforceable and perfected liens, security interests and hypothecs in substantially all the assets of the Pre-Filing Borrowers, the Pre-Filing Parent and such guarantors thereof;

C.     On January 3, 2003, the Pre-Filing Parent, the Pre-Filing Borrowers, and certain other direct or indirect subsidiaries of the Pre-Filing Parent commenced proceedings under the Companies Creditors Arrangement Act (the “CCAA”) and the Canada Business Corporations Act (the “CBCA”); a plan of reorganization and of compromise and arrangement (as such plan of reorganization and of compromise and arrangement may be amended, modified or supplemented in accordance with its terms, the “Plan of Arrangement”) was filed with the Court on February 20, 2003;

D.     The Plan of Arrangement was sanctioned and approved by the Court on March 18, 2003;

E.     Pursuant to the Plan of Arrangement, the obligations under the Pre-Filing Credit Agreement and the Pre-Filing Hedging Obligations (collectively, “Pre-Filing Secured Claims”) are to be restructured;

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F.     Pursuant to the Plan of Arrangement and the Sanction Order, through a series of transactions, the Pre-Filing Borrowers and the Pre-Filing Parent are completing a corporate reorganization, with the result that the obligations of the Pre-Filing Borrowers and the Pre-Filing Parent have become the obligations of the Borrower and the Parent, respectively;

G.     Pursuant to the Plan of Arrangement, $300,000,000 of the Pre-Filing Secured Claims will be restated in the form of secured Canadian Dollar Loans and U.S. Dollar Loans to the Borrower, as provided hereby, and the Parent and certain subsidiaries of the Borrower and the Parent shall irrevocably and unconditionally guarantee such secured loan obligations.

          NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the Lenders, the Administrative Agent, the Parent and the Borrower hereby agree as follows.

ARTICLE 1
DEFINITIONS

1.1     Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

     “Additional Subsidiary” is defined in Section 5.12.

     “Administrative Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as administrative agent for the Lenders hereunder, or any successor Administrative Agent appointed pursuant to Section 8.9.

     “Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, such Person.

     “Agents” means the Administrative Agent and the Collateral Agent.

     “Amortization Dates” is defined in Section 2.4.

     “Amortization Payments” means, collectively, the quarterly installment payments required to be made pursuant to Section 2.4.

     “Applicable Margin” means, (i) with respect to any Prime Rate Loan or Base Rate Loan, 3.00% (300 basis points), and (ii) with respect to any Eurodollar Loan or B/A Loan, 4.00% (400 basis points).

     “Applicable Percentage” means, with respect to any Lender, the percentage of the total Loans represented by such Lender’s Loans, as listed in Schedule A.

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     “ARPU” means average retail revenue per Subscriber per month. For greater certainty, ARPU shall exclude “roaming-in charges” (i.e. roaming charges incurred by users which are not Subscribers).

     “Asset Disposition” means, with respect to any Credit Party, the sale, lease, license, transfer, assignment or other disposition of, or the expropriation, condemnation, destruction or other loss of, all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one transaction or a series of transactions (including a Sale/Leaseback Transaction), other than (a) inventory sold in the ordinary course of business upon customary credit terms, (b) sales of scrap or obsolete material or equipment which are not material in the aggregate, (c) sales or other dispositions of assets which are not in the ordinary course of business or leases of real property or personal property (under which a Credit Party is lessor), in any such case, which have a Fair Market Value less than Cdn.$2,000,000 for any transaction and less than Cdn.$2,000,000 for all such transactions in any Fiscal Year and which are no longer used or useful in the business, (d) licenses granted to third parties in the ordinary course of business, (e) property sold to any other Credit Party, and (f) any other disposition consented to by the Required Lenders. In the case of an expropriation, condemnation, destruction or other loss of any property, any insurance proceeds or other indemnity received as a result of such event may be used by the Credit Party within the 90-day period following the receipt of such insurance proceeds or other indemnity to replace the property so disposed of and such sale or disposition will not constitute an Asset Disposition.

     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

     “Authorization” means, with respect to any Person, any authorization, order, permit, approval, grant, licence, consent, right, franchise, privilege, certificate, judgment, writ, injunction, award, determination, direction, decree, by-law, rule or regulation of any Governmental Authority having jurisdiction over such Person, whether or not having the force of Law.

     “B/A Loan” means a Loan denominated in Canadian Dollars which bears interest at a rate based upon the CDOR Rate.

     “Base Rate” means, on any day, the annual rate of interest equal to the greater of (i) the annual rate of interest announced by the Administrative Agent and in effect as its base rate at its principal office in Toronto, Ontario on such day for determining interest rates on U.S. Dollar-denominated commercial loans made in Canada, and (ii) the Federal Funds Effective Rate plus 0.50%.

     “Base Rate Loan” means a Loan denominated in U.S. Dollars which bears interest at a rate based upon the Base Rate.

     “Borrower” means Microcell Solutions Inc., a CBCA corporation, and its successors and permitted assigns.

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     “Business” means, with respect to the Credit Parties, (i) the development, delivery or distribution in Canada of telecommunications services (including wireless voice, data or video services), (ii) any business or activity reasonably related thereto, including any business conducted by the Credit Parties on the Effective Date, and (iii) the acquisition, holding or exploitation of any licence relating to the delivery of the services described in clause (i) of this definition.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and Montreal, Quebec are authorized or required by applicable law to remain closed and, in the case of any U.S. Dollar-denominated Loan, also a day on which commercial banks in New York, New York are authorized or required by applicable law to remain closed and, in the case of any Eurodollar Loan, also a day on which commercial banks in London, England are authorized or required by applicable law to remain closed.

     “Canadian Court” means the Superior Court of the Province of Quebec.

     “Canadian Dollars” and “Cdn.$” refer to lawful money of Canada.

     “Cdn.$ Loans” means the Loans denominated in Canadian Dollars.

     “Capital Expenditures” means, for any period, all expenditures (whether paid in cash or accrued as a liability, including the portion of Capital Lease Obligations originally incurred during such period that are capitalized) during such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or equipment” or comparable items, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, in an amount not exceeding any insurance proceeds received in connection with such destruction or damage.

     “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “CBCA” is defined in Introductory Statement C.

     “CCAA” is defined in Introductory Statement C.

     “CDOR Rate” means, on any date, the annual rate of interest which is the rate based on an average rate applicable to Canadian Dollar banker’s acceptances for the applicable period appearing on the “Reuters Screen CDOR Page”, rounded to the nearest 1/100^th of 1% (with .005% being rounded up), at approximately 10:00 a.m., Toronto time, on such date, or if such date is not a Business Day, then on the immediately preceding Business Day, provided that if such rate does not appear on the Reuters Screen CDOR Page on such date as contemplated, then the CDOR Rate on such date shall be calculated as the arithmetic mean of the rates for the term referred to above applicable to Canadian Dollar banker’s acceptances quoted by the banks listed

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in Schedule I of the Bank Act (Canada) as of 10:00 a.m., Toronto time, on such date or, if such date is not a Business Day, then on the immediately preceding Business Day.

     “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group of Persons, acting jointly or otherwise in concert, of Equity Securities representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Securities of the Parent, and more than 30% of the issued and outstanding Equity Securities of the Parent; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Parent (as comprised on the Effective Date after giving effect to the Plan of Arrangement and the Sanction Order) by Persons who were neither (i) nominated by the board of directors of the Parent nor (ii) appointed by directors so nominated.

     “Change in Law” means (i) the adoption of any new Law after the date of this Agreement, (ii) any change in any existing Law or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or, for purposes of Section 2.9(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law, but in the case of a request, guideline or directive not having the force of law, being a request, guideline or directive with which Persons customarily comply) of any Governmental Authority made or issued after the date of this Agreement.

     “Class A Restricted Voting Shares” means the Class A Restricted Voting Shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Class B Non-Voting Shares” means the Class B Non-Voting Shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Collateral” means the property which is charged by or hypothecated under the Security Documents, and includes all property, rights and assets, present and future, of the Borrower, the Parent and those subsidiaries of the Borrower or the Parent which have provided or may hereafter provide security to the Collateral Agent (or to any trustee or “fondé de pouvoir” for or on behalf of the Collateral Agent and/or the Lenders) to secure the obligations of the Borrower, the Parent and such subsidiaries under this Agreement and the other Financing Documents.

     “Collateral Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as collateral agent and fondé de pouvoir for the Lenders hereunder, and pursuant to the Intercreditor Agreement, or any successor Collateral Agent appointed pursuant to the Intercreditor Agreement.

     “Collateral and Guarantee Requirement” means the requirement that:

(i) the Collateral Agent (or the Administrative Agent in the case of a Guarantee) shall have received (i) from each Credit Party, a counterpart of each of the Security Documents duly executed and delivered on behalf of such Credit Party, and (ii) in the case of any Person that becomes a Credit Party after the Effective

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	Date, either (as applicable) (A) a supplement to each applicable Security Document, in the form specified therein, duly executed and delivered on behalf of such Credit Party, and/or (B) additional Security Documents, in form and substance satisfactory to the Collateral Agent, duly executed and delivered on behalf of such Credit Party;
(ii)	all outstanding Equity Securities of the Borrower, each other Subsidiary owned by or on behalf of any Credit Party, and each Unrestricted Subsidiary owned by or on behalf of any Credit Party, shall have been pledged pursuant to pledge agreements, in form and substance satisfactory to the Collateral Agent, and the Collateral Agent shall have received certificates or other instruments representing all such Equity Securities, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;
(iii)	each promissory note evidencing any Indebtedness of any Credit Party or any Unrestricted Subsidiary that is owing to any other Credit Party shall have been pledged pursuant to pledge agreements, in form and substance satisfactory to the Collateral Agent, and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;
(iv)	all documents and instruments, including all PPSA financing statements or other appropriate filings, required by Law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create (or continue the creation of) the Liens intended to be created by the Security Documents and perfect or render opposable against third parties (or continue to perfect or render opposable against third parties) such Liens to the extent required by, and with the priority required by, the Security Documents, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;
(v)	the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property, duly executed and delivered by the owner of such Mortgaged Property, and (ii) such legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; and
(vi)	each Credit Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder.

     “Contract Period” means the term of any B/A Loan selected by the Borrower in accordance with Section 2.2(b)(iv) commencing on the date of such B/A Loan and expiring on a Business Day which shall be either one month, two months, three months or, if available, as determined by the Administrative Agent in good faith, six months thereafter (or such other terms as may be requested by the Borrower and approved unanimously by the Lenders), provided that (i) subject to subparagraph (ii) below, each such period shall be subject to such extensions or reductions as may be determined by the Administrative Agent to ensure that each Contract

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Period will expire on a Business Day, and (ii) no Contract Period shall extend beyond the Maturity Date.

     “Control” means, in respect of a particular Person, 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 ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

     “Credit Party” means the Parent, the Borrower, the Pre-Filing Parent, each of the Subsidiaries and any other Person which is a party to a Financing Document (other than the Administrative Agent, the Collateral Agent and the Lenders and their respective successors and assigns), but, for greater certainty, does not include any Unrestricted Subsidiary.

     “CRTC” means the Canadian Radio-television and Telecommunications Commission.

     “Currency Due” is defined in Section 2.13.

     “Default” means any event or condition which constitutes an Event of Default or which, upon notice, lapse of time or both, would, unless cured or waived, become an Event of Default.

     “Discount Rate” means (i) with respect to any Lender which is a Schedule I chartered bank under the Bank Act (Canada), as applicable to a B/A Loan being made by such Lender on any day, the CDOR Rate on such day; and (ii) with respect to any Lender which is not a Schedule I chartered bank under the Bank Act (Canada), as applicable to a B/A Loan being made by such Lender on any day, the lesser of (a) the CDOR Rate on such day, plus 0.10%, and (b) the percentage discount rate quoted by such Lender as the percentage discount rate at which such Lender would, in accordance with its normal practices, at or about 10:00 a.m., Toronto time, on such date, be prepared to purchase banker’s acceptances having a face amount and term comparable to the face amount and term of such B/A Loan.

     “EBITDA” means operating income (loss) excluding restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

     “ECF EBITDA” means operating income (loss) plus, to the extent deducted in calculating operating income (loss), non-cash restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

     “Effective Date” means the “Effective Date” as defined in the Plan of Arrangement.

     “Environmental Laws” means all federal, provincial, local or foreign laws, rules, regulations, codes, ordinances, orders, decrees, judgements, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling, release, threatened release or disposal of any Hazardous Material, or to health and safety matters.

     “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the

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Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

     “Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.

     “Eurodollar Loan” means a Loan denominated in U.S. Dollars which bears interest at a rate based upon the Eurodollar Rate.

     “Eurodollar Rate” means, with respect to any Eurodollar Loan for any Interest Period, the rate for U.S. Dollar borrowings appearing on Page LIBOR01 of the Reuters Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for U.S. Dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “Eurodollar Rate” with respect to such Eurodollar Loan for such Interest Period shall be the rate at which U.S. Dollar deposits of U.S.$5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

     “Events of Default” has the meaning specified in Section 7.1.

     “Excess Cash Flow” means, for the Credit Parties for any Fiscal Year, consolidated ECF EBITDA of the Credit Parties for such period minus the sum (without duplication) of (i) scheduled principal payments made by the Credit Parties during such Fiscal Year under this Agreement, and scheduled principal payments made by the Credit Parties during such Fiscal Year under the Tranche C Credit Agreement to the extent such payments are permitted by the Intercreditor Agreement, (ii) principal payments made by the Credit Parties during such Fiscal Year under the Tranche A Exit Facility Agreement (including under any Permitted Additional Exit Facility Debt), to the extent that such payments result in a corresponding decrease in the commitment amounts under the Tranche A Exit Facility Agreement, (iii) the principal portion of scheduled payments made by the Credit Parties during such Fiscal Year on Capital Lease Obligations to the extent such Capital Lease Obligations and payments are permitted by the Tranche A Exit Facility Agreement and this Credit Agreement, (iv) cash interest paid by the Credit Parties in respect of such Fiscal Year, (v) cash taxes applicable to such Fiscal Year and

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paid or payable by the Credit Parties prior to the date of determination, and (vi) Capital Expenditures made by Credit Parties during such Fiscal Year to the extent permitted by the Tranche A Exit Facility Agreement and this Agreement.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, income or franchise Taxes imposed on (or measured by) its taxable income or capital Taxes imposed on (or measured by) its taxable capital, in each case by Canada, or by the jurisdiction under the Laws of which such recipient is organized or in which its principal office is located or Canadian federal withholding tax imposed under the Income Tax Act solely by reason of a Lender not dealing at arm’s length with the Borrower within the meaning of the Income Tax Act other than solely by reason of the interest of such Lender in the rights and securities of the Borrower and the Guarantors acquired by such Lender pursuant to the Plan of Arrangement.

     “Fair Market Value” means (a) with respect to any asset or group of assets (other than a marketable security) at any date, the value of the consideration obtainable in a sale of such asset at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal, and (b) with respect to any marketable security at any date, the closing sale price of such marketable security on the Business Day next preceding such date, or, if there is no such closing sale price of such marketable security, the final price for the purchase of such marketable security at face value quoted on such Business Day by a financial institution of recognized standing selected by the Administrative Agent which regularly deals in securities of such type.

     “Federal Funds Effective Rate” means, for any day, the per annum rate equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System of the United States of America arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Board of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by JPMorgan Chase Bank in New York City from three Federal funds brokers of recognized standing selected by it.

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

     “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower or the Parent.

     “Financing Documents” means this Agreement, the Security Documents, the Mortgages, the Intercreditor Agreement and the Notices of Conversion/Continuation, together with any other document, instrument or agreement (other than participation, agency or similar agreements among the Lenders or between any Lender and any other bank or creditor with respect to any Indebtedness or obligations of the Borrower or any Subsidiary (as applicable) hereunder or

- 10 -

thereunder) now or hereafter entered into in connection with this Agreement, as such documents, instruments or agreements may be amended, modified or supplemented from time to time.

     “First Notes” means the first subordinated convertible 9% notes issuable by the Parent pursuant to a certain First Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “First Preferred Shares” means first preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Fiscal Quarter” means any fiscal quarter of the Borrower.

     “Fiscal Year” means any fiscal year of the Borrower.

     “Foreign Lender” means any Lender that is a non-resident of Canada for Canadian tax purposes and not an “authorized foreign bank” under Section 2 of the Bank Act (Canada).

     “FPNV Shares” means the first preferred non-voting shares in the capital of the Parent.

     “FPV Shares” means the first preferred voting shares in the capital of the Parent.

     “GAAP” means generally accepted accounting principles in Canada as in effect from time to time.

     “Governmental Authority” means the Government of Canada, any other nation or any political subdivision thereof, whether provincial, state, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, fiscal or monetary authority or other authority regulating financial institutions, and any other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including the Basel Committee on Banking Supervision of the Bank for International Settlements.

     “Guarantee” of or by any Person (in this definition, the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (in this definition, the “primary credit party”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital solvency, or any other balance sheet, income statement or other financial statement condition or liquidity of the primary credit party so as to enable the primary credit party to pay such Indebtedness or other obligation, or (d) as an account party in respect of any letter of credit or letter of guarantee issued to support such Indebtedness or other obligation.

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     “Hazardous Materials” means any substance, product, liquid, waste, pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid matter, organic or inorganic matter, fuel, micro-organism, ray, odour, radiation, energy, vector, plasma, constituent or material which (a) is or becomes listed, regulated or addressed under any Environmental Law, or (b) is, or is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of pollution or contamination under any Environmental Law, including, asbestos, petroleum and polychlorinated biphenyls, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

     “Income Tax Act” means the Income Tax Act (Canada), as amended from time to time.

     “Indebtedness” of any Person includes, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (j) all obligations, contingent or otherwise, of such Person in respect of banker’s acceptances, and (k) the net amount of obligations of such Person (determined on a marked-to-market basis) under Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general or limited partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. For greater certainty, “Indebtedness” does not include short-term trade debt incurred in the ordinary course of business.

     “Indemnified Taxes” means all Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning specified in Section 9.3(b).

     “Information Circular” means the Information Circular and Proxy Statement dated February 17, 2003 issued by the Pre-Filing Parent, Pre-Filing Borrowers and certain of their subsidiaries in connection with the Plan of Arrangement.

     “Intercreditor Agreement” means an Intercreditor and Collateral Agency Agreement substantially in the form attached as Exhibit B, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

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     “Interest Payment Date” means, (a) in the case of any Loan other than a Eurodollar Loan or a B/A Loan, the first Business Day of each month, and (b) in the case of a Eurodollar Loan, the last day of each Interest Period relating to such Eurodollar Loan, provided that if an Interest Period for any Eurodollar Loan is of a duration exceeding 90 days, then “Interest Payment Date” shall also include each date which occurs at each 90-day interval during such Interest Period.

     “Interest Period” means, with respect to a Eurodollar Loan, the period commencing on the first day of such Loan and ending on the numerically corresponding day in the calendar month that is 30, 60, 90 or 180 days thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the immediately succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period pertaining to a Eurodollar Loan that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (iii) no Interest Period shall extend beyond any date that any principal payment or prepayment is scheduled to be due unless the aggregate principal amount of Prime Rate Loans, Base Rate Loans, B/A Loans and Eurodollar Loans which have Interest Periods or Contract Periods which will expire on or before such date, less the aggregate amount of any other principal payments or prepayments due during such Interest Period, is equal to or in excess of the amount of such principal payment or prepayment, and (iv) no Interest Period shall extend beyond the Maturity Date. For purposes hereof, the date of a Loan initially shall be the Effective Date and, in the case of a converted or continued Loan, thereafter shall be the effective date of the most recent conversion or continuation of such Loan.

     “Investment” means, as applied to any Person (the “investor”), any direct or indirect purchase or other acquisition by the investor of, or a beneficial interest in, Equity Securities of any other Person, including any exchange of Equity Securities for Indebtedness, or any direct or indirect loan, advance (other than advances to employees for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by the investor to any other Person, including all Indebtedness and accounts receivable owing to the investor from such other Person that did not arise from sales or services rendered to such other Person in the ordinary course of the investor’s business, or any direct or indirect purchase or other acquisition of bonds, notes, debentures or other debt securities of, any other Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment minus any amounts (a) realized upon the disposition of assets comprising an Investment (including the value of any liabilities assumed by any Person other than the Credit Parties in connection with such disposition), (b) constituting repayments of Investments that are loans or advances or (c) constituting cash returns of principal or capital thereon (including any dividend, redemption or repurchase of equity that is accounted for, in accordance with GAAP, as a return of principal or capital).

     “Judgment Currency” is defined in Section 2.13.

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     “Laws” means all federal, provincial, municipal, foreign and international statutes, acts, codes, ordinances, decrees, treaties, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards or any provisions of the foregoing, including general principles of common and civil law and equity, and all policies, practices and guidelines of any Governmental Authority binding on or affecting the Person referred to in the context in which such word is used (including, in the case of tax matters, any accepted practice or application or official interpretation of any relevant taxation authority); and “Law” means any one or more of the foregoing.

     “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of such Lender, or (ii) any Person that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender, and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

     “Lenders” means the Persons listed as lenders on Schedule A and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

     “Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, security interest, royalty interest, adverse claim, defect of title or right of set off in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease, title retention agreement or consignment agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to any asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, (d) any netting arrangement, defeasance arrangement or reciprocal fee arrangement, and (e) any other arrangement having the effect of providing security.

     “Loan” is defined in Section 2.1.

     “Material Adverse Change” means any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its subsidiaries taken as a whole, which affect the ability of the Borrower to timely pay any amounts owing under the Credit Agreement or fulfil any other covenant or obligation of a material nature arising under the Financing Documents, or (b) the validity or enforceability of any of the Financing Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.

     “Material Contract” means any contract, licence or agreement (i) to which any Credit Party is a party, (ii) which is material to, or necessary in, the operation of the business of the Credit Parties, and (iii) which the Credit Parties cannot promptly replace by an alternative and comparable contract with comparable commercial terms.

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     “Material Indebtedness” means Indebtedness of any one or more of the Credit Parties, other than Indebtedness hereunder, the aggregate principal amount of which exceeds Cdn.$5,000,000.

     “Maturity Date” means December 31, 2008.

     “Minimum Denomination” is defined in Section 2.1.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Mortgage” means a mortgage, debenture, deed of trust, hypothec, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be satisfactory in form and substance to the Collateral Agent.

     “Mortgaged Property” means, initially, each parcel of real property and the improvements thereto owned by a Credit Party and identified as a Mortgaged Property on Schedule B, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12.

     “Net Proceeds” means, (a) with respect to any Asset Disposition, the gross amount received by the Credit Parties from such Asset Disposition, including proceeds of any insurance policies received by the Credit Parties in connection with such Asset Disposition and amounts received by the Credit Parties pursuant to any expropriation proceeding or condemnation proceeding in connection with such Asset Disposition, minus the sum of (i) the amount, if any, of all Taxes paid or payable by the Credit Parties directly resulting from such Asset Disposition (including the amount, if any, estimated by such Credit Party in good faith at the time of such Asset Disposition for Taxes payable by the Credit Parties on or measured by net income or gain resulting from such Asset Disposition, taking into account any Tax losses or credits available or to be available to the Credit Parties at the time such Taxes are payable that are not used to offset other income or gains), and (ii) the reasonable out-of-pocket costs and expenses incurred by the Credit Parties in connection with such Asset Disposition (including reasonable brokerage commissions and customary fees and expenses of counsel, investment bankers and other advisors paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties), and (b) with respect to any issuance of Equity Securities issued to a Person which is not another Credit Party, the gross amount received by the Credit Parties from such issuance of Equity Securities, minus the reasonable out-of-pocket costs and expenses incurred by the Credit Parties in connection with such issuance of Equity Securities (including reasonable legal, underwriting and brokerage fees and expenses paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties). For greater certainty, the Net Proceeds in respect of the issuance of Equity Securities to a Credit Party shall be nil.

     “Notes” means the First Notes and the Second Notes.

     “Notice of Continuation/ Conversion” has the meaning set forth in Section 2.2(b).

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     “Parent” means Microcell Telecommunications Inc. (incorporated on April 28, 2003, being New Microcell for purposes of the Plan of Arrangement), a CBCA corporation, and its successors and permitted assigns.

     “Parent Articles of Incorporation” means the Articles of Incorporation of the Parent as in effect on the Effective Date.

     “Participant” has the meaning set forth in Section 9.4 (d).

     “Payment Office” means the Administrative Agent’s office located at Suite 1800, South Tower, Royal Bank Plaza, Toronto, Ontario, Attention: Corporate Banking Officers, (or such other office or individual as the Administrative Agent may hereafter designate in writing to the other parties hereto).

     “PCS Network” means the digital mobile PCS network owned and operated by the Borrower.

     “Pension Plan” means any pension benefit plan in respect of which any Credit Party makes or has made contributions in respect of its employees.

     “Perfection Certificate” means a certificate in the form of Exhibit A to the general security agreements provided by the Credit Parties pursuant to Section 4.1(r)(ii), or in any other form approved by the Collateral Agent.

     “Permitted Additional Exit Facility Debt” means secured Indebtedness, in an aggregate principal amount not exceeding an amount equal to Cdn.$75,000,000 less the principal amount of the Tranche A Exit Facility on the Effective Date, incurred by the Borrower at any time after the Effective Date, by way of an increase in the “Commitments” under the Tranche A Exit Facility.

     “Permitted Investments” means:

(i)	direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of Canada or of any Canadian province), in each case maturing within one year from the date of acquisition thereof;
(ii)	direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(iii)	investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating from

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	Dominion Bond Rating Service of R-1 (Low) or better, from Moody’s of P-1 or better, or from Standard and Poor’s Corporation of A-1 or better;
(iv)	investments in certificates of deposit, banker’s acceptances and time deposits maturing within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any Lender, any Schedule I chartered bank under the Bank Act (Canada), any domestic office of any chartered bank organized under the laws of Canada which has a combined capital surplus and undivided profits of not less than Cdn.$500,000,000 or by any Affiliate of any such chartered bank provided that the obligations of such Affiliate are unconditionally guaranteed by such chartered bank or any financial institution subject to regulation by the Federal Reserve Board which has a combined capital surplus and undivided profits of not less than U.S.$500,000,000 or by any Affiliate of any such financial institution provided that the obligations of such Affiliate are unconditionally guaranteed by such financial institution;
(v)	fully collateralized repurchase agreements with a term of not more than 270 days for securities described in clauses (i), (ii) and (iii) above and (vi) below (but without regard to the maturity dates described therein) and entered into with a financial institution satisfying the criteria described in clause (iv) above; provided that any repurchase agreement relating to securities with a maturity date of more than 270 days includes a “mark to market” provision which is satisfactory to the Administrative Agent; and
(vi)	marketable and freely-tradeable securities evidencing direct obligations of corporations, hospitals, municipal boards or school boards having, at the date of acquisition, a rating from Dominion Bond Rating Service of A or better, from Moody’s of A-2 or better, or from Standard and Poor’s Corporation of A or better, in each case maturing within 270 days from the date of acquisition thereof.

     “Permitted Liens” means:

(i)	Liens in favour of the Tranche A Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche A Exit Facility Agreement (including any Permitted Additional Exit Facility Debt), and Liens in favour of the Tranche C Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche C Credit Agreement;
(ii)	Liens in favour of the Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) for the obligations of the Borrower and other Credit Parties under or pursuant to the Financing Documents, and Liens granted pursuant to the Pre-Filing Credit Agreement;
(iii)	Liens granted by a Credit Party in favour of another Credit Party in order to secure any of its Indebtedness to the other Credit Party, provided that such Liens

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	are subject to assignment, payment subordination and Lien subordination arrangements satisfactory to the Administrative Agent;
(iv)	Purchase Money Liens and Liens securing Capital Lease Obligations securing Indebtedness to the extent permitted by Section 6.1(g);
(v)	Liens imposed by any Governmental Authority for Taxes not yet due and delinquent or which are being contested in good faith in accordance with Section 5.3, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties;
(vi)	carrier’s, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction and other like Liens arising by operation of Law, arising in the ordinary course of business, which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties, provided that the Credit Parties shall have set aside on its books reserves deemed adequate therefor and not resulting in qualification by auditors;
(vii)	statutory Liens incurred or pledges or deposits made under worker’s compensation, unemployment insurance and other social security legislation;
(viii)	deposits to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature (other than for borrowed money) incurred in the ordinary course of business, and Liens in respect of cash collateral to secure reimbursement obligations in respect of letters of credit (other than letters of credit issued pursuant to the Tranche A Exit Facility Agreement), provided that, in each such case, such deposits or Liens existed on the Effective Date (and have not been extended or renewed after the Effective Date) and the amount of all such deposits and cash collateral shall not exceed Cdn.$4,500,000 in the aggregate at any time;
(ix)	servitudes, easements, rights-of-way, restrictions and other similar encumbrances on real property imposed by Law or incurred in the ordinary course of business and encumbrances consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minor imperfections in title thereto which, in the aggregate, are not material, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Credit Parties;
(x)	Liens of or resulting from any judgement or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Credit Parties shall at any time in good faith be prosecuting an appeal or proceeding for review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;

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(xi)	undetermined or inchoate Liens and charges arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Law or of which written notice has not been duly given in accordance with applicable Law or which although filed or registered, relate to obligations not due or delinquent;
(xii)	the rights reserved to or vested in Governmental Authorities by statutory provisions or by the terms of leases, licenses, franchises, grants or permits, which affect any land, to terminate the leases, licenses, franchises, grants or permits or to require annual or other periodic payments as a condition of the continuance thereof;
(xiii)	securities to public utilities or to any municipalities or Governmental Authorities or other public authority when required by the utility, municipality or Governmental Authorities or other public authority in connection with the supply of services or utilities to the Credit Parties;
(xiv)	Liens or covenants restricting or prohibiting access to or from lands abutting on controlled access highways or covenants affecting the use to which lands may be put; provided that such Liens or covenants do not materially and adversely affect the use of the lands by the Credit Parties;
(xv)	Liens consisting of royalties payable with respect to any asset or property of the Credit Parties existing as of the Effective Date, provided that the existence of any such Lien on any material property or asset of the Credit Parties shall have been disclosed in writing to the Lenders prior to the Effective Date;
(xvi)	statutory Liens incurred or pledges or deposits made in favour of a Governmental Authority to secure the performance of obligations of the Credit Parties under Environmental Laws to which any assets of the Credit Parties are subject;
(xvii)	a Lien granted by a Credit Party to a landlord to secure the payment of arrears of rent in respect of leased property in the Province of Quebec leased from such landlord, provided that such Lien is limited to the assets located at or about such leased property; and

any extension, renewal or replacement of any of the foregoing; provided that the Liens permitted hereunder shall not be extended to cover any additional Indebtedness of the Credit Parties or their property (other than a substitution of like property), except Liens in respect of Purchase Money Liens and Capital Lease Obligations as permitted by (iv) above.

     “Permitted Subordinated Refinancing Debt” means Indebtedness of the Parent that is used to refinance, replace, defease or refund, in whole or in part, the Indebtedness hereunder, provided that if, after the incurrence and application of such Indebtedness to refinance, replace, defease or refund, in whole or in part, the Indebtedness hereunder, there will still be Indebtedness outstanding hereunder, then (i) the principal amount of such Indebtedness will not exceed the principal amount of the Indebtedness so refinanced, replaced, defeased or refunded, plus any

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other amounts required to be paid in connection therewith and the reasonable and customary fees and expenses incurred in connection therewith, (ii) no material terms applicable to such Indebtedness (including the covenants and events of default) will be materially less favourable to the Parent, the Borrower or the Lenders than the terms that are applicable hereunder, (iii) the covenants contained therein will be less restrictive than the covenants contained herein, (iv) there will be no principal amortization payments (including any sinking fund therefor) on such Indebtedness before the date which is six months after the Maturity Date, (v) such Indebtedness will mature at least six months after the Maturity Date, (vi) such Indebtedness will be Indebtedness of the Parent only, and will not be Guaranteed by the Borrower, (vii) such Indebtedness will be unsecured, (viii) such Indebtedness will accrue interest at a rate determined in good faith by the board of directors of the Parent to be a market rate of interest for such Indebtedness at the time of issuance thereof, and (ix) such Indebtedness will be otherwise on terms and conditions satisfactory to the Administrative Agent; provided, however, that the restrictions in subparagraphs (ii) and (ix) above shall not apply to pricing of such Indebtedness.

     “Person” includes any natural person, corporation, company, limited liability company, trust, joint venture, association, incorporated organization, partnership, Governmental Authority or other entity.

     “Plan of Arrangement” is defined in Introductory Statement C.

     “PPSA” means the Personal Property Security Act (Ontario), as amended from time to time, or the analogous legislation in any other relevant jurisdiction.

     “Pre-Filing Borrowers” is defined in Introductory Statement A.

     “Pre-Filing Credit Agreement” is defined in Introductory Statement A.

     “Pre-Filing Lenders” is defined in Introductory Statement A.

     “Pre-Filing Loans” is defined in Introductory Statement A.

     “Pre-Filing Parent” is defined in Introductory Statement A.

     “Prime Rate” means, on any day, the annual rate of interest equal to the greater of (i) the annual rate of interest announced by the Administrative Agent and in effect as its prime rate at its principal office in Toronto, Ontario on such day for determining interest rates on Canadian Dollar-denominated commercial loans in Canada, and (ii) the annual rate of interest equal to the sum of (A) the one-month CDOR Rate in effect on such day, plus (B) 1.00%.

     “Prime Rate Loan” means a Loan denominated in Canadian Dollars which bears interest at a rate based upon the Prime Rate.

     “Purchase Money Lien” means a Lien taken or reserved in personal property to secure payment of all or part of its purchase price, provided that such Lien (i) secures an amount not exceeding the lesser of the purchase price of such personal property and the Fair Market Value of such personal property, (ii) extends only to such personal property and its proceeds, and (iii) is granted prior to or within 30 days after the purchase of such personal property.

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     “Quarterly Date” means the last day of each of March, June, September, and December in each calendar year.

     “Radiocom Licences” means all Authorizations issued to any Credit Party to operate wireless PCS communication systems in Canada pursuant to the provisions of the Radiocommunication Act (Canada).

     “Register” has the meaning set forth in Section 9.4(b).

     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

     “Required Lenders” means, at any time, Lenders with Loans representing more than 50% of the aggregate amount of Loans outstanding.

     “Responsible Officer” means, with respect to any Person (other than a natural person), the chairman, the president, any vice president, the chief executive officer or the chief operating officer, and, in respect of financial or accounting matters, any Financial Officer of such Person; unless otherwise specified, all references herein to a Responsible Officer mean a Responsible Officer of the Borrower.

     “Restricted Payment” shall mean, with respect to any Person, any payment by such Person (i) of any dividends on any of its Equity Securities, (ii) on account of, or for the purpose of setting apart any property for a sinking or other analogous fund for, the purchase, redemption, retirement or other acquisition of any of its Equity Securities or any warrants, options or rights to acquire any such shares, or the making by such Person of any other distribution in respect of any of its Equity Securities, (iii) of any principal of or interest or premium on, or of any amount in respect of, a sinking or analogous fund or defeasance fund for any Indebtedness of such Person ranking in right of payment subordinate to any liability of such Person under the Financing Documents, (iv) of any principal of or of any amount in respect of a sinking or analogous fund or defeasance fund for any Indebtedness of such Person to a shareholder of such Person or to an Affiliate of a shareholder of such Person, (v) in respect of an Investment (other than a Permitted Investment), or (vi) of any management, consulting or similar fee or any bonus payment or comparable payment, or by way of gift or other gratuity, to any Affiliate of such Person or to any director or officer thereof.

     “Rolling Period” means each Fiscal Quarter taken together with the three immediately preceding Fiscal Quarters.

     “Sale/Leaseback Transaction” means any arrangement between a Credit Party and another Person (other than another Credit Party) providing for the leasing by the Credit Party of property which has been or is to be sold or transferred by the Credit Party to such other Person.

     “Sanction Order” means the order of the Canadian Court sanctioning the Plan of Arrangement, dated March 18, 2003, as such order may be amended, modified or supplemented in accordance with the terms of the Plan of Arrangement.

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     “Second Notes” means the second subordinated convertible 9% notes issuable by the Parent pursuant to a certain Second Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “Second Preferred Shares” means the second preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Second Voting Instruments” means (i) SPV Shares or (ii) Second Notes together with SPV2 Shares.

     “Security Documents” means the documents listed in Section 4.1(r).

     “SPNV Shares” means the second preferred non-voting shares in the capital of the Parent.

     “SPV Shares” means the second preferred voting shares in the capital of the Parent.

     “Subscriber” means an end user of the Borrower’s Fido wireless communication services that has been assigned a mobile identification number by the Borrower and whose mobile identification number has been activated on the Borrower’s billing system or platform such that the Borrower can record and bill the airtime used by that end user. Notwithstanding the foregoing, a Subscriber does not include (a) any mobile identification numbers activated for the Borrower’s agents, sales representatives or employees, or for demonstration purposes or other numbers, which do not generate revenue for the Borrower on local usage; (b) any end user whose mobile identification number has been deactivated or should have been deactivated by the Borrower in accordance with its standard credit policies; or (c) any mobile identification numbers activated for resellers or wholesalers of the Borrower’s services.

     “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, limited partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, limited partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

     “Subsidiary” means any subsidiary of the Parent (other than the Borrower and any Unrestricted Subsidiary).

     “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or

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similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Credit Parties shall be a Swap Agreement.

     “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, unemployment insurance payments and workers’ compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties with respect thereto, imposed by any Governmental Authority (including federal, state, provincial, municipal and foreign Governmental Authorities), and whether disputed or not.

     “Tranche A Exit Facility” means the secured revolving credit facility, in the aggregate principal amount of at least $25,000,000 and not more than $75,000,000, established in favour of the Borrower as contemplated in Section 7.3(c)(i) of the Plan of Arrangement, and includes any Permitted Additional Exit Facility Debt.

     “Tranche A Exit Facility Agreement” means the credit facility agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche A Exit Facility, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche A Lenders” means the lenders under the Tranche A Exit Facility Agreement.

     “Tranche C Credit Agreement” means the credit agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche C Loans, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche C Lenders” means the lenders under the Tranche C Credit Agreement.

     “Tranche C Loans” means the secured non-revolving term loans in the aggregate principal amount of Cdn.$50,000,000 owing by the Borrower to the Tranche C Lenders under the Tranche C Credit Agreement, as contemplated in Section 7.3(c)(ii) of the Plan of Arrangement.

     “Transactions” means the execution, delivery and performance by the Borrower and the other Credit Parties of this Agreement and the other Financing Documents.

     “Type”, when used in reference to any Loan, refers to whether the rate of interest on such Loan is determined by reference to the Prime Rate, the Base Rate, the Discount Rate or the Eurodollar Rate.

     “Unrestricted Subsidiary” means Inukshuk Internet Inc. and Telcom Investments Inc. (but in the case of Telcom Investments Inc., only for so long as its sole activity is serving as general partner of GSM Capital Partners), and their respective successors and permitted assigns.

     “U.S. Dollars” and “U.S.$” refer to lawful money of the United States of America.

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     “U.S.$ Equivalent” means, at the date of determination, the amount of U.S. Dollars that the Administrative Agent could purchase, in accordance with its normal practice, with a specified amount of Canadian Dollars based on the Bank of Canada noon spot rate on such date.

     “U.S.$ Hedges” is defined in Section 5.13.

     “U.S.$ Loans” means the Loans denominated in U.S. Dollars.

     “Warrants” means, collectively, the 2005 Warrants and the 2008 Warrants.

     “2005 Warrants” means 2-year warrants of the Parent entitling the holders thereof to subscribe for Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, at an exercise price per share of Cdn.$19.91, issued pursuant to a certain warrant indenture dated May 1, 2003 between the Parent and Computershare Trust Company of Canada.

     “2008 Warrants” means 5-year warrants of the Parent entitling the holders thereof to subscribe for Class A Restricted Voting Shares or Class B Non-Voting Shares, as the case may be, at an exercise price per share of Cdn.$20.69, issued pursuant to a certain warrant indenture dated May 1, 2003 between the Parent and Computershare Trust Company of Canada.

     “wholly-owned subsidiary” of a Person means any subsidiary of such Person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the equity or 100% of the ordinary voting power or 100% of the general partnership or membership interests are, at the time any determination is being made, owned, controlled or held by such Person or one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person.

1.2     Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “or” is disjunctive; the word “and” is conjunctive. The word “shall” is mandatory; the word “may” is permissive. The words “to the knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by the Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by such Responsible Officer of that Person). Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference to such statute or section as amended, restated or re-enacted from time to time, (c) any

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reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “this Agreement”, “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement (as the same may be amended, supplemented or otherwise modified or restated from time to time) in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

1.3     Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. All calculations for the purposes of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of this Agreement and used in the preparation of the financial statements of the Borrower and the Credit Parties referred to in Section 5.1. For greater certainty, should the classification given to the First Notes and Second Notes or the First Units and Second Units (as defined in the Plan of Arrangement) change under GAAP, such that the Notes or Units would be treated as debt instead of equity, the parties hereto acknowledge and agree that, for the purposes of calculating, and compliance with, the financial ratios and financial covenants set forth hereunder, the classification given to the said Notes and Units as at the date of this Agreement shall be the classification used until the termination of this Agreement. Any financial ratios required to be maintained by the Borrower and the Credit Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement. In the event of a change in GAAP, the Borrower and the Administrative Agent shall negotiate in good faith to revise (if appropriate) such ratios and covenants to reflect GAAP as then in effect, and any new ratio or covenant shall be subject to approval by the Required Lenders. In the event that such negotiation is successful, all calculations thereafter made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of such revision.

1.4      Time. All time references herein shall, unless otherwise specified, be references to local time in Toronto, Ontario. Time is of the essence of this Agreement and the other Financing Documents.

1.5      Permitted Liens. Any reference in any of the Financing Documents to Permitted Liens is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien created by any of the Financing Documents to any Permitted Liens.

1.6      Schedules and Exhibits. The following Schedules and Exhibits are attached to and form part of this Agreement:

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SCHEDULES:
Schedule A	- -	Lenders Loans
Schedule B	- -	Disclosed Matters
EXHIBITS:
Exhibit A	- -	Form of Assignment and Assumption
Exhibit B	- -	Form of Intercreditor Agreement
Exhibit C	- -	Form of Notice of Continuation/Conversion

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ARTICLE 2
LOANS

2.1     Loans. Subject to the terms and conditions and relying upon the representations, warranties and covenants herein set forth, each of the parties hereto agrees that, effective as of the Effective Date, each Lender’s pro rata share of $300,000,000 of the Pre-Filing Secured Claims owing by the Borrower to each Lender in respect of the Pre-Filing Loans and/or the Pre-Filing Hedging Obligations shall be restructured as, and shall thereafter take the form of, loans under this Agreement (each a “Loan”). The initial amount of, and the currency of, each Lender’s Loans as at the Effective Date will be as set forth in Schedule A; provided that the aggregate outstanding principal amount of Cdn.$ Loans shall be Cdn.$104,800,986, and the aggregate outstanding principal amount of U.S.$ Loans shall be the U.S.$ Equivalent of Cdn.$195,199,014 as of the Effective Date. Cdn.$ Loans shall consist entirely of Prime Rate Loans and B/A Loans, and U.S.$ Loans shall consist entirely, subject to Section 2.8, of Base Rate Loans and Eurodollar Loans, in each case as the Borrower may request in accordance herewith. The Cdn.$ Loans shall initially be Prime Rate Loans. The U.S.$ Loans shall initially be Base Rate Loans. Without limitation of any of the foregoing, the Borrower hereby acknowledges and agrees that its liability in respect of the Loans shall be absolute and unconditional. Nothing in this Agreement or in any other Financing Document shall be construed as a commitment by any Lender to make any additional loan or other credit available under this Agreement or in any other Financing Document. At the commencement of each Contract Period for any B/A Loan or Interest Period for any Eurodollar Loan, such Loan shall be in an aggregate amount that is an integral multiple of $500,000 (the “Minimum Denomination”) and not less than $5,000,000, in each case measured in the currency of such Loan. Cdn.$ Loans and U.S.$ Loans of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 5 B/A Loans or 5 Eurodollar Loans outstanding by each Lender. The Lenders acknowledge that the Loans and the Liens granted as security therefor are subordinated in the manner and to the extent provided in the Intercreditor Agreement.

2.2     Continuation, Conversion and Roll-Over Elections.

(a) The Borrower may:

(i)	elect, as of any Business Day, in the case of Prime Rate Loans, to convert any Prime Rate Loans (or any part thereof in an amount not less than Cdn.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof) into B/A Loans;
(ii)	elect, as of the last day of the applicable Contract Period, to roll over any B/A Loans which have Contract Periods expiring on such day (or any part thereof in an amount not less than Cdn.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof), or to convert such B/A Loans into Prime Rate Loans;
(iii)	elect, as of any Business Day, in the case of Base Rate Loans, to convert any Base Rate Loans (or any part thereof in an amount not less than

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	U.S.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof) into Eurodollar Loans; or
(iv)	elect, as of the last day of the applicable Interest Period, to continue any Eurodollar Loans which have Interest Periods expiring on such day (or any part thereof in an amount not less than U.S.$5,000,000, or that is in an integral multiple of the Minimum Denomination in excess thereof), or to convert such Eurodollar Loans into Base Rate Loans;

	provided that (i) if at any time the aggregate amount of Eurodollar Loans with respect to any Interest Period is reduced, by payment, prepayment or conversion, to less than U.S.$5,000,000, such Eurodollar Loans shall automatically convert into Base Rate Loans upon the expiration of the then current Interest Period, and (ii) B/A Loans may not be rolled over if the amount remaining, after partial conversion into Prime Rate Loans upon the expiration of the applicable Contract Period, is less than Cdn.$5,000,000, and such amount remaining shall automatically convert into Prime Rate Loans upon the expiration of such Contract Period ; provided further that if the Notice of Continuation/Conversion shall fail to specify the duration of the Contract Period or Interest Period with respect to any B/A Loan or Eurodollar Loan, such Contract Period or Interest Period, as applicable, shall be one month.
(b)	The Borrower shall deliver a notice of continuation/conversion (“Notice of Continuation/Conversion”), in the form attached hereto as Exhibit C, to the Administrative Agent not later than 12:00 noon (Toronto, Ontario time) at least three (3) Business Days in advance of the continuation/conversion date, if the Loans are to be converted into or continued as B/A Loans or Eurodollar Loans, as applicable, and specifying (i) the proposed continuation/conversion date; (ii) the aggregate amount of Loans to be converted or renewed, and the currency of such Loans; (iii) the Type of Loans resulting from the proposed conversion or continuation; and (iv) the duration of the requested Interest Period or Contract Period, as applicable; provided that the Borrower may not select an Interest Period or Contract Period that ends after the Maturity Date, and provided further that the Borrower may notify the Administrative Agent by telephone by such time, provided that any such telephone notice is promptly confirmed by a Notice of Confirmation/Conversion. If, upon the expiration of any Interest Period or Contract Period applicable to Eurodollar Loans or B/A Loans, respectively, the Borrower has failed to deliver timely a Notice of Continuation/Conversion to be applicable to such Eurodollar Loans or B/A Loans, or if any Default or Event of Default then exists, the Borrower shall be deemed to have elected to convert such Eurodollar Loans or B/A Loans into Base Rate Loans or Prime Rate Loans, respectively, effective as of the expiration date of such Interest Period or Contract Period.
(c)	The Administrative Agent will promptly notify each Lender of its receipt of a Notice of Continuation/Conversion. All conversions and continuations shall be

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made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Lender.

2.3     Interest and Acceptance Fees.

(a)	Each Prime Rate Loan shall bear interest (computed in arrears on the basis of the actual number of days elapsed over a year of 365 days or 366 days, as the case may be) at a rate per annum equal to the Prime Rate plus the Applicable Margin. Each Base Rate Loan shall bear interest (computed in arrears on the basis of the actual number of days elapsed over a year of 365 days or 366 days, as the case may be) at a rate per annum equal to the Base Rate plus the Applicable Margin. Each B/A Loan shall bear interest (computed in advance on the basis of the actual number of days in the relevant Contract Period) over a year of 365 days or 366 days (as the case may be) at the Discount Rate plus the Applicable Margin. Each Eurodollar Loan shall bear interest (computed in arrears on the basis of the actual number of days in the relevant Interest Period over a year of 360 days) at the Eurodollar Rate for the Interest Period in effect for such Eurodollar Loan plus the Applicable Margin.
(b)	Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan.
(c)	Accrued interest on each Loan (other than B/A Loans) shall be payable in arrears on each Interest Payment Date and, in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. Interest on each B/A Loan shall be payable in advance on the first day of the Contract Period applicable thereto.
(d)	All interest hereunder shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Prime Rate, Base Rate, Eurodollar Rate or Discount Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
(e)	For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.

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(f) If any provision of this Agreement would oblige the Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by Law or so result in a receipt by that Lender of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:

(i)	first, by reducing the amount or rate of interest required to be paid to the affected Lender under this Section 2.3; and
(ii)	thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid to the affected Lender which would constitute interest for purposes of Section 347 of the Criminal Code (Canada).

2.4     Repayment of Loans. The Borrower hereby unconditionally promises to pay to the Administrative Agent, for the account of the Lenders, the unpaid principal amount of all of the Loans on the Maturity Date. In addition, the Borrower shall pay to the Administrative Agent, for the account of the Lenders, quarterly instalments in respect of the Loans on each March 31, June 30, September 30 and December 31 (the “Amortization Dates”), commencing on June 30, 2003, in the amounts and on the dates set forth below (in each case as reduced by the application of any prepayments made pursuant to Section 2.6). Repayments shall be applied pro rata against all Loans outstanding hereunder, and shall be made in the currency of the applicable Loan being repaid. No payment on account of any Loan (including any prepayment) may be reborrowed.

	Amount
	(being a percentage of the original
Date	principal mount of the Loans)
Each Amortization Date in 2003, 2004 and 2005	0.8333% (in Cdn.$ for the Cdn.$ Loans and in U.S.$ for the U.S.$ Loans)
Each Amortization Date in 2006 and 2007, and March 31, 2008	1.25% (in Cdn.$ for the Cdn.$ Loans and in U.S.$ for the U.S.$ Loans)
June 30, 2008 and September 30, 2008	3.3333% (in Cdn.$ for the Cdn.$ Loans and in U.S.$ for the U.S.$ Loans)
December 31, 2008	Balance Outstanding (in Cdn.$ or the U.S.$ Equivalent thereof)

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If a repayment required by this Section 2.4 would result in the repayment of an amount exceeding 25% of the aggregate original principal amount of the Loans (the “Tranche B Threshold Amount”) on or before the fifth anniversary of the Effective Date taking into account all mandatory prepayments made under Sections 2.2(d)(i) and 2.2(d)(ix) of the Intercreditor Agreement, then that repayment shall not be paid to the Lenders until the date which is five years and one day after the Effective Date, to the extent that such amount would cause the Tranche B Threshold Amount to be exceeded.

2.5     Evidence of Debt.

(a)	Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender hereunder, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b)	The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and, in the cases of B/A Loans and Eurodollar Loans, the relevant Contract Period or Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(c)	The entries made in the accounts maintained pursuant to Sections 2.5(a) and (b) shall be conclusive evidence (absent manifest error) of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. In the event of a conflict between the records maintained by the Administrative Agent and any Lender, the records maintained by the Administrative Agent shall govern.
(d)	Any Lender may request that Loans (other than B/A Loans) made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.4) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
(e)	If any Amortization Payment is required to be made on a day which is not a Business Day, such Amortization Payment shall be payable on the next Business Day.

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2.6     Prepayments of Loans; Payments Pursuant to Other New Instruments.

(a)

Excess Cash Flow Sweep; Asset Sales; Equity Securities. Section 2.2 of the Intercreditor Agreement provides for certain payments to be made if the Credit Parties generate Excess Cash Flow in any Fiscal Year, if a Credit Party receives Net Proceeds from an Asset Disposition, or if a Credit Party receives Net Proceeds from the issuance of Equity Securities. The Borrower shall comply with its obligations under the Intercreditor Agreement (including all payments, prepayments and offers of prepayment thereunder). Any payment received pursuant to Section 2.2 of the Intercreditor Agreement shall be applied, firstly, pro rata against the amounts payable on the next two Amortization Dates to occur after the date of such payment, and thereafter, pro rata against the amounts payable on the remaining Amortization Dates, and pro rata against the U.S.$ Loans and Cdn.$ Loans. The Borrower shall provide to the Administrative Agent written notice of such payment at least three Business Days prior to the date such payment is to be made. If any such notice is given, the amount specified in such notice shall be due and payable on the date required by Section 2.2 of the Intercreditor Agreement, together with any amounts payable pursuant to Section 2.10 (it being agreed that the full amount of any mandatory payment to be made in respect of a B/A Loan or a Eurodollar Loan will be deposited in a cash collateral account maintained by the Administrative Agent and will be applied by the Administrative Agent against the amount of such B/A Loan or Eurodollar Loan on the earlier of the maturity of the relevant B/A Loan, the relevant Eurodollar Loan, or upon the occurrence of an Event of Default, as applicable). Upon receipt of any notice given pursuant to this Section, the Administrative Agent shall promptly notify each affected party of the contents thereof and of such party’s Applicable Percentage of such payment. No prepayment of any Loan may be reborrowed.

(b)

Voluntary Prepayments. Subject to the subordination and standstill provisions of the Intercreditor Agreement, the Borrower may, at its option, at any time and from time to time, prepay the Loans, in whole or in part, upon giving three Business Days’ prior written notice to the Administrative Agent; provided, however, that the Borrower may not prepay any B/A Loans but may defease a B/A Loan in accordance with Section 2.7(e). Such notice shall specify the date and amount of prepayment and whether the prepayment is of Prime Rate Loans, Base Rate Loans, Eurodollar Loans or any combination thereof, and, in each case if a combination thereof, the principal amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s Applicable Percentage of such prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to Section 2.10 and accrued interest to such date on the amount prepaid in accordance with Section 2.3. Each voluntary prepayment of any Cdn.$ Loan shall be in a minimum principal amount of Cdn.$1,000,000 and in an integral multiple of Cdn.$100,000, and each voluntary prepayment of any U.S.$ Loan shall be in a

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	minimum principal amount of U.S.$1,000,000 and in an integral multiple of U.S.$100,000. Each voluntary prepayment of any Loan shall be permanent.
(c)	Notice by Borrower. Each notice provided by the Borrower hereunder in respect of any payment hereunder shall be irrevocable and shall specify the payment date and the principal amount of each Loan or portion thereof to be prepaid.
(d)	Notice by Administrative Agent. Upon receipt of a notice of payment pursuant to this Section 2.6, the Administrative Agent shall promptly notify each affected party of the contents thereof and of such party’s rateable share of such payment.

2.7     B/A Loans.

(a)	Subject to the terms and conditions of this Agreement, the Borrower may request a B/A Loan in accordance with Section 2.2.
(b)	No Contract Period with respect to a B/A Loan shall extend beyond the Maturity Date.
(c)	Subject to repayment requirements, on the last day of the relevant Contract Period for a B/A Loan, the Borrower shall be entitled to convert such B/A Loan into another Type of Loan, or to roll over such B/A Loan into another B/A Loan, all in accordance with the applicable provisions of this Agreement.
(d)	Except as required by any Lender upon the occurrence of an Event of Default, no B/A Loan may be repaid by the Borrower prior to the expiry date of the Contract Period applicable to such B/A Loan; provided, however, that the Borrower may defease any B/A Loan by depositing with the Administrative Agent an amount that is sufficient to repay such B/A Loan on the expiry date of the Contract Period applicable to such B/A Loan.

2.8     Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Loan:

(a)	the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or
(b)	the Administrative Agent is advised by the Required Lenders that the Eurodollar Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Eurodollar Loans for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Notice of Conversion/Continuation that requests the conversion of any Loan to, or continuation of any Loan as, a Eurodollar Loan shall be ineffective, and (ii) if any Notice of

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Conversion/Continuation requests a Eurodollar Loan, such Loan shall be made as a Base Rate Loan.

2.9     Increased Costs; Illegality.

(a) If any Change in Law shall:

(i)	impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or
(ii)	impose on any Lender or the London interbank market any other condition affecting this Agreement (including the imposition on any Lender of, or any change to, any Indemnified Tax or other charge with respect to its Eurodollar Loans or participation therein, or its obligation to make Eurodollar Loans);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan or to increase the cost to such Lender of participating in any Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)

If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and such Lender’s desired return on capital), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)

A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender as specified in Sections 2.9(a) or (b), together with a brief description of the Change of Law, shall be delivered to the Borrower, and shall be conclusive absent manifest error. In preparing any such certificate, a Lender shall be entitled to use averages and to make reasonable estimates, and shall not be required to “match contracts” or to isolate particular transactions. The Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

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(d)

Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.9 shall not constitute a waiver of such Lender’s right to demand such compensation.

(e)

In the event that any Lender shall have determined (which determination shall be reasonably exercised and shall, absent manifest error, be final, conclusive and binding upon all parties) at any time that the making or continuance of any Eurodollar Loan has become unlawful or materially restricted as a result of compliance by such Lender in good faith with any Change in Law, or by any applicable guideline or order (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), then, in any such event, such Lender shall give prompt notice (by telephone and confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to the other Lenders). Upon the giving of the notice to the Borrower referred to in this Section 2.9(e), the Borrower’s right to request (by continuation, conversion or otherwise), and such Lender’s obligation to make, Eurodollar Loans shall be immediately suspended, and thereafter any requested conversion into, or continuation of, Eurodollar Loans shall, as to such Lender only, be deemed to be a request for a Base Rate Loan, and if the affected Eurodollar Loan or Loans are then outstanding, the Borrower shall immediately, or if permitted by applicable Law, no later than the date permitted thereby, upon at least one Business Day prior written notice to the Administrative Agent and the affected Lender, convert each such Eurodollar Loan into a Base Rate Loan, provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.9(e).

2.10     Break Funding Payments. In the event of (a) the failure by the Borrower to convert, continue or prepay any Loan on the date specified in any notice delivered by the Borrower pursuant hereto, (b) the payment or conversion of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), or (c) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.14, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Eurodollar Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.10 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall

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pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

2.11     Taxes.

(a)	Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11), the Administrative Agent or relevant Lender (as the case may be) receives an amount equal to the sum it would have received had no such deduction been made, (ii) the Borrower shall make such deduction, and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.
(b)	In addition to the payments by the Borrower required by Section 2.11(a), the Borrower shall pay any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement to the relevant Governmental Authority in accordance with applicable Law.
(c)	The Borrower shall indemnify the Administrative Agent and each Lender, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d)	As soon as practicable after any payment of Indemnified Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)	In the event that the Borrower is required by applicable Law to deduct any Indemnified Taxes from any payment hereunder, any Foreign Lender that is entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such

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jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), if requested to do so by the Borrower, at the time or times prescribed by applicable Law, such properly completed and executed documentation prescribed by applicable Law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.

2.12     Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)	The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees, amounts payable under any of Sections 2.9, 2.10 or 2.11, or otherwise) prior to 12:00 noon, Toronto time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension, provided that, in the case of any payment with respect to a Eurodollar Loan, the date for payment shall be advanced to the next preceding Business Day if the next succeeding Business Day is in a subsequent calendar month. All payments under this Section 2.12 in respect of Eurodollar Loans and Base Rate Loans shall be made in U.S. Dollars. All other payments under this Section 2.12 shall be made in Canadian Dollars.
(b)	If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of any amounts payable to the Administrative Agent pursuant to Section 9.3, (ii) second, towards payment of interest and fees then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, towards payment of principal then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c)	Without limiting the provisions of the Intercreditor Agreement, if any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders rateably in

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	accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) this Section 2.12(c) shall not apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to any Credit Party (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)	Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the applicable default rate for Prime Rate Loans (if such amount is denominated in Canadian Dollars) or the applicable default rate for Base Rate Loans (if such amount is denominated in U.S. Dollars).
(e)	If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.12(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Section 2.12(d) until all such unsatisfied obligations are fully paid.

2.13     Currency Indemnity. If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement or any other Financing Document, it becomes necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or under any other Financing Document in any currency other than the Judgment Currency (the “Currency Due”), then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgment is given. For this purpose “rate of exchange” means the rate at which the Administrative Agent is able, on the relevant date, to purchase the Currency Due with the Judgment Currency in accordance with its normal practice at its head office in Toronto, Ontario. In the event that there is a change in the

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rate of exchange prevailing between the Business Day before the day on which the judgment is given and the date of receipt by the Administrative Agent of the amount due, the Borrower will, on the date of receipt by the Administrative Agent, pay such additional amounts, if any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount received by the Administrative Agent on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on the date of receipt by the Administrative Agent is the amount then due under this Agreement or such other Financing Document in the Currency Due. If the amount of the Currency Due which the Administrative Agent is so able to purchase is less than the amount of the Currency Due originally due to it, the Borrower shall indemnify and save the Administrative Agent and the Lenders harmless from and against all loss or damage arising as a result of such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Financing Documents, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Administrative Agent from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due under this Agreement or any other Financing Document or under any judgment or order.

2.14     Mitigation Obligations; Replacement of Lenders.

(a)

If any Lender requests compensation under Section 2.9, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, then such Lender shall use reasonable efforts to designate a different lending office for booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.9 or 2.11, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)

If any Lender requests compensation under Section 2.9, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from

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the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.9 or payments required to be made pursuant to Section 2.11, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if an Event of Default has occurred and is continuing or if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

2.15     Indemnity for Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Loans, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Loans or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender and the Borrower shall be liable to pay to the Administrative Agent and the Lenders, and hereby does indemnify the Administrative Agent and the Lenders and holds the Administrative Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.15 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Administrative Agent’s and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.15 shall survive the termination of this Agreement.

2.16     Existing Security. The Borrower and the Parent confirm that, in accordance with paragraph 27 of the Sanction Order, (a) the Liens granted pursuant to the Pre-Filing Credit Agreement (the “Existing Security”) shall remain in place and be reserved pending the execution, delivery and registration of the Security Documents pursuant to this Agreement and the delivery of all required consents to such Security Documents, and (b) no steps to perfect or reperfect (including registration or publication of any hypothecs) the Existing Security, other than any steps which are required generally under applicable provincial laws to maintain perfection of security interests (including registration or publication of any hypothecs), shall be required to secure the obligations of the Borrower and the Parent hereunder.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

Each of the Borrower and the Parent represents and warrants to the Administrative Agent and the Lenders that:

3.1     Organization; Powers. The Borrower and each other Credit Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its

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organization, has all requisite power and authority to carry on its business as now and formerly conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

3.2     Authorization; Enforceability. The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, shareholder action. This Agreement and the other Financing Documents have been duly executed and delivered by the Borrower and each other Credit Party (as applicable) and constitute legal, valid and binding obligations of the Borrower and each other Credit Party (as applicable), enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganisation, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.3     Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except those disclosed in Schedule B, (b) will not violate any applicable Law or the charter, by-laws or other organizational documents of the Borrower or any Credit Party or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any Credit Party or their respective assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Credit Party, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Credit Party, except for any Lien arising in favour of the Collateral Agent, for the benefit of the Lenders, under the Financing Documents.

3.4     Financial Condition; No Material Adverse Effect. All information (including the information contained in the Information Circular and all financial statements) pertaining to the Parent, its Subsidiaries and any Unrestricted Subsidiary (other than projections) that has been or will be made available to the Lenders or the Administrative Agent by the Parent or any representative of the Parent and its Subsidiaries, taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made. The projections that have been or will be made available to the Lenders or the Administrative Agent by the Parent or the Borrower or any representative of the Parent or the Borrower have been or will be prepared in good faith based upon assumptions that were reasonable when made.

3.5     Litigation.

(a) There are no actions, suits or proceedings (including any Tax-related matter) by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any other Credit Party (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected,

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individually or in the aggregate, to result in a Material Adverse Effect other than the matters disclosed in Schedule B, or (ii) that involve this Agreement, any other Financing Document, or the Transactions.

(b)

Except for the matters disclosed in Schedule B and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any other Credit Party (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability, or (iv) knows of any basis for any Environmental Liability.

3.6     Compliance with Laws and Agreements. Except as set forth in Schedule “B”, the Borrower and each other Credit Party is in compliance with all Laws applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Except as set forth in Schedule “B”, neither the Borrower nor any other Credit Party has violated or failed to obtain any Authorization necessary to the ownership of any of its property or assets or the conduct of its business, which violation or failure could reasonably be expected to have (in the event that such a violation or failure were asserted by any Person through appropriate action) a Material Adverse Effect.

3.7     Taxes. The Borrower and each other Credit Party has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it (including all instalments with respect to the current period) and has made adequate provisions for Taxes for the current period, except Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such other Credit Party, as applicable, has set aside on its books adequate reserves.

3.8     Titles to Real Property. Each Credit Party has indefeasible fee simple title to its respective owned real properties, and with respect to leased real properties, indefeasible title to the leasehold estate with respect thereto, pursuant to valid and enforceable leases, free and clear of all Liens except Permitted Liens. All real property owned by each Credit Party as at the Effective Date is described in Schedule B. All real property lease agreements pursuant to which any Credit Party leases any office space or switch room premises as at the Effective Date are described in Schedule B.

3.9     Titles to Personal Property. Each Credit Party has valid indefeasible title to all of its respective personal property, free and clear of all Liens except Permitted Liens.

3.10     Pension Plans. As of the Effective Date, no Credit Party has established or maintains a Pension Plan.

3.11     Disclosure. Each Credit Party has made available to the Lenders all agreements, instruments and corporate or other restrictions to which it is subject, and all other

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matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

3.12     Defaults. Except as set forth in Schedule “B”, no Credit Party is in default nor has any event or circumstance occurred which, but for the passage of time or the giving of notice, or both, would constitute a default (in either case in any respect that would have a Material Adverse Effect) under any loan or credit agreement, indenture, mortgage, deed of trust, security agreement or other instrument or agreement evidencing or pertaining to any Indebtedness of any Credit Party, or under any Material Contract.

3.13     Casualties; Taking of Properties. Since December 31, 2002, neither the business nor the properties of the Borrower or any other Credit Party have been affected in a manner that has had, or could reasonably be expected to have, a Material Adverse Effect as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by any domestic or foreign Governmental Authority, riot, activities of armed forces, or acts of God or of any public enemy.

3.14     Subsidiaries. As of the Effective Date, the Borrower has no subsidiaries other than those listed in Schedule B. As of the Effective Date, the Parent has no subsidiaries except the Borrower, the Pre-Filing Parent and the subsidiaries of the Parent listed in Schedule B.

3.15     Insurance. All policies of fire, liability, workers’ compensation, casualty, flood, business interruption and other forms of insurance owned or held by each of the Credit Parties are: sufficient for compliance with all requirements of applicable Law and of all Material Contracts; are valid, outstanding and enforceable policies; provide adequate insurance coverage in at least such amounts and against at least such risks (but including in any event public liability) as are usually insured against in the same general area by companies engaged in the same or a similar business for the assets and operations of each Credit Party; and will not in any way be affected by, or terminate or lapse by reason of, the Transactions. All such material policies are in full force and effect, all premiums with respect thereto have been paid in accordance with their respective terms, and no notice of cancellation or termination has been received with respect to any such policy. No Credit Party maintains any self-insurance program or deductible limits with respect to its assets or operations or material risks with respect thereto in excess of Cdn.$1,000,000 (or U.S.$1,000,000 in the case of directors and officers liability coverage). The certificate of insurance delivered to the Lenders pursuant to Section 4.1(i) contains an accurate and complete description of all material policies of insurance owned or held by each Credit Party on the Effective Date.

3.16     Material Contracts. Schedule B sets out each Material Contract in effect as at the Effective Date. A copy of each such Material Contract (each of which copies is true and complete except for provisions thereof which by the express terms thereof may only be disclosed to authorized representatives of the parties thereto) has been delivered to the Administrative Agent. Each Material Contract is in full force and effect. No Credit Party is in default under or in breach of any term or condition of any Material Contract that would have, either individually or in the aggregate, a Material Adverse Effect, nor is any Credit Party aware of any default under

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or breach of any term or condition of any Material Contract by any other party thereto that would have a Material Adverse Effect. No Material Contract contains any material provisions which impose burdensome or onerous obligations on any Credit Party which are inconsistent with prudent commercial activity by each Credit Party.

3.17     Environmental Matters. Except as disclosed to the Lenders in Schedule B:

(a)	Environmental Laws, etc. Neither any property of any Credit Party nor the operations conducted thereon violate any applicable order of any court or Governmental Authority or Environmental Laws, which violation could reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(b)	Notices, Permits, etc. All notices, permits, licenses or similar authorizations, if any, required to be obtained or filed by any Credit Party in connection with the operation or use of any and all property of any Credit Party, including but not limited to past or present treatment, transportation, storage, disposal or release of Hazardous Materials into the environment, have been duly obtained or filed, except to the extent the failure to obtain or file such notices, permits, licenses or similar authorizations could not reasonably be expected to have a Material Adverse Effect, or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(c)	Hazardous Substances Carriers. To the knowledge of each of the Credit Parties, all Hazardous Materials generated at any and all property of any Credit Party have been treated, transported, stored and disposed of only in accordance with Environmental Law applicable to them, except to the extent the failure to have such Hazardous Materials transported, treated or disposed by such carriers could not reasonably be expected to have a Material Adverse Effect, and only at treatment, storage and disposal facilities maintaining valid permits under applicable Environmental Law, which carriers and facilities have been and are operating in compliance with such permits, except to the extent the failure to have such Hazardous Materials treated, transported, stored or disposed at such facilities, or the failure of such carriers or facilities to so operate, could not reasonably be expected to have a Material Adverse Effect or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.
(d)	Hazardous Materials Disposal. Each Credit Party has taken all reasonable steps necessary to determine and has determined that no Hazardous Materials have

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been disposed of or otherwise released and there has been no threatened release of any Hazardous Materials on or to any property of any Credit Party other than in compliance with Environmental Laws, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect or which could not reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to the relevant property.

(e)

No Contingent Liability. The Credit Parties have no material contingent liability in connection with any release or threatened release of any Hazardous Materials into the environment other than such contingent liabilities at any one time and from time to time which could not reasonably be expected to exceed the applicable insurance coverage and for which adequate reserves for the payment thereof as required by GAAP have been provided, or which could reasonably be expected to result in remedial obligations having a Material Adverse Effect, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such release or threatened release.

The representations and warranties in this Section 3.17 do not extend to transmitter sites or other real property in which any Credit Party has a leasehold interest, except to the extent that anything referred to in this Section 3.17 results from the act or omission of a Credit Party.

3.18     Employee Matters. As at the Effective Date, no Credit Party, nor any of their respective employees, is subject to any collective bargaining agreement. There are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of the Borrower, threatened against any Credit Party, or their respective employees, which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. As at the Effective Date, except as set forth in Schedule B, no Credit Party is subject to an employment contract providing for a fixed term of employment exceeding one year or providing for special payments on termination of employment exceeding one year’s salary.

3.19     Fiscal Year. The Fiscal Year of the Borrower ends on December 31 of each calendar year, and the Borrower’s Fiscal Quarters end on the last day of each of March, June, September and December of each calendar year.

3.20     Intellectual Property Rights. Each Credit Party is the registered and beneficial owner of, with good and marketable title, free of all licences, franchises and Liens other than Permitted Liens, to, or, alternatively, is a permitted licencee of, all patents, patent applications, trade marks, trade mark applications, trade names, service marks, copyrights, industrial designs, or other rights with respect to the foregoing and other similar property, used in or necessary for the present and planned future conduct of its business, without any conflict with the rights of any other Person other than as listed on Schedule B or other than for such conflicts as would not reasonably be expected to have a Material Adverse Effect. All material patents, trade marks, trade names, service marks, copyrights, industrial designs and other similar rights owned or licenced by any Credit Party, and all rights of any Credit Party to the use of any

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patents, trade marks, trade names, service marks, copyrights, industrial designs or other similar rights, are described in Schedule B (it being agreed that Schedule B excludes all such agreements which, if terminated, could be promptly replaced on comparable terms). Except as set forth in Schedule B, no material claim has been asserted and is pending by any Person with respect to the use by any Credit Party of any intellectual property or challenging or questioning the validity, enforceability or effectiveness of any intellectual property necessary for the conduct of the business of any Credit Party. Except as disclosed in Schedule B or except as would not reasonably be expected to have a Material Adverse Effect, (i) each Credit Party has the exclusive right to use the intellectual property which each Credit Party owns, and (ii) all applications and registrations for such intellectual property are current.

3.21     Investment and Holding Company Status. No Credit Party is (a) an “investment company” subject to regulation under the United States Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the United States Public Utility Holding Company Act of 1935. No Credit Party is subject to the United States Employee Retirement Income Security Act of 1974, as amended from time to time. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying “margin stock”.

3.22     PCS Network Ownership. The Borrower owns or leases all material assets (and is the holder of all Radiocom Licences) necessary in connection with the operation of the PCS Network.

3.23     No Indebtedness for Borrowed Money. As at the Effective Date, no Credit Party has incurred any Indebtedness for borrowed money except Indebtedness in favour of the Lenders as expressly provided for in this Agreement and Indebtedness for borrowed money listed in Schedule B.

3.24     Permits, Licences, etc. Each Credit Party possesses all Authorizations as may be necessary to properly conduct the Business and operate the Borrower’s PCS Network. All of the material Authorizations as at the Effective Date are set forth in Schedule B, are all in full force and effect, and each Credit Party is in compliance therewith. All franchise, licence or other fees and charges which have become due pursuant to any material Authorization have been paid by the relevant Credit Party, and each Credit Party has made appropriate provisions as is required by GAAP for any such fees and charges which have accrued. The Radiocom Licences are valid and in full force and effect without conditions except for the conditions contained in or referred to in the Radiocom Licences. No event has occurred and is continuing which could reasonably be expected to (i) result in the revocation, termination or adverse modification of any Radiocom Licence or other material Authorization other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business, or (ii) materially and adversely affect any right of any Credit Party under any Radiocom Licence or other material Authorization other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business. No Credit Party has any reason to believe or has any knowledge that the Radiocom Licences will not be renewed in the ordinary course, other than at the request of the Parent or the Borrower and in respect of Radiocom Licences which are not material to the Business.

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3.25     Security Interests. Each of the Security Documents creates (or continues the creation, as the case may be), as security for the obligations purported to be secured thereby, subject to the provisions hereof and thereof, a legal, valid and enforceable hypothec and/or security interest in all the Collateral subject to such Security Document and each such Security Document shall constitute, to the fullest extent possible under applicable law and upon completion of all required filings or actions, either (a) a fully published and/or perfected Lien on, and security interest in, all of the Collateral subject to such Security Document or (b) a floating charge, fixed charge, hypothecation or security interest, as specified in the applicable Security Document, with respect to all of the Collateral subject to such Security Document, in each case in favour of the Collateral Agent or the “fondé de pouvoir” (person holding an irrevocable power of attorney) appointed for the benefit of the Lenders, and subject to no other Liens except Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2. The grantor, pledgor or assignor, as the case may be, under each Security Document has good title to all Collateral subject thereto free and clear of all Liens other than Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2.

3.26     Regulatory Compliance. The Parent, the Borrower and each other Credit Party are in compliance with the Telecommunications Act (Canada) except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Parent and the Borrower, there is no investigation, notice of apparent liability, violation, forfeiture or other order or complaint issued by or before the CRTC or Industry Canada, or of any other proceedings of or before the CRTC or Industry Canada, affecting any Credit Party which could reasonably be expected to have a Material Adverse Effect except for the fee revision announced by Industry Canada in March, 2001 with respect to PCS license fees (which fee revision is disclosed in the Information Circular under the heading “PCS License Conditions and Fees”). No event has occurred which (i) results in or reasonably could be expected to result in, or after notice or lapse of time or both would result in or reasonably could be expected to result in, revocation, suspension, adverse modifications, non-renewal, impairment, restriction or termination of, or order of forfeiture with respect to, any license in any respect which could reasonably be expected to have a Material Adverse Effect or (ii) affects or could reasonably be expected in the future to affect any of the rights of any Credit Party under any license in any respect which could reasonably be expected to have a Material Adverse Effect. The Parent, the Borrower and each other Credit Party have duly filed in a timely manner all material filings, reports, applications, documents, instruments and information required to be filed by it under the Telecommunications Act (Canada), and all such filings were when made true, correct and complete in all respects except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

3.27     Budget Update. The updated budget provided by the Parent to the Administrative Agent on March 12, 2003 has been reviewed and approved by the board of directors of the Parent and, as of the Effective Date, continues to represent the Parent’s good faith estimate with respect to the matters contemplated therein.

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ARTICLE 4
CONDITIONS

4.1     Conditions Precedent to Effectiveness of Agreement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2):

(a)	Credit Agreement. The Administrative Agent (or its counsel) shall have received from each of the Parent and the Borrower a counterpart of this Agreement signed on behalf of each of the Parent and the Borrower and the Administrative Agent shall have delivered to the Borrower (or its counsel) a counterpart of this Agreement signed on behalf of the Administrative Agent and the Lenders.
(b)	Representations and Warranties. All representations and warranties made hereunder and in the other Financing Documents shall be true and correct as if made on the Effective Date.
(c)	No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing after giving effect to the Loans to be outstanding on the Effective Date.
(d)	Due Authorization. The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Credit Party, the authorization of the Transactions and any other legal matters relating to the Credit Parties, the Financing Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(e)	Fees. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) incurred in connection with any of the Financing Documents and the Transactions, including perfecting Liens on any Collateral.
(f)	Legal Opinion. The Administrative Agent shall have received a favourable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Stikeman Elliott LLP, Canadian counsel to the Borrower and the Parent covering such matters relating to the Credit Parties, this Agreement or the Transactions as the Lenders shall reasonably request, and opinions of such other special and local counsel as may be required by the Administrative Agent and its counsel.
(g)	Satisfaction of Collateral and Guarantee Requirements. The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Effective Date

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	and signed by a Responsible Officer of the Parent and its general counsel, together with all attachments contemplated thereby. All financing statements, instruments and other documents required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded, and all approvals and consents of Governmental Authorities required to be obtained, in each case in order to continue the publication, perfection of or to create, publish and perfect, as the case may be, the Liens intended to be created by the Security Documents with respect to the Collateral of the Credit Parties shall have been filed, registered, or recorded or obtained, as the case may be.
(h)	Books and Records. The Administrative Agent shall have had an opportunity, if it so chooses, to examine the books of account and other records and files of any Credit Party and to make copies thereof, and the results of such examination shall have been satisfactory to the Administrative Agent in all respects.
(i)	Insurance. The Administrative Agent shall have received evidence satisfactory to the Administrative Agent that the insurance required by Section 5.10 and each of the Security Documents are in effect.
(j)	Liquidity and Subscriber Numbers. The consolidated cash and cash equivalents of the Parent shall be not less than Cdn.$75,000,000 and the aggregate number of Subscribers shall be not less than 1,000,000.
(k)	Consents and Approvals. All consents and approvals required to be obtained from any Governmental Authority or other Person in connection with the Transactions (including interim approval or its equivalent by Industry Canada with respect to the MCS licenses held by Inukshuk) shall have been obtained, and all applicable waiting periods and appeal periods shall have expired, in each case without the imposition of any burdensome conditions.
(l)	Satisfaction of Administrative Agent. All proceedings taken in connection with the execution of this Agreement, all other Financing Documents and all documents and papers relating thereto shall be satisfactory in form, scope, and substance to the Administrative Agent.
(m)	Indebtedness. After giving effect to the Transactions, no Credit Party shall have outstanding any shares of preferred stock or any Indebtedness, other than (i) the obligations created hereunder and (ii) the Indebtedness and preferred stock described in Schedule B.
(n)	Occurrence of Effective Date under Plan of Arrangement. The “Effective Date” (as defined under the Plan of Arrangement) shall have occurred or shall occur contemporaneously with the effectiveness of this Agreement.
(o)	Sanction Order. The Sanction Order shall not have been stayed by any court having jurisdiction to issue any such stay, and the time to appeal the Sanction Order or to seek review, rehearing or certiorari with respect to the Sanction Order

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	must have expired; no appeal or petition for review, rehearing or certiorari with respect to the Sanction Order may be pending, and the Sanction Order must otherwise be in full force and effect; and the corporate transactions contemplated by Section 3 of the Plan of Arrangement shall have been completed pursuant to documentation satisfactory (in form and substance) to the Administrative Agent.
(p)	Plan of Arrangement Not Amended, etc. The Plan of Arrangement shall not have been amended, supplemented, restated or otherwise modified in any manner not approved by the Administrative Agent.
(q)	Initial Credit Rating. The Loans shall have been given an initial “private letter” preliminary credit rating of “CCC+” by Standard & Poor’s Corporation.
(r)	Security Documents. The Collateral Agent (or, with respect to (i), the Administrative Agent) shall have received:

(i)		a guarantee executed by each Credit Party other than the Borrower in favour of the Administrative Agent, as agent for the Lenders, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent;
(ii)		a general security agreement executed by each Credit Party in favour of the Collateral Agent, as agent for the Lenders and the Administrative Agent, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all property from time to time of each Credit Party, subject only to Permitted Liens;
(iii)		a hypothec executed by each Credit Party in favour of the Collateral Agent, in its capacity as “fondé de pouvoir” for the Lenders appointed pursuant to Section 8.11 hereof (together with a bond issued pursuant to such hypothec and a pledge agreement pledging such bond), each dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority hypothecation of all property from time to time of each Credit Party, subject only to Permitted Liens;
(iv)		mortgages executed by each Credit Party in favour of the Collateral Agent, in its capacity as agent for the Lenders and the Administrative Agent appointed pursuant to Section 8.11 hereof, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all real property from time to time of such Credit Party, subject only to Permitted Liens;
	provided that if any of the foregoing documents are not suitable for use in any jurisdiction, the applicable Credit Party shall provide to the Collateral Agent (or the Administrative Agent with respect to (i) above) alternative

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document(s) with substantially equivalent substantive effect and which are suitable for use in such jurisdiction.

(s)	Execution of Financing Documents. The other Financing Documents and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, together with any and all other documents and instruments as may have been reasonably requested by the Administrative Agent.
(t)	Execution and Delivery of Documentation. Without limiting the generality of the items described above, each of the Credit Parties shall have delivered or caused to be delivered to the Administrative Agent (in form and substance reasonably satisfactory to the Administrative Agent), the financial statements, instruments, resolutions, documents, agreements, mortgages, title reports, certificates, opinions and other items as may have been requested by the Administrative Agent.
(u)	Other Financing. The Tranche A Exit Facility Agreement and the Tranche C Credit Agreement shall have been executed and delivered by the parties thereto and all conditions thereunder shall have been satisfied or waived.

ARTICLE 5
AFFIRMATIVE COVENANTS

          The Borrower and the Parent jointly and severally covenant and agree with the Lenders that from (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full:

5.1     Financial Statements and Other Information. The Parent or the Borrower (as applicable) will furnish to the Administrative Agent with copies for each Lender:

(i)

within 120 days after the end of each Fiscal Year of the Parent, the Parent’s audited consolidated and unconsolidated balance sheets and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Parent and its consolidated subsidiaries on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;

(ii)

within 120 days after the end of each Fiscal Year of the Borrower, the Borrower’s audited consolidated and unconsolidated balance sheet and

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	related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries, if any, on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;
(iii)	within 120 days after the end of each Fiscal Year of each Unrestricted Subsidiary and each Credit Party other than the Parent and the Borrower, each such Unrestricted Subsidiary’s or Credit Party’s audited unconsolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of such Unrestricted Subsidiary or Credit Party, as applicable, on an unconsolidated basis in accordance with GAAP consistently applied;
(iv)	if requested by the Administrative Agent, within 120 days after the end of each Fiscal Year of the Parent, the Credit Parties’ audited combined and consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such combined and consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Credit Parties on a combined and consolidated basis in accordance with GAAP consistently applied;
(v)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Parent, the Parent’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form

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	(a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer of the Parent as presenting fairly in all material respects the financial condition and results of operations of the Parent and its subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of notes and normal year-end audit adjustments;
(vi)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, the Borrower’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form (a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its subsidiaries, if any, on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(vii)	within 60 days after the end of each Fiscal Quarter of each Fiscal Year of the Parent, the Credit Parties’ unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form (a) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and (b) the actual figures for year-to-date versus the budgeted figures set out in the annual budget delivered pursuant to Section 5.1(xvi), all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Credit Parties on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(viii)	concurrently with the financial statements required pursuant to Sections 5.1(i), (ii), (iii), (iv), (v), (vi), and (vii) above, a certificate, signed by a Financial Officer, (a) stating that a review of such financial statements during the period covered thereby and of the activities of each Credit Party has been made under such Financial Officer’s

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	supervision with a view to determining whether each Credit Party has fulfilled all of its obligations under this Agreement and the other Financing Documents; (b) stating that each Credit Party has fulfilled its obligations under this Agreement and the other Financing Documents and that all representations made in this Agreement continue to be true and correct as if made on the date of such certification (or specifying the nature of any change), except where such representation or warranty refers to a different date, or, if there shall be a Default or Event of Default, specifying the nature and status thereof and the relevant Credit Party’s proposed response thereto; (c) demonstrating in reasonable detail compliance (including showing all material calculations) as at the end of the most recently completed Fiscal Year or the most recently completed Fiscal Quarter with the financial covenants in Section 5.14 and including a description by category (utilizing the same categories as are used by the Borrower in internal financial reports) of any permitted dispositions and acquisitions and any Capital Expenditures made by the Borrower or any other Credit Party as of the end of the most recently-completed Fiscal Year, and (d) containing or accompanied by such financial or other details, information and material as the Administrative Agent may reasonably request to evidence such compliance;
(ix)	copies of each management letter issued to each Credit Party by such accountants promptly following consideration or review thereof by the board of directors of each Credit Party, or any committee thereof (together with any response thereto prepared by any Credit Party);
(x)	promptly after the same become publicly available, copies of all periodic reports, proxy statements and other similar materials filed by any Credit Party with any securities commission, stock exchange or similar entity, and all materials distributed out of the ordinary course by the Parent to its shareholders and which relate to matters in which any Lender or the Administrative Agent, in such capacities, can reasonably be expected to have an interest;
(xi)	within a reasonable time after a request by the Administrative Agent, additional title information in form and substance acceptable to the Administrative Agent as is reasonably necessary covering the Collateral so that the Lenders shall have received, together with the title information previously received by the Lenders, satisfactory title information covering all of the Collateral;
(xii)	promptly after the Parent or the Borrower learns of the receipt or occurrence of any of the following, a certificate signed by a Responsible Officer, specifying (a) any official notice of any violation, possible violation, non-compliance or possible non-compliance, or claim made by any Governmental Authority pertaining to all or any part

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	of the properties of any Credit Party which could reasonably be expected to have a Material Adverse Effect; (b) any event which constitutes a Default or Event of Default, together with a detailed statement specifying the nature thereof and the steps being taken to cure such Default or Event of Default; (c) the creation, dissolution, merger or acquisition of any Subsidiary; (d) any event or condition not previously disclosed to the Administrative Agent, which violates any Environmental Law and which may reasonably be expected to have a Material Adverse Effect; (e) any material amendment to, revocation or termination prior to scheduled expiry of, or material default under, a Material Contract or any execution of, or material amendment to, termination prior to scheduled expiry or revocation of, or material default under, any material collective bargaining agreement; and (f) any event, development or condition which may reasonably be expected to have a Material Adverse Effect;
(xiii)	promptly after the occurrence thereof, notice of the institution of or any material adverse development in any action, suit or proceeding or any governmental investigation or any arbitration, before any court or arbitrator or any governmental or administrative body, agency or official against any Credit Party or any material property of any Credit Party which could reasonably be expected to have a Material Adverse Effect;
(xiv)	promptly after the filing thereof with any Governmental Authority (if requested by the Administrative Agent), copies of each annual and other report (including applicable schedules) with respect to each Pension Plan, if any, of any Credit Party or any trust created thereunder;
(xv)	upon request by the Administrative Agent, a summary of the insurance coverages of each Credit Party in form and substance reasonably satisfactory to the Administrative Agent; upon renewal of any insurance policy, a copy of an insurance certificate summarizing the terms of such policy; and upon request by the Administrative Agent, copies of the applicable policies;
(xvi)	on or before the 60th day after the end of each Fiscal Year, an annual budget of the Parent, reviewed by the board of directors of the Parent, setting forth in reasonable detail the consolidated projected revenues and expenses of the Parent for the following Fiscal Year, it being recognized by the Lenders that projections as to future results are not to be viewed as fact and that the actual results for the period or periods covered by such projections may differ from the projected results;
(xvii)	on or before the 90th day after the end of each Fiscal Year ending on or after December 31, 2003, the Borrower’s calculation of Excess Cash

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	Flow for the Fiscal Year then ended in accordance with the Intercreditor Agreement;
(xviii)	promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of each Credit Party and each Unrestricted Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent may reasonably request;
(xix)	within 60 days after the end of each Fiscal Quarter, a certificate of a Financial Officer of the Borrower, certifying as to (a) total number of Subscribers of the Borrower as at the end of such Fiscal Quarter and net additional Subscribers during such Fiscal Quarter, and (b) the Subscriber churn ratios of the Borrower in respect of such Fiscal Quarter;
(xx)	written notice promptly, and in any event within five Business Days, after any Credit Party becomes aware of the initiation of any proceeding by any Governmental Authority having jurisdiction over any Credit Party which could result in the expiration without renewal, termination, revocation, suspension, modification or impairment of any Radiocom Licence or other Authorization where the same could reasonably be expected to cause a Material Adverse Effect;
(xxi)	written notice promptly, and in any event within five Business Days, after any Credit Party becomes aware of any proceeding or Law affecting the operation of the Business, the Radiocom Licences or any other Authorization which has been enacted or adopted or which will shortly be enacted or adopted and which could reasonably be expected to materially adversely affect the Business or any Credit Party;
(xxii)	within 30 days after the end of each month, a report setting out or providing, as the case may be, with respect to each switch-site for which a landlord consent pursuant to Section 5.16 has not already been obtained (a) whether the landlord/licensor has executed a consent and acknowledgement relating to the charge by the Borrower of its leasehold interest in the relevant switch site premises in favour of the Collateral Agent, and (b) the originals of all such consents and acknowledgements received during the month;
(xxiii)	prompt written notice of any Swap Agreement entered into by the Borrower or any other Credit Party or any amendment or termination thereof, together with all details relating thereto reasonably requested by the Administrative Agent (including, without limitation, its effective date, notional amount, currency, applicable rate, amortization and maturity date and such other information as may be reasonably requested by the Administrative Agent to verify on a continuing basis

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	the mark-to-market exposure of the Credit Parties under all Swap Agreements);
(xxiv)	prompt written notice of any collective bargaining agreement to which any Credit Party becomes a party;
(xxv)	all environmental site assessments or other environment-related materials in the possession of any Credit Party relating to properties owned or leased by a Credit Party which have not been previously provided to the Administrative Agent;
(xxvi)	prompt written notice of any change in the name of any Credit Party and of any change in the location of the chief executive office of any Credit Party and of any change in any other information on Schedule B necessary to ensure the accuracy at all times of the representations and warranties set out in Section 3.20;
(xxvii)	promptly after the Parent or the Borrower learns of the occurrence thereof, written notice of any material default under any lease (including any sublease) relating to a switch site used in the Business, including any payment default thereunder; and
(xxviii)	prompt written notice of any material event with respect to any Unrestricted Subsidiary, including any Investment by any Person in an Unrestricted Subsidiary.

5.2     Existence; Conduct of Business. Each Credit Party will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence (subject only to Section 6.3), and except to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect, obtain, preserve, renew and keep in full force and effect any and all rights, licenses, permits, privileges and franchises material to the conduct of its business.

5.3     Payment of Obligations. Each Credit Party will pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Credit Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

5.4     Maintenance of Properties. Each Credit Party will keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

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5.5     Maintenance of Authorizations. Each Credit Party will maintain and keep in full force and effect all Authorizations necessary to operate the PCS Network and otherwise carry on the Business.

5.6     Books and Records; Inspection Rights. Each Credit Party will keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Credit Party will maintain its billing, accounting and software systems at a level sufficient to enable it to conduct the Business. Each Credit Party will permit any representatives designated by the Administrative Agent, upon reasonable prior notice and during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (it being agreed that the aforementioned notice requirements and normal business hour restrictions shall not be applicable after the occurrence and continuation of a Default or an Event of Default, and after a Default or an Event of Default an individual Lender may designate its own representative to perform any such tasks); provided that, prior to a Default or an Event of Default, (i) any representative of a Lender who is not an employee of that Lender has established to the reasonable satisfaction of the Borrower and the Lenders that there is no inherent conflict of interest between the business and clientele of the Credit Parties and the business and clientele (other than the Lenders) of that representative, and (ii) the Lenders and their representatives shall not be entitled to take copies of (but may nevertheless examine) any portion of the books, accounts and records of the Credit Parties if allowing such copies to be taken would result in any Credit Party being in breach of any contractual or other legally binding obligation of confidentiality. All information provided or obtained pursuant to this Section 5.6 is subject to Section 9.12.

5.7     Compliance with Laws and Material Contracts. Each Credit Party will comply with all Laws and orders of any Governmental Authority applicable to it or its property (including the Sanction Order) and with all of its material contractual obligations, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

5.8     Intentionally Deleted.

5.9     Further Assurances. The Borrower will, and will cause each other Credit Party to, cure promptly any defects in the execution and delivery of the Financing Documents, including this Agreement. Upon request, the Borrower will, at its expense, as promptly as practical, execute and deliver to the Administrative Agent, all such other and further documents, agreements and instruments (and cause each other Credit Party to take such action) in compliance with or performance of the covenants and agreements of the Borrower or any other Credit Party in any of the Financing Documents, including this Agreement, or to further evidence and more fully describe the Collateral, or to correct any omissions in any of the Financing Documents, or more fully to state the security obligations set out herein or in any of the Financing Documents, or to publish, perfect, protect or preserve any Liens created pursuant to any of the Financing Documents, or to make any recordings, to file any notices, or obtain any consents, all as may be necessary or appropriate in connection therewith.

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5.10     Insurance. The Borrower will, and will cause each other Credit Party to, maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to their respective properties and business against such liabilities, casualties, risks and contingencies and in such types (including business interruption insurance and flood insurance) and amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated and in accordance with any requirement of any Governmental Authority. In the case of any fire, accident or other casualty causing loss or damage to any properties of the Borrower used in generating cash flow or required by applicable Law, all proceeds of such policies shall be used promptly to repair or replace any such damaged properties, and otherwise shall be used as directed by the Administrative Agent (i) to repair or replace the damaged property, or (ii) to prepay the Loans or to make other payments in accordance with Section 2.6(b). The Borrower will obtain endorsements to the policies pertaining to all physical properties in which the Collateral Agent or the Lenders shall have a Lien under the Financing Documents, naming the Collateral Agent as a loss payee, and containing provisions that such policies will not be cancelled without 15 days prior written notice having been given by the insurance company to the Administrative Agent.

5.11     Operation and Maintenance of Property. The Parent will, and will cause each other Credit Party to, manage and operate its business or cause its business to be managed and operated (i) in accordance with prudent industry practice in all material respects and in compliance in all material respects with the terms and provisions of all applicable licenses, leases, contracts and agreements, and (ii) in compliance with all applicable laws of the jurisdiction in which such businesses are carried on, and all applicable Laws of every other Governmental Authority from time to time constituted to regulate the ownership, management and operation of such businesses, except where a failure to so manage and operate could not reasonably be expected to have a Material Adverse Effect.

5.12     Additional Subsidiaries; Additional Liens. If any additional subsidiary is formed or acquired after the Effective Date (each such subsidiary, an “Additional Subsidiary”), the Parent and the Borrower will, within three Business Days after such subsidiary is formed or acquired, notify the Administrative Agent thereof and promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such subsidiary and with respect to any Equity Securities in or Indebtedness of such subsidiary owned by or on behalf of any Credit Party; provided that (i) any action otherwise necessary to satisfy the Collateral and Guarantee Requirement that is prohibited by applicable Law and not legally capable of being taken without the appropriate consents of Governmental Authorities need not be taken and (ii) in the event any consent or approval of a Governmental Authority necessary to satisfy the Collateral and Guarantee Requirement cannot reasonably be obtained within 90 days after such Additional Subsidiary is acquired or formed, the Parent and the Borrower shall, so long as they exercise commercially reasonable efforts to obtain such consent or approval from the time such Additional Subsidiary is acquired or formed, have an additional period of time, not to exceed 30 days after such acquisition or formation, to obtain such consent or approval.

5.13     Hedging Arrangements. The Borrower may, at its discretion, enter into Swap Agreements with the Tranche A Lenders to manage currency exposure assumed pursuant to the U.S.$ Loans and not for the purpose of speculation (the “U.S.$ Hedges”). Any obligations

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of the Borrower under any U.S.$ Hedges may be secured by the security instruments created in favour of the Tranche A Lenders, pari passu with the other obligations of the Borrower under the Tranche A Credit Agreement, which security instruments rank in priority to the Security Instruments created pursuant to this Agreement.

5.14     Financial Covenants. The Credit Parties will comply with the financial covenants listed in subsections (a) to (e) below. All such financial covenants shall be calculated on a consolidated basis, except that such calculations shall not include amounts in respect of Unrestricted Subsidiaries.

(a) Minimum EBITDA. The Credit Parties will ensure that minimum EBITDA for the Parent for the Rolling Period ending on each Quarterly Date set forth below is not less than the amount for such Rolling Period set out in the following table:

Quarterly Date	Minimum EBITDA (Cdn.$)
June 30, 2003		80,000,000
September 30, 2003		75,000,000
December 31, 2003		55,000,000
March 31, 2004		55,000,000
June 30, 2004		60,000,000
September 30, 2004		80,000,000
December 31, 2004		105,000,000
March 31, 2005		130,000,000
June 30, 2005		140,000,000
September 30, 2005		145,000,000
December 31, 2005		155,000,000
March 31, 2006		165,000,000
June 30, 2006		175,000,000
September 30, 2006		195,000,000
December 31, 2006		205,000,000
March 31, 2007		215,000,000
June 30, 2007		220,000,000
September 30, 2007		220,000,000
December 31, 2007		220,000,000
March 31, 2008		220,000,000
June 30, 2008		220,000,000
September 30, 2008		220,000,000
December 31, 2008		220,000,000

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(b) Minimum Number of Subscribers. The Credit Parties will ensure that the aggregate number of Subscribers on any date shall not be less than the number for such date set out in the following table:

	Number of
Date	Subscribers
On any date from June 30, 2003 to September 29, 2003		950,000
On any date from September 30, 2003 to December 30, 2003		950,000
On any date from December 31, 2003 to March 30, 2004		950,000
On any date from March 31, 2004 to June 29, 2004		1,050,000
On any date from June 30, 2004 to September 29, 2004		1,150,000
On any date from September 30, 2004 to December 30, 2004		1,150,000
On any date from December 31, 2004 to March 30, 2005		1,250,000
On any date from March 31, 2005 to June 29, 2005		1,300,000
On any date from June 30, 2005 to September 29, 2005		1,350,000
On any date from September 30, 2005 to December 30, 2005		1,400,000
On any date from December 31, 2005 to March 30, 2006		1,450,000
On any date from March 31, 2006 to June 29, 2006		1,450,000
On any date from June 30, 2006 to September 29, 2006		1,450,000
On any date from September 30, 2006 to December 30, 2006		1,450,000
On any date from December 31, 2006 to March 30, 2007		1,450,000
On any date from March 31, 2007 to June 29, 2007		1,450,000
On any date from June 30, 2007 to September 29, 2007		1,450,000
On any date from September 30, 2007 to December 30, 2007		1,450,000
On any date from December 31, 2007 to March 30, 2008		1,450,000
On any date from March 31, 2008 to June 29, 2008		1,450,000
On any date from June 30, 2008 to September 29, 2008		1,450,000
On any date from September 30, 2008 to December 30, 2008		1,450,000
On December 31, 2008		1,450,000

(c) Minimum ARPU. The Credit Parties will ensure that minimum ARPU for the Fiscal Quarter ending on each date set forth below is not less than the amount for such Fiscal Quarter set out in the following table:

Fiscal Quarter Ending	Minimum ARPU (Cdn.$)
June 30, 2003		32.00
September 30, 2003		32.00

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Fiscal Quarter Ending	Minimum ARPU (Cdn.$)
December 31, 2003		32.00
March 31, 2004		32.00
June 30, 2004		33.00
September 30, 2004		33.00
December 31, 2004		33.00
March 31, 2005		34.00
June 30, 2005		34.00
September 30, 2005		34.00
December 31, 2005		34.00
March 31, 2006		34.00
June 30, 2006		34.00
September 30, 2006		34.00
December 31, 2006		34.00
March 31, 2007		34.00
June 30, 2007		34.00
September 30, 2007		34.00
December 31, 2007		34.00
March 31, 2008		34.00
June 30, 2008		34.00
September 30, 2008		34.00
December 31, 2008		34.00

(d) Minimum Liquidity. The Credit Parties will ensure that, at all times, the consolidated cash and Permitted Investments of the Credit Parties, when aggregated with the available unused portion of the “Commitments” under the Tranche A Exit Facility, will be not less than the aggregate of (i) the amount set forth in the table below (as applicable for such time), plus (ii) an amount equal to 50% of the principal amount of the “Commitments” under the Tranche A Exit Facility, less (iii) an amount equal to the cumulative amount of Excess Cash Flow paid to the Collateral Agent pursuant to Section 2.2 of the Intercreditor Agreement since the Effective Date. Any cash or Permitted Investments of any Credit Party which is subject to any Lien, other than a Permitted Lien, in favour of any Person other than the Collateral Agent, the Administrative Agent, any trustee or “fondé de pouvoir” on behalf of the Collateral Agent, the Administrative Agent, the Issuing Bank under the Tranche A Exit Facility Agreement or any Lender, shall not be included in the consolidated cash and Permitted Investments of the Credit Parties for the purpose of determining compliance with this Section 5.14(d).

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Fiscal Quarter Ending
on Quarterly Date below	Minimum Amount (Cdn.$)
June 30, 2003		50,000,000
September 30, 2003		50,000,000
December 31, 2003		50,000,000
March 31, 2004		10,000,000
June 30, 2004		10,000,000
September 30, 2004		20,000,000
December 31, 2004		20,000,000
March 31, 2005		(-5,000,000	)
June 30, 2005		0
September 30, 2005		20,000,000
December 31, 2005		25,000,000
March 31, 2006		30,000,000
June 30, 2006		45,000,000
September 30, 2006		100,000,000
December 31, 2006		130,000,000
March 31, 2007		130,000,000
June 30, 2007		150,000,000
September 30, 2007		150,000,000
December 31, 2007		150,000,000
March 31, 2008		150,000,000
June 30, 2008		150,000,000
September 30, 2008		150,000,000
December 31, 2008		150,000,000

(e) Maximum Capital Expenditures. The Credit Parties will ensure that the cumulative aggregate amount of Capital Expenditures incurred by the Credit Parties from the Effective Date until each Fiscal Year end date set forth in the following table shall not exceed the cumulative aggregate amounts set forth for the applicable date in the following table; provided, however, that if the aggregate number of Subscribers as at any such Fiscal Year end date is less than the “Target Subscriber Number” for such date as set forth in the following table, then the permitted aggregate amount of Capital Expenditures which may be incurred by the Credit Parties from the Effective Date until the next Fiscal Year end date shall be reduced to an amount determined by multiplying the cumulative aggregate maximum amount of permitted Capital Expenditures set forth in such table by a fraction, the numerator of which is the actual number of Subscribers on such

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Fiscal Year end date and the denominator of which is the “Target Subscriber Number” for such Fiscal Year end date as set forth in the following table:

			Cumulative
			Aggregate
	Target		Amount of
	Subscriber		Capital
Date	Number		Expenditures
Effective Date to December 31, 2003		1,268,749		100,000,000
Effective Date to December 31, 2004		1,480,503		250,000,000
Effective Date to December 31, 2005		1,704,166		420,000,000
Effective Date to December 31, 2006		1,919,790		540,000,000
Effective Date to December 31, 2007		2,103,761		660,000,000
Effective Date to December 31, 2008		2,259,751		780,000,000

5.15     Most Favoured Nations. The Borrower will ensure that, if the Borrower provides (other than pursuant to the Tranche A Exit Facility Agreement) to any lender as at the Effective Date, or provides to any other lender in the future, a financial ratio or other form of financial measurement covenant which is not specifically included in this Agreement, or which is more restrictive than the corresponding covenant in this Agreement, then this Agreement shall be deemed to have been amended automatically to have the benefit of such other present or future financial ratio or other form of financial measurement covenant; provided that if any such present or future financial ratio or other form of financial measurement covenant provided by the Borrower to another lender and not specifically included in this Agreement is changed or eliminated, the same change or elimination will automatically apply to this Agreement. For greater certainty, but without limitation, a covenant to maintain any particular type or class of assets or any particular type or class of liabilities (as the terms “asset” and “liability” are used under GAAP) at a specified maximum or minimum dollar amount (for example, a covenant that indebtedness will not exceed a fixed dollar amount) shall not constitute a “financial ratio or other financial measurement covenant”; however, a covenant such as a net worth covenant, which is not limited to any particular type or class of assets or any particular type or class of liabilities, shall constitute a “financial ratio or other financial measurement covenant”.

5.16     Landlord Consents. The Credit Parties shall use their best efforts to deliver to the Administrative Agent as promptly as possible a consent from each landlord of each leased switch site premises in such form as the Administrative Agent may agree.

5.17     Bank Accounts. All bank accounts and other investment accounts of the Credit Parties shall be maintained in Canada with a Lender or with a financial institution which has confirmed in writing to the Administrative Agent that such financial institution will not have a credit relationship with the Credit Parties and will not exercise any right of set-off or other similar right against the assets in any such account.

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ARTICLE 6
NEGATIVE COVENANTS

          From (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

6.1     Indebtedness. The Borrower will not, and will not permit any Credit Party to, create, incur, assume or permit to exist any Indebtedness, except:

(a)	any Indebtedness created hereunder;
(b)	any Indebtedness created under the Tranche A Exit Facility Agreement;
(c)	any Indebtedness created under the Tranche C Credit Agreement, the First Notes or the Second Notes;
(d)	Indebtedness existing on the date hereof and set forth in Schedule B and any extensions, renewals or replacements of any such Indebtedness so long as the terms and conditions of any such extension, renewal or replacement do not impose on any Credit Party any terms or conditions which are more onerous than the terms and conditions of the Indebtedness being extended, renewed or replaced except for changes in pricing resulting solely from changes in market conditions generally;
(e)	any Indebtedness of the Borrower to any other Credit Party and of any other Credit Party to the Borrower or any other Credit Party;
(f)	any Guarantee by any other Credit Party of Indebtedness of the Borrower or any other Credit Party;
(g)	any Indebtedness of any Credit Party incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Indebtedness secured by Purchase Money Liens and Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof, provided that (i) such Indebtedness is incurred prior to or within 30 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed Cdn.$5,000,000 at any time outstanding;
(h)	any Indebtedness in respect of sight trade letters of credit in an aggregate amount not exceeding Cdn.$5,000,000;

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(i)	any Indebtedness in respect of judgments against any Credit Party that the Borrower has determined in good faith will be (and which are) stayed or discharged within 45 days of the rendering thereof;
(j)	any Indebtedness in respect of Swap Agreements not prohibited by Section 6.5;
(k)	other unsecured Indebtedness of the Borrower in an aggregate principal amount not exceeding Cdn.$5,000,000 at any time;
(l)	any Permitted Subordinated Refinancing Debt; and
(m)	any other Indebtedness consented to by the Required Lenders.

6.2     Liens. The Parent and the Borrower will not, and will not permit any other Credit Party to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by the Parent, the Borrower or any other Credit Party, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens.

6.3     Fundamental Changes. The Parent and the Borrower will not, and will not permit any Credit Party to, merge into or amalgamate or consolidate with any other Person, or permit any other Person to merge into or amalgamate or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or any of the Equity Securities of any of the Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Subsidiary may amalgamate with the Borrower, (ii) any Subsidiary may amalgamate with any other Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve into the Borrower or another Credit Party if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and the Administrative Agent determines that such liquidation or dissolution is not disadvantageous to the Lenders, and (v) the Parent may amalgamate with the Pre-Filing Parent, as contemplated by Article 3 of the Plan of Arrangement; provided that any amalgamation pursuant to Sections 6.3(i), (ii) or (v) shall not be permitted unless the amalgamated corporation confirms to the Administrative Agent in writing that the amalgamated corporation is liable, by operation of law or otherwise, for the obligations of the Borrower or the relevant amalgamating corporation under this Agreement. The Borrower will not, and will not permit any Credit Party to, engage to any material extent in any material business other than the Business.

6.4     Investments, Loans, Advances, and Guarantees . The Parent and the Borrower will not, and will not permit any Credit Party to, purchase, hold or acquire (including pursuant to any amalgamation with any Person that was not a wholly-owned subsidiary prior to such amalgamation) any Equity Securities, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, provide any Guarantee of any obligations of, or make or permit

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to exist any Investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person, except:

(a)	Investments by a Credit Party in the Equity Securities of any other Credit Party, except the Parent;
(b)	loans or advances made by the Parent to the Borrower or any Subsidiary, by the Borrower to any Subsidiary, or made by any Subsidiary to the Borrower or any other Subsidiary;
(c)	Guarantees constituting Indebtedness permitted by Section 6.1;
(d)	Investments in Unrestricted Subsidiaries held by the Credit Parties on the Effective Date, and a further Investment of up to $3,500,000 in Inukshuk Internet Inc. to the extent necessary to permit Inukshuk Internet Inc. to make required payments in accordance with the requirements of its MCS licenses, and to make certain payments to employees;
(e)	Permitted Investments;
(f)	the existing Investments made by the Credit Parties and listed in Schedule “B” hereto; and
(g)	a further Investment of up to U.S.$500,000 in Argo II — The Wireless Internet Fund Limited Partnership.

For greater certainty, except as set forth in Section 6.4(d), the Credit Parties will not make any further Investment in any Unrestricted Subsidiary after the Effective Date.

6.5     Hedging Agreements. No Credit Party will enter into any Swap Agreement, other than U.S.$ Hedges having notional amounts not exceeding Cdn.$100,000,000 at any time (in the aggregate for all such Swap Agreements) and having termination dates not later than six months after the date of the relevant Swap Agreement.

6.6     Restricted Payments. The Borrower will not, and will not permit any Credit Party to, declare, pay or make, or agree to pay or make, directly or indirectly, any Restricted Payment, provided that (a) the Parent may declare and pay dividends with respect to the FPV Shares, the FPNV Shares, the SPV Shares and the SPNV Shares to the extent contemplated by the Parent Articles of Incorporation, provided that no Default has occurred and is continuing and there is sufficient aggregate Excess Cash Flow, proceeds from Asset Dispositions and proceeds from the issuance of Equity Securities to fund the payment of all amounts which, by the terms of the Intercreditor Agreement, are to be paid prior to any payment on account of dividends on the FPV Shares, the FPNV Shares, the SPV Shares and the SPNV Shares (or the payment of interest on the First Notes or Second Notes, as applicable), (b) the Borrower may declare and pay dividends to the Parent, (c) any Subsidiary may declare and pay dividends to the Parent, the Borrower or any wholly-owned Subsidiary and any wholly-owned Subsidiary may redeem or repurchase its own Equity Securities, (d) the Borrower may make

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Restricted Payments pursuant to and in accordance with management bonus plans, employee bonus plans, stock option plans, profit sharing plans and/or other benefit plans for management or employees of the Parent, the Borrower and the Subsidiaries, provided that the aggregate amount of cash payments made by the Parent, the Borrower and the Subsidiaries in any Fiscal Year pursuant to all such management bonus plans, employee bonus plans, stock option plans, profit sharing plans and other compensation benefit plans shall not exceed Cdn.$1,000,000, (e) the Parent may redeem, pursuant to Parent Articles of Incorporation, First Preferred Shares and Second Preferred Shares by issuing First Units and Second Units (as defined in the Plan of Arrangement).

6.7     Transactions with Affiliates. The Borrower will not, and will not permit any Credit Party to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favourable to the Borrower or such Credit Party than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among Credit Parties and not involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.6, and (d) any transaction permitted under Section 6.3. The Borrower and other Credit Parties will not enter into any transaction or series of transactions with Affiliates of the Parent, which involve an outflow of money or other Property from the Parent, the Borrower or other Credit Parties to an Affiliate of the Parent, including repayment of Indebtedness, or payment of management fees, affiliation fees, administration fees, compensation, salaries, asset purchase payments or any other type of fees or payments similar in nature, other than on terms and conditions substantially as favourable to the Parent, the Borrower and the other Credit Parties as would be obtainable by the Parent, the Borrower and the other Credit Parties in a reasonably comparable arm’s-length transaction with a Person other than an Affiliate of the Parent, the Borrower or the Subsidiaries, provided, however, that, in any event, the aggregate amount of all management fees, affiliation fees, administration fees and other similar fees paid by the Parent, the Borrower or any of the Subsidiaries to an Affiliate of the Parent, the Borrower or the Subsidiaries in any Fiscal Year shall not exceed Cdn.$2,000,000. The foregoing restrictions shall not apply to: (i) the payment of reasonable and customary fees to directors of the Parent or the Borrower who are not employees of the Parent or the Borrower, (ii) any other transaction with any employee, officer or director of the Parent, the Borrower or any Subsidiary pursuant to employee profit sharing and/or benefit plans and compensation and non-competition arrangements in amounts customary for corporations similarly situated to the Parent, the Borrower or any such Subsidiary and entered into in the ordinary course of business and approved by the board of directors of the Parent, the Borrower or such Subsidiary, or (iii) any reimbursement of reasonable out-of-pocket costs incurred by an Affiliate of the Parent or the Borrower on behalf of or for the account of the Parent, the Borrower or any of the Subsidiaries.

6.8     Repayment of Debt. The Borrower will not, and will not permit any Credit Party to, repay, prepay, redeem, repurchase, defease or otherwise make any payment on account of any Indebtedness for borrowed money except for (a) payment on account of Indebtedness created hereunder, (b) any payment consented to in writing by the Required Lenders, (c) Indebtedness for borrowed money permitted by Section 6.1, the repayment of which

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is not restricted by Section 6.6, and (d) any payment made pursuant to Section 2.2 of the Intercreditor Agreement.

6.9     Restrictive Agreements. The Borrower will not, and will not permit any Credit Party to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Credit Party to create, incur or permit to exist any Lien upon any of its property or assets, (b) the ability of any Credit Party to pay dividends or other distributions with respect to any Equity Securities or with respect to, or measured by, its profits or to make or repay loans or advances to any other Credit Party or to provide a Guarantee of any Indebtedness of any other Credit Party, (c) the ability of any Credit Party to make any loan or advance to any other Credit Party, or (d) the ability of any Credit Party to sell, lease or transfer any of its property to the Borrower or any other Credit Party; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule B (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of any Credit Party pending such sale, provided such restrictions and conditions apply only to the Credit Party that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other ordinary course contracts restricting the assignment thereof.

6.10     Capital Lease Obligations. The Borrower will not create, incur, assume or suffer to exist, or permit any Credit Party to create, incur, assume or suffer to exist, any Capital Lease Obligations, whether directly or as a guarantor, if, after giving effect thereto, the aggregate amount of all payments required to be made by the Parent, the Borrower and the other Credit Parties on a consolidated basis pursuant to such Capital Lease Obligations would exceed Cdn.$1,000,000 in any Fiscal Year.

6.11     Sales and Leasebacks. No Credit Party shall enter into any arrangement, directly or indirectly, with any Person whereby any Credit Party shall sell or transfer any property, whether now owned or hereafter acquired, and whereby such Credit Party shall then or thereafter rent or lease as lessee such property or any part thereof or other property which such Credit Party intends to use for substantially the same purpose or purposes as the property sold or transferred.

6.12     Pension Plan Compliance. If any Credit Party establishes a Pension Plan, such Credit Party will not (a) terminate such Pension Plan in a manner, or take any other action with respect to such Pension Plan, which could reasonably be expected to have a Material Adverse Effect; (b) fail to make full payment when due of all amounts which, under the provisions of such Pension Plan, any agreement relating thereto or applicable Law, any Credit Party is required to pay as contributions thereto, except where the failure to make such payments could not reasonably be expected to have a Material Adverse Effect; (c) permit to exist any accumulated funding deficiency, whether or not waived, with respect to such Pension Plan in an

\

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amount which could reasonably be expected to cause a Material Adverse Effect; (d) contribute to or assume an obligation to contribute to any “multi-employer pension plan” as such term is defined in the Pension Benefits Act (Ontario); (e) permit the actuarial present value of the benefit liabilities (computed on an accumulated benefit obligation basis in accordance with GAAP) under all Pension Plans in the aggregate to exceed the current value of the assets of all Pension Plans in the aggregate that are allocable to such benefit liabilities, in each case only to the extent such liabilities and assets relate to benefits to be paid to employees of the Credit Parties, by an amount that could reasonably be expected to cause a Material Adverse Effect.

6.13     Sale or Discount of Receivables. The Borrower will not, and will not permit any Credit Party to, discount or sell (with or without recourse) any notes receivable or accounts receivable to any Person (except for sales from one Credit Party to another Credit Party), other than accounts receivable that are more than 90 days overdue and which are sold on arm’s length commercial terms to a factoring company.

6.14     Unconditional Purchase Obligations. The Borrower will not, and will not permit any Credit Party to, enter into or be a party to, any material contract for the purchase of materials, supplies or other property or services, if such contract requires that payment be made by it regardless of whether or not delivery of such materials, supplies or other property or services is ever made.

6.15     Ownership of Shares. The Borrower will not authorize or issue any shares in its capital to any Person other than the Parent and the Pre-Filing Parent, and the Borrower will not permit the transfer of any shares in its capital to any Person other than the Parent. No Subsidiary will authorize or issue any shares in its capital to any Person other than another Credit Party, and no Subsidiary will permit the transfer of any shares in its capital to any Person other than another Credit Party.

6.16     No Amendments to Material Contracts. The Borrower will not amend (or waive any provision of), or permit any Credit Party to amend (or waive any provision of), any Material Contract in a manner which may reasonably be expected to have a Material Adverse Effect.

ARTICLE 7
EVENTS OF DEFAULT

7.1     Events of Default. If any of the following events (“Events of Default”) shall occur:

(a)	the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b)	the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) above) payable under this Agreement, when and as the same shall become due and payable;

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(c)	any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in or in connection with any Financing Document or any amendment or modification thereof or waiver thereunder shall prove to have been incorrect when made or deemed to be made, or any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Financing Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed to be made;
(d)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.1(xii)(b) (notices of Default or Events of Default), 5.2 (with respect to the Borrower’s existence), 5.14 (Financial Covenants) or in Article 6 (or in any comparable provision of any other Financing Document);
(e)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clauses (a), (b) or (d) above) or any other Financing Document, and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);
(f)	any Credit Party shall fail to make any payment whether of principal or interest, and regardless of amount, in respect of any Material Indebtedness, when and as the same shall become due and payable;
(g)	any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 7.1(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness so long as the proceeds of such sale or transfer are sufficient to, and are applied to, reduce such secured Indebtedness to nil; and provided further that this Section 7.1(g) shall not apply where the holder of such Material Indebtedness is a Lender or a person “related” to a Lender, as “related” is defined in the Income Tax Act, and the event or condition resulting in such Material Indebtedness becoming due prior to its scheduled maturity is an event or a condition restricting the application of the exemption of sub-paragraph 212(1)(b)(vii) of the Income Tax Act or that would have restricted the application of such exemption should the holder have been a non-resident of Canada for the purpose of the Income Tax Act; and provided further that this Section 7.1(g) shall not apply if the event or condition is limited solely to the occurrence of a “Change of Control” that creates

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	an “Event of Default” pursuant to Section 7.1(q) of the Tranche A Exit Facility Agreement;
(h)	any Credit Party:

(i)	becomes insolvent, or generally does not or becomes unable to pay its debts or meet its liabilities as the same become due, or admits in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, or proposes a compromise or arrangement between it and any class of its creditors;
(ii)	commits an act of bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an assignment of its property for the general benefit of its creditors under such Act, or makes a proposal (or files a notice of its intention to do so) under such Act;
(iii)	institutes any proceeding seeking to adjudicate it an insolvent, or except as permitted by Section 6.3, seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity, or files an answer admitting the material allegations of a petition filed against it in any such proceeding;
(iv)	applies for the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property; or
(v)	threatens to do any of the foregoing, or takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions described in this Section 7.1(h) or in Section 7.1(i), or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof,

(i) any petition is filed, application made or other proceeding instituted against or in respect of any Credit Party:

(i)	seeking to adjudicate it an insolvent;
(ii)	seeking a receiving order against it under the Bankruptcy and Insolvency Act (Canada);

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(iii)

seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity; or

(iv)

seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property;

	and such petition, application or proceeding continues undismissed, or unstayed and in effect, for a period of 30 days after the institution thereof, provided that if an order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against any Credit Party thereunder in the interim, such grace period will cease to apply, and provided further that if any Credit Party files an answer admitting the material allegations of a petition filed against it in any such proceeding, such grace period will cease to apply;
(j)	any other event occurs which, under the Laws of any applicable jurisdiction, has an effect equivalent to any of the events referred to in either of Sections 7.1(h) or (i);
(k)	one or more judgments of a court of competent jurisdiction for the payment of money in a cumulative amount in excess of Cdn.$10,000,000 (or its then equivalent in any other currency) in the aggregate is rendered against the Borrower, any other Credit Party or any combination thereof and the Borrower or other Credit Party has not (i) provided for its discharge in accordance with its terms within 30 days from the date of entry thereof, or (ii) procured a stay of execution thereof within 30 days from the date of entry thereof and within such period, or such longer period during which execution of such judgment has not been stayed, appealed such judgment and caused the execution thereof to be stayed during such appeal, provided that if enforcement and/or realization proceedings are lawfully commenced in respect thereof in the interim, such grace period will cease to apply;
(l)	any property of any Credit Party having a Fair Market Value in excess of Cdn.$5,000,000 (or its then equivalent in any other currency) in the aggregate is seized (including by way of execution, attachment, garnishment, levy or distraint), or any Lien thereon securing Indebtedness in excess of Cdn.$5,000,000 (or its then equivalent in any other currency) is enforced, or such property has become subject to any charging order or equitable execution of a Governmental Authority, or any writ of execution or distress warrant exists in respect of any Credit Party or

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	the property of any of them, or any sheriff or other Person becomes lawfully entitled by operation of law or otherwise to seize or distrain upon such property and in any case such seizure, enforcement, execution, attachment, garnishment, distraint, charging order or equitable execution, or other seizure or right, continues in effect and is not released or discharged for more than 30 days or such longer period during which entitlement to the use of such property continues with the Credit Party, and the Credit Party is contesting the same in good faith and by appropriate proceedings, provided that if the property is removed from the use of the relevant Credit Party, or is sold, in the interim, such grace period will cease to apply, and provided further that if the Person seizing the property is a Lender or any person “related” to the Lender (as “related” is defined in the Income Tax Act), the seizure will not constitute an Event of Default;
(m)	one or more final judgments of a court of competent jurisdiction, not involving the payment of money and not otherwise specified in this Section 7.1, has been rendered against any Credit Party, the result of which could reasonably be expected to result in a Material Adverse Effect, so long as the Credit Party has not (i) provided for its discharge in accordance with its terms within 30 days from the date of entry thereof, or (ii) procured a stay of execution thereof within 30 days from the date of entry thereof and within such period, or such longer period during which execution of such judgment has been stayed, appealed such judgment and caused the execution thereof to be stayed during such appeal, provided that if enforcement and/or realization proceedings are lawfully commenced in respect thereof in the interim, such grace period will cease to apply;
(n)	this Agreement, any other Financing Document or any material obligation or other provision hereof or thereof at any time for any reason terminates or ceases to be in full force and effect and a legally valid, binding and enforceable obligation of any Credit Party, is declared to be void or voidable or is repudiated, or the validity, binding effect, legality or enforceability hereof or thereof is at any time contested by any Credit Party, or any Credit Party denies that it has any or any further liability or obligation hereunder or thereunder or any action or proceeding is commenced to enjoin or restrain the performance or observance by any Credit Party of any material terms hereof or thereof or to question the validity or enforceability hereof or thereof, or at any time it is unlawful or impossible for the Credit Party to perform any of its material obligations hereunder or thereunder, except to the extent that any of the foregoing results directly from the gross negligence or wilful misconduct of the Administrative Agent or any Lender;
(o)	any Lien purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement, the Intercreditor Agreement or such Security Document) Lien in Collateral with a Fair Market Value or book value (whichever is greater) in excess, individually or in the aggregate, of Cdn.$5,000,000;

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(p)	a Material Adverse Change shall occur;
(q)	a Change in Control shall occur; or
(r)	if the Borrower fails to make any offer to prepay Loans required to be made by Section 2.2(b) of the Intercreditor Agreement, or if the Borrower fails to make a prepayment of Loans in the full amount required as a result of the acceptance of any such offer made pursuant to Section 2.2(b) of the Intercreditor Agreement;

then, and in every such event (other than an event with respect to the Borrower described in clause (h), (i) or (j) above), and at any time thereafter during the continuance of such event or any other such event, but subject always to the provisions of the Intercreditor Agreement, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind except as set forth earlier in this paragraph, all of which are hereby waived by the Borrower; and in the case of any event with respect to the Borrower described in clause (h), (i) or (j) above, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE 8
THE ADMINISTRATIVE AGENT

8.1     Appointment of Agent. Each Lender hereby designates JPMorgan Chase Bank, Toronto Branch, as Administrative Agent to act as herein specified and as specified in the other Financing Documents. Each Lender hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions of the Financing Documents and to exercise such powers and to perform such duties thereunder as are specifically delegated to or required of the Administrative Agent by the terms thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its agents or employees.

8.2     Limitation of Duties of Agent. The Administrative Agent shall have no duties or responsibilities except those expressly set forth with respect to the Administrative Agent in this Agreement and as specified in the other Financing Documents. Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or omitted by it as such hereunder or in connection herewith, unless caused by its or their gross negligence or wilful misconduct. The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have, by reason of this Agreement or the other Financing Documents, a fiduciary relationship in respect of any Lender. Nothing in this Agreement or the other Financing Documents, expressed or implied, is intended to or shall

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be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement except as expressly set forth herein. The Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to this Agreement or the other Financing Documents unless it is requested in writing to do so by the Required Lenders.

8.3     Lack of Reliance on the Agent.

(a)

Independent Investigation. Independently, and without reliance upon the Administrative Agent, each Lender, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Credit Parties in connection with the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of the Credit Parties, and, except as expressly provided in this Agreement and the other Financing Documents, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the consummation of the Transactions or at any time or times thereafter.

(b)

Agent Not Responsible. The Administrative Agent shall not be responsible to any Lender for any recitals, statements, information, representations or warranties contained herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, collectibility, priority or sufficiency of this Agreement or the other Financing Documents or the financial condition of any Credit Party or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or the other Financing Documents, or the financial condition of any Credit Party, or the existence or possible existence of any Default or Event of Default.

8.4     Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Lenders or the Required Lenders (as the case may be) with respect to any act or action (including the failure to act) in connection with this Agreement or the other Financing Documents, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received written instructions from the Lenders or the Required Lenders, as applicable, and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement and the other Financing Documents in accordance with the instructions of the Required Lenders, or, to the extent required by Section 9.2, all of the Lenders.

8.5     Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or facsimile message, electronic mail, cablegram, radiogram, order or other documentary teletransmission or telephone message believed by it to

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be genuine and correct and to have been signed, sent or made by the proper Person. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

8.6     Indemnification of Agent. To the extent the Administrative Agent is not reimbursed and indemnified by the Borrower, each Lender will reimburse and indemnify the Administrative Agent, in proportion to its aggregate Applicable Percentage, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in performing its duties hereunder, in any way relating to or arising out of this Agreement or any other Financing Document, including all applicable Taxes to which the Administrative Agent may be subject in so performing or that are in any way so related; provided that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct.

8.7     The Agent in its Individual Capacities. With respect to its obligations under this Agreement and the Loans made by it, JPMorgan Chase Bank, Toronto Branch, in its capacity as a Lender hereunder, shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties, if any, specified herein; and the terms “Lenders” and “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include JPMorgan Chase Bank, Toronto Branch in its capacity as a Lender hereunder. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower or any affiliate of the Borrower as if it were not performing the duties, if any, specified herein, and may accept fees and other consideration from the Borrower for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

8.8     May Treat Lender as Owner. The Borrower and the Administrative Agent may deem and treat each Lender as the owner of the Loans recorded on the Register maintained pursuant to Section 9.4(b) for all purposes hereof until a written notice of the assignment or transfer thereof shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who at the time of making such request or giving such authority or consent is the owner of a Loan shall be conclusive and binding on any subsequent owner, transferee or assignee of such Loan.

8.9     Successor Administrative Agent.

(a) Administrative Agent Resignation. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, upon five Business Days’ notice to the Borrower, to appoint a successor Administrative Agent (who

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shall not be a non-resident of Canada within the meaning of the Income Tax Act), subject to the approval of the Borrower, such approval not to be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation then, upon five Business Days’ notice to the Borrower, the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent (subject to approval of the Borrower, such approval not to be unreasonably withheld), which shall be a financial institution organized under the laws of Canada having a combined capital and surplus of at least Cdn.$500,000,000 or having a parent company with combined capital and surplus of at least Cdn.$500,000,000.

(b)

Rights, Powers, etc. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.

8.10     Lenders to Enforce through Administrative Agent. Each Lender hereby acknowledges that, to the extent permitted by applicable Law, the Security Documents and the remedies provided thereunder to the Lenders are for the benefit of the Lenders collectively and acting together and not severally, and further acknowledges that each Lender’s rights hereunder and under the Security Documents are to be exercised collectively, not severally, by the Administrative Agent upon the decision of the Required Lenders. Accordingly, notwithstanding any of the provisions contained herein or in the Security Documents, each of the Lenders hereby covenants and agrees that it shall not be entitled to take any action hereunder or thereunder, including any declaration of default hereunder or thereunder, but that any such action shall be taken only by the Administrative Agent with the prior written agreement of the Required Lenders, provided that, notwithstanding the foregoing, in the absence of instructions from the Lenders (or the Required Lenders) and where in the sole opinion of the Administrative Agent the exigencies of the situation so warrant such action, the Administrative Agent may without notice to or consent of the Lenders (or the Required Lenders) take such action on behalf of the Lenders as it deems appropriate or desirable in the interests of the Lenders. Each Lender hereby further covenants and agrees that upon any such written consent being given by the Required Lenders, it shall co-operate fully with the Administrative Agent to the extent requested by the Administrative Agent, and each Lender further covenants and agrees that all proceeds from the realization of the Security Documents, to the extent permitted by applicable Law, are held for the benefit of all of the Lenders and shall be shared among the Lenders rateably in accordance with this Agreement, and each Lender acknowledges that all costs of any such realization (including all amounts for which the Administrative Agent is required to be indemnified under the provisions hereof) shall be shared among the Lenders rateably in accordance with this Agreement. Each Lender covenants and agrees to do all acts and things and to make, execute

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and deliver all agreements and other instruments, so as to fully carry out the intent and purpose of this Section and each Lender hereby covenants and agrees that it shall not seek, take, accept or receive any security for any of the obligations and liabilities of the Borrower hereunder or under the other Financing Documents, or any other document, instrument, writing or agreement ancillary hereto or thereto, other than such security as is provided hereunder or thereunder, unless all of the Lenders shall at the same time obtain the benefit of any such security or agreement, as the case may be.

8.11     Quebec Security. For greater certainty, and without limiting the powers of the Administrative Agent or the Collateral Agent, or any other Person acting as an agent or mandatary for such agents hereunder or under any of the other Financing Documents, the Borrower and the Parent hereby acknowledge that, for purposes of holding any security granted by any Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of the Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party, the Collateral Agent shall be the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Quebec) for all present and future Lenders, and in particular for all present and future holders of any such bond. Each Lender hereby: (i) irrevocably constitutes, to the extent necessary, the Collateral Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any other Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party; and (ii) appoints and agrees that the Administrative Agent may act as the bondholder and mandatary with respect to any bond that may be issued by the Borrower or any Credit Party and pledged in their favour from time to time. Each assignee of a Lender shall be deemed to have confirmed and ratified the constitution of the Collateral Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) and shall be deemed to have confirmed and ratified the constitution and the Administrative Agent as bondholder and mandatary with respect to any bond that may be issued by the Borrower or any Credit Party and pledged from time to time in their favour by the execution of an Assignment and Assumption.

Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), the Administrative Agent may acquire and be the holder of any bond issued by the Borrower or any other Credit Party (i.e. the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Credit Party). The Borrower and each Credit Party hereby acknowledge that such bond constitutes a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.

The Collateral Agent herein appointed as fondé de pouvoir shall have the same rights, powers and immunities as provided under the Intercreditor Agreement. Without limitation, the provisions of Section 8.9 shall apply mutatis mutandis to the resignation and appointment of a successor Collateral Agent acting as fondé de pouvoir.

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ARTICLE 9
MISCELLANEOUS

9.1     Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile in each case to the addressee, as follows:

(i)	if to the Borrower:
	MICROCELL SOLUTIONS INC.
	800 de La Gauchetière Street West
	Suite 4000
	Montreal, Quebec
	H5A 1K3
	Attention:         Chief Financial Officer
	Facsimile:         514.846.6959
(ii)	if to the Administrative Agent or the Collateral Agent:
	JPMORGAN CHASE BANK, TORONTO BRANCH
	Suite 1800, South Tower
	Royal Bank Plaza
	200 Bay Street, P.O. Box 80
	Toronto, ON M5J 2J2
	Attention:         Vice President, Corporate Finance
	Facsimile:         416.981.9128
(iii)	if to any Lender, to it at its address (or facsimile number) set forth
	opposite its name in the execution page(s) of this Agreement.

     (b)     Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communication to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

     (c)     Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

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9.2     Waivers; Amendments.

(a)

No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 9.2(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the continuation, conversion or rolling over of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)

Neither this Agreement nor any other Financing Document (or any provision hereof or thereof) may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the amount or extend the expiry date of any Loan of any Lender without the prior written consent of each Lender directly affected thereby, (ii) reduce the principal amount of any Loan or reduce the rate of interest or any fee applicable to any Loan without the prior written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable in respect thereof, or reduce the amount of, waive or excuse any such payment, without the prior written consent of each Lender directly affected thereby, (iv) change Section 2.12(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the prior written consent of each Lender directly affected thereby, (v) change any of the provisions of this Section 9.2 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the prior written consent of each Lender, or (vi) waive any Event of Default under Section 7.1 (h), (i) or (j) without the prior written consent of each Lender, or (vii) release any Credit Party from any material obligations under the Security Documents and other instruments contemplated by this Agreement or release or discharge any of the Liens arising under the Security Documents, in each case without the prior written consent of each Lender; and provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent without the prior written consent of the Administrative Agent. For greater certainty, the Administrative Agent may

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release and discharge the Liens constituted by the Security Documents to the extent necessary to enable the Borrower or any other Credit Party to complete any asset sale which is not prohibited by this Agreement or the other Financing Documents, and the Administrative Agent may agree to amend or waive Section 2.2 of the Intercreditor Agreement with the consent of the Required Lenders.

9.3     Expenses; Indemnity; Damage Waiver.

(a)

The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and all applicable Taxes, in connection with the syndication of the credit facilities provided for herein and the preparation and administration of this Agreement and the other Financing Documents, (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and applicable Taxes, in connection with any amendments, modifications or waivers of the provisions hereof or of any of the other Financing Documents, (whether or not the transactions contemplated hereby or thereby shall be consummated), and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent or any Lender and all applicable Taxes, in connection with the enforcement or protection of their rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)

The Borrower shall indemnify the Administrative Agent, the Collateral Agent and each Lender, as well as each Related Party and each assignee of any of the foregoing Persons (each such Person and each such assignee being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, cost recovery actions, damages, expenses and liabilities of whatsoever nature or kind and all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, travel expenses and reasonable fees, charges and disbursements of counsel) and all applicable Taxes to which any Indemnitee may become subject arising out of or in connection with (i) the execution or delivery of the Financing Documents or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder, and the consummation of the Transactions or any other transactions thereunder, (ii) any Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Credit Party, or any Environmental Liability related in any way to any Credit Party, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of

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whether any Indemnitee is a party thereto, (v) any other aspect of this Agreement and the other Financing Documents, or (vi) the enforcement of any Indemnitee’s rights hereunder and any related investigation, defence, preparation of defence, litigation and enquiries, in each case regardless of whether or not the Transactions are consummated; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct of or material breach of this Agreement by such Indemnitee. No Indemnitee shall be liable for any indirect or consequential damages in connection with its activities related to the Loans nor shall any Credit Party be liable for any indirect or consequential damages in connection with its activities related to the Loans.

(c)	To the extent that the Borrower fails to pay any amount required to be paid under Sections 9.3 (a) or (b), each Lender severally agrees to pay to the Administrative Agent or the Collateral Agent (as applicable) such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent, in its capacity as such.
(d)	The Borrower shall not assert, and hereby waives (to the fullest extent permitted by applicable Law), any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Financing Document, or any agreement or instrument contemplated thereby, the Transactions, any Loan or the use of the proceeds thereof.
(e)	Any inspection of any property of any Credit Party made by or through the Administrative Agent or any Lender is for purposes of administration of this Agreement and the Financing Documents only, and neither the Borrower nor any other Credit Party is entitled to rely upon the same (whether or not such inspections are at the expense of the Borrower).
(f)	By accepting or approving anything required to be observed, performed, fulfilled or given to the Administrative Agent or the Lenders pursuant to the Financing Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Administrative Agent or the Lenders.
(g)	The relationship between the Borrower and the Administrative Agent and the Lenders is, and shall at all times remain, solely that of borrower and lenders.

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	Neither the Administrative Agent nor the Lenders shall under any circumstance be construed to be partners or joint venturers of the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a fiduciary relationship with the Borrower or its Affiliates, or to owe any fiduciary duty to the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to the Borrower or its Affiliates to select, review, inspect, supervise, pass judgment upon or inform the Borrower or its Affiliates of any matter in connection with their property or the operations of the Borrower or its Affiliates. The Borrower and its Affiliates shall rely entirely upon their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Administrative Agent or the Lenders in connection with such matters is solely for the protection of the Administrative Agent and the Lenders, and neither the Borrower nor any other Person is entitled to rely thereon.
(h)	The Administrative Agent and the Lenders shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of any Credit Party or their Affiliates and the Borrower hereby indemnifies and holds the Administrative Agent and the Lenders harmless on the terms set forth in Section 9.3(b) from any such loss, damage, liability or claim.
(i)	This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of the Borrower, the Administrative Agent and the Lenders in connection with the Loans, and is made for the sole benefit of the Borrower, the Administrative Agent and the Lenders, and their respective successors and permitted assigns. Except as provided in Sections 9.3(b) and 9.4, no other Person shall have any rights of any nature hereunder or by reason hereof.
(j)	All amounts due under this Section 9.3 shall be payable not later than three Business Days after written demand therefor.

9.4     Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b) Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender or any Lender Affiliate, the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed); provided further that the Borrower’s consent shall not be required with respect to any assignment made at any time after the occurrence and during the continuance of an Event of Default, (ii) except in the case of an assignment to a Lender or any Lender Affiliate, the aggregate amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date on which the Assignment and Assumption relating to such assignment is delivered to the Administrative Agent) shall not be less than U.S.$3,500,000 (if in U.S.$) or Cdn.$5,000,000 (if in Cdn.$), unless both the Borrower and the Administrative Agent otherwise consent in writing, and the amount held by each Lender after each such assignment shall not be less than the minimum assignable amount described in this section above, unless both the Borrower and the Administrative Agent otherwise consent in writing, (iii) each partial assignment in respect of any assigned Loans shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in respect of such Loans, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with (except in the case of an assignment by a Lender to an Affiliate of such Lender) a processing and recordation fee of Cdn.$5,000, payable by the assigning Lender, (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, and (vi) the Borrower shall not incur any increased costs merely due to any such assignment including any obligation to make any payment under Section 2.11 that would exceed the amount payable to the assigning Lender. The Administrative Agent shall provide the Borrower and each Lender with written notice of any change in (or new) address of a Lender disclosed in an Administrative Questionnaire. Subject to acceptance and recording thereof pursuant to Section 9.4(c), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, shall have all of the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.9, 2.10 and 2.11 and 9.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.4 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 9.4(d). The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in Toronto, Ontario a copy of each Assignment

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	and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders and the principal amount of the Loans owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(c)	Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 9.4(b) and any written consent to such assignment required by Section 9.4(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in Section 9.4(b).
(d)	Any Lender may, without notice to the Borrower or the consent of the Borrower or the Administrative Agent, sell participations to one or more Persons (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.2(b) that affects such Participant. Subject to Section 9.4(e), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.9, 2.10 and 2.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 9.4(d). To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.8 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.12(c) as though it were a Lender.
(e)	A Participant shall not be entitled to receive any greater payment under Section 2.9 or 2.10 than the applicable Lender would have been entitled to receive with

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	respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.11 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.11(e) as though it were a Lender.
(f)	Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and Section 9.4 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g)	Any assignment or grant of a participation pursuant to Section 9.4 shall constitute neither a repayment by the Borrower to the assigning or granting Lender of any Loan included therein, nor a new advance of any such Loan to the Borrower by such Lender or by the assignee or Participant, as the case may be. The parties acknowledge that the Borrower’s obligations hereunder with respect to any such Loans will continue and will not constitute new obligations as a result of such assignment or participation.

9.5     Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid. Sections 2.9, 2.10 or 2.11 and 9.3 and Article 8 shall survive and remain in full force and effect, regardless of the consummation of the Transactions, the repayment of the Loans or the termination of this Agreement or any provision hereof.

9.6     Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Financing Documents and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and

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thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed original or faxed counterpart of a signature page of this Agreement by facsimile shall be as effective as delivery of a manually executed original counterpart of this Agreement.

9.7     Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.8     Right of Set Off. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, but subject always to the provisions of the Intercreditor Agreement, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set off) which such Lender may have.

9.9     Governing Law; Jurisdiction; Consent to Service of Process.

(a)	This Agreement shall be construed in accordance with and governed by the Laws of the Province of Ontario.
(b)	The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the Courts of the Province of Ontario, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement, or any other Financing Document or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in Ontario. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Financing Document against the Borrower or its properties in the courts of any other jurisdiction.
(c)	The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9.9(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Law,

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	any forum non conveniens defence to the maintenance of such action or proceeding in any such court.
(d)	Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

9.10     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FINANCING DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

9.11     Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.12     Confidentiality. The Administrative Agent, the Collateral Agent and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to each of their Affiliates, directors, officers, employees, agents and advisors, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or other Governmental Authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Financing Document or any suit, action or proceeding relating to any Financing Document or the enforcement of rights thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or prospective assignee of or Participant in any of its rights or obligations under this Agreement, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section, or (ii) becomes available to the Administrative Agent, the Collateral Agent or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower, any of its subsidiaries, or their respective business, other than any such information that is available to the Administrative Agent, the Collateral Agent or any Lender on a non-confidential basis prior to disclosure by the

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Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified as confidential in writing at the time of delivery. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

[The balance of this page is intentionally left blank; signature pages follow.]

S-1 TRANCHE B CREDIT AGREEMENT

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWER	PARENT
MICROCELL SOLUTIONS INC.	MICROCELL TELECOMMUNICATIONS INC.
By:	By:
By:	By:
AGENTS
JPMORGAN CHASE BANK TORONTO BRANCH,  as Administrative Agent under the Tranche B Credit Agreement and as Collateral Agent
By:
By:

-2- TRANCHE B CREDIT AGREEMENT

TRANCHE B LENDERS
	Address: (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:
	Postal/Zip Code:
By:	Country:
Name:
Title:	Contact:
	Phone:
	Fax:
	E-mail:

SCHEDULE A

LENDERS LOANS

	U.S.$ Loans	Cdn.$ Loans
Holders of Pre-Filing Hedging Obligations
Canadian Imperial Bank of Commerce	US$0	C$1,993,861
JPMorgan Chase Bank	US$1,963,134	C$0
Holders of Pre-Filing Loans
JPMorgan Chase Bank, Toronto Branch	US$0	C$14,309,473
JPMorgan Chase Bank	US$12,521,286	C$0
Credit Suisse First Boston, Cayman Island Branch	US$8,323,137	C$1,795,961
Credit Suisse First Boston International	US$924,793	C$0
Morgan Stanley Prime Income Trust	US$8,166,303	C$0
Wayland Investment Fund, LLC	US$3,418,842	C$5,914,793
Wayland Investment Fund II, LLC	US$11,658,773	C$4,411,032
Wayland Recovery Fund, LLC	US$4,227,625	C$0
Millenium Partners, L.P.	US$0	C$1,846,724
GE VFS Canada Limited Partnership	US$1,840,915	C$7,189,033
Bank of America, N.A., Canada Branch	US$0	C$6,917,300
Bank of Montreal	US$0	C$3,847,100
Caisse de Depot et Placement du Quebec	US$0	C$3,508,776
Dresdner Bank AG, New York and Grand Cayman Branches	US$0	C$3,508,776
Skandinaviska Enskilda Banken AB	US$0	C$16,821,017
Swedbank ForeningsSparbanken AB	US$0	C$10,196,555
KZH CypressTree-1 LLC	US$4,924,555	C$0
KZH ING-2 LLC	US$2,642,265	C$0
KZH Sterling LLC	US$1,314,939	C$0
Archimedes Funding III, Ltd.	US$1,321,133	C$0
Archimedes Funding IV (Cayman), Ltd.	US$264,227	C$0
ING Prime Rate Trust	US$2,510,152	C$0
ING Senior Income Fund	US$921,077	C$0
ING-Oryx CLO, Ltd.	US$660,566	C$0
SEQUILS Centurion V. Ltd.	US$1,317,417	C$0
ML CLO XX Pilgrim America (Cayman) Ltd.	US$831,621	C$0
Toronto Dominion (New York)	US$1,321,133	C$0
Centurion CDO I, Limited	US$528,453	C$0
Centurion CDO II, Ltd.	US$1,321,133	C$0
Centurion CDO III, Limited	US$528,453	C$0

-2- TRANCHE B CREDIT AGREEMENT

	U.S.$ Loans	Cdn.$ Loans
Merrill Lynch Canada Inc.	US$0	C$3,508,776
Merrill Lynch, Pierce, Fenner, & Smith Inc.	US$1,563,021	C$0
Nemean CLO, Ltd.	US$1,049,474	C$0
Alliance Capital Funding, L.L.C	US$1,471,853	C$0
KS Capital Partners, LP	US$414,995	C$0
KS International, Inc.	US$110,981	C$0
Aspen Partners LP	US$13,003,640	C$11,829,586
Cypress Management Partnership	US$4,714,215	C$0
RCG Carpathia Master Fund, Ltd.	US$12,789,349	C$0
York Capital Management, L.P.	US$23,640,299	C$0
Harbert Distressed Investment Master Fund, Ltd.	US$0	C$3,508,776
Valentis Investors LLC	US$1,585,359	C$3,693,448
Savitz Management LLC	US$528,453	C$0
Totals:	US$134,323,571	C$104,800,986
	=
	C$195,199,014

SCHEDULE B

DISCLOSED MATTERS

[Note: The numbers in parentheses denote the provision of the Credit Agreement which
refers to this Schedule B.]

Governmental Approvals (3.3)

1. None

Litigation (3.5)

1. On April 10, 2002, ASP WirelessNet Inc. (“ASP”), a former service provider of the Borrower, filed a notice of arbitration pursuant to an agreement that ASP had with the Borrower. ASP claims in the notice of arbitration that the Borrower has breached its agreements with ASP and that it therefore suffered damages in the amount of $18.5 million, which ASP is claiming from the Borrower. The Borrower considers ASP’s claim as frivolous and unfounded in fact and in law and intends to vigorously contest it.

Real Property and Office and Switchroom Leases (3.8)

Owned Real Properties

Immovable Properties

Québec Property

Le lot UN MILLION DEUX CENT CINQUANTE SEPT MILLE CINQ CENT TREIZE (1 257 513) du cadastre du Québec, circonscription foncière de Québec.

Nicolet Property

Un immeuble situé dans le secteur St-Grégoire de Ville de Bécancour, connu et désigné comme étant le lot numéro SEIZE de la subdivision officielle du lot originaire numéro CINQUANTE-NEUF (59-16) du cadastre de la Paroisse de St-Grégoire, circonscription foncière de Nicolet.

Hull Property

Un immeuble situé en la Municipalité de Gatineau, connu et désigné comme étant le lot numéro UN MILLION TROIS CENT SOIXANTE-TREIZE MILLE TROIS CENT SOIXANTE-DOUZE (1 373 372) du Cadastre du Québec, circonscription foncière de Hull.

-2-

Trois-Rivières Property

Un immeuble situé en la Municipalité de Pointe-du-Lac connu et désigné comme étant le lot DEUX MILLIONS TROIS CENT TRENTE ET UN MILLE SEPT CENT TRENTE-NEUF (2 331 739) du cadastre du Québec, circonscription foncière de Trois-Rivières.

L’Assomption Property

(a) Le lot numéro TRENTE-DEUX de la subdivision officielle du lot originaire numéro TROIS CENT QUARANTE-HUIT (348-32) du cadastre officiel de la Paroisse de Saint-Henri-de-Mascouche, circonscription foncière de l’Assomption.

(b) Le lot numéro DIX-NEUF de la subdivision officielle du lot originaire numéro TROIS CENT QUARANTE-NEUF (349-19) dudit cadastre.

Champlain Property

Un immeuble situé en la Municipalité de Saint-Louis-de-France, connu et désigné comme étant une partie du lot SOIXANTE-CINQ (Ptie 65) du cadastre de la Paroisse de Saint-Maurice, circonscription foncière de Champlain, de figure irrégulière, dont les tenants et aboutissants sont:

- vers le nord-est, par la rue Courteau (montré à l’originaire) et par une partie du lot 65, rue Courteau; vers le sud-est, par une partie du lot 65; vers le sud-ouest, par le lot 67-1 et par une partie du lot 67; vers le nord-ouest, par le rang St-Alexis (montré à l’originaire);

Rattachement :

Le coin nord de ce lot correspond au coin nord du lot 65;

Dimensions :

	DIRECTION	LONGUEUR
LIGNE	GÉODÉSIQUE	MÈTRES		LIMITE
10261-23847	136°50’20’’		286,61	nord-est
23847-10257	146°27’10’’		30,91	nord-est
10257-10258	136°57’15’’		49,76	nord-est
10258-10223	220050’30’’		147,36	sud-est
10223-10124	316033’25’’		375,25	sud-ouest
10124-10261	44013’53’’		153,82	nord-ouest

Superficie de : 56 305,1 mètres carrés.

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Le tout tel que montré par un liséré rouge sur le plan préparé par Pierre Roy, arpenteur-géomètre, le 13 octobre 2000, sous le numéro 50408 de ses dossiers et sous le numéro 3488 de ses minutes

Terrebonne Property

Un immeuble situé en la Ville de Blainville, connu et désigné comme étant le lot un million neuf cent sept mille sept cent soixante-sept (1 907 767) du Cadastre du Québec, circonscription foncière de Terrebonne.

With all the buildings thereon erected, and as the said properties now subsist with all its rights, members and appurtenances, without exception or reserve of any kind and together with and subject to all servitudes, continued or discontinued, apparent or non apparent, attached thereto.

Servitudes

All of the Borrower’s rights, title and interest in, to and pursuant to the following servitudes affecting the immovable properties described hereunder:

Sainte-Agathe-des-Monts Servitude

Une servitude de droit de passage pour le bénéfice de la tour, des constructions et ouvrages appartenant à Microcell Connexions Inc., identifiés comme étant le Fonds Dominant, sur la lisière ci-après désignée, étant le Fonds Servant, à savoir :

Fonds Servant

(a)	Le lot quarante-deux de la subdivision officielle du lot originaire quatre (4-42), Rang 3, Canton de Beresford, cadastre officiel de la Paroisse de Sainte-Agathe-des-Monts, circonscription foncière de Terrebonne, (ledit lot connu comme étant la rue Panorama);
(b)	Une partie du lot cent quarante-quatre de la subdivision officielle du lot originaire quatre (4-144) Rang 3, Canton Beresford, dudit cadastre, décrite comme suit :
	De figure trapézoïdale, indiquée par les nombres 1, 2, 3 et 4 sur le plan préparé par François Houle, arpenteur-géomètre, le 25 octobre 2000, sous le numéro 2655 de ses minutes, commençant au point « 1 » étant situé au coin sud-est du lot 4-144 du Rang III du Canton de Beresford, ladite parcelle est bornée et décrite comme suit :

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- -	vers le sud-ouest, la ligne 1-2, par le lot 4-145 et mesurant le long de cette limite quarante-quatre mètres et trois centièmes (44,03m) suivant une ligne ayant un gisement de 298°21’23’’.
- -	vers le nord-ouest, la ligne 2-3, par une partie du lot 5A et mesurant le long de cette limite quatre mètres et soixante-neuf centièmes (4,69m) suivant une ligne ayant un gisement de 15°25’26’’.
- -	vers le nord-est, la ligne 3-4, par le résidu du lot 4-144 et mesurant le long de cette limite quarante-trois mètres et quatre-vingt-douze centièmes (43,92m) suivant une ligne ayant un gisement de 118°21’23’’.
- -	vers le sud-est, la ligne 4-1, par le lot 4-42 (rue Panorama) et mesurant le long d’un arc quatre mètres et soixante-treize centièmes (a :4,73m) ayant un rayon de vingt mètres (r :20,00m).

Superficie : 200,5 mètres carrés.

Fonds Dominant

La tour, les constructions et ouvrages sont érigés sur l’emplacement suivant :

(a)	Une partie du lot cinq a (Ptie 5A), Rang 3, Canton Beresford, cadastre officiel de la Paroisse de Sainte-Agathe-des-Monts, circonscription foncière de Terrebonne, décrite comme suit :
	De figure irrégulière, indiquée par les nombres 2, 5, 6, 7, 8 et 3 sur ledit plan, commençant au point « 2 » étant situé au coin sud-ouest du lot 4-144 du Rang III du Canton de Beresford, ladite parcelle est bornée et décrite comme suit :
- -	vers le sud-ouest, la ligne 2-5 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite huit mètres et cinq centièmes (8,05m) suivant une ligne ayant un gisement de 298°21’23’’.
- -	vers l’ouest, la ligne 5-6 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite cent trente-cinq mètres et cinq centièmes (135,05m) suivant une ligne ayant un gisement de 0°04’07’’.
- -	vers le Nord, la ligne 6-7 sur ledit plan, par une autre partie du lot 5A décrite plus bas, et mesurant le long de cette limite quatre mètres et soixante centièmes (4,60m) suivant une ligne ayant un gisement de 96°19’15’’.
- -	vers l’est, la ligne 7-8 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite cent trente et un mètres et quatre-vingt-deux centièmes (131,82m) suivant une ligne ayant un gisement de 180°04’07’’.

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- -	vers le nord-est, la ligne 8-3 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite quatre mètres et vingt-sept centièmes (4,27m) suivant une ligne ayant un gisement de 118°21’23’’.
- -	vers le sud-est, la ligne 3-2 sur ledit plan, par le résidu du lot 4-144 et mesurant le long de cette limite quatre mètres et soixante-neuf centièmes (4,69m) suivant une ligne ayant un gisement de 195°25’26’’.

Superficie : 638,0 mètres carrés.

(b)	Une partie du lot cinq a (Ptie 5A), Rang 3, Canton de Beresford, dudit cadastre, décrite comme suit :
	De figure carrée, indiquée par les nombres 6, 9, 10 et 11 sur ledit plan, commençant au point « 6 », rattaché précédemment, ladite parcelle est bornée comme suit :
- -	vers l’est, la ligne 6-9 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant un ligne ayant un gisement de 6°19’15’’.
- -	vers le nord, la ligne 9-10 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 96°19’15’’.
- -	vers l’est, la ligne 10-11 sur ledit plan, par une partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 186°19’15’’.
- -	vers le sud, la ligne 11-6 sur ledit plan, par une autre partie du lot 5A et mesurant le long de cette limite six mètres et dix-huit centièmes (6,18m) suivant une ligne ayant un gisement de 276°19’15’’.

Superficie : 8,2 mètres carrés.»

Pursuant to a Deed of Right of Way entered into between Chalets Chanteclair Inc. and Microcell Connexions Inc., which right of way is registered on November 29, 2000 at the Land Registration Division of Terrebonne under number 1244541.

Lévis Servitude

Une servitude de droit de passage pour le bénéfice de la tour, des constructions et ouvrages appartenant à Microcell Connexions Inc., identifiés comme étant le Fonds Dominant, sur la lisière ci-après désignée, étant le Fonds Servant, à savoir :

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Fonds Servant

(a)	Une partie du lot QUARANTE-trois (Ptie 43) du cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon, circonscription foncière de Lévis, désignée comme suit :
	De figure irrégulière, indiquée par les nombres 1 à 6 du plan préparé par François Houle, arpenteur-géomètre, le 1er mai 2001, sous le numéro 3138 de ses minutes, commençant au point « 1 » étant l’intersection entre la ligne séparative des lots 42 et 43 avec la limite SUD-EST de l’emprise du Chemin Sainte-Anne Est (une partie du lot 43), ladite parcelle est bornée et décrite comme suit :
- -	vers le NORD-EST, par une partie du lot 42, dans une première ligne 1-2, et mesurant le long de cette limite quatre-vingt-quatre mètres et quatre-vingt-deux centièmes (84,82m) suivant une ligne ayant un gisement de 134°57’29’’; dans une deuxième ligne 2-3, et mesurant le long de cette limite deux cent quarante-huit mètres et vingt et un centièmes (248,21m) suivant une ligne ayant un gisement de 133°48’58’’.
- -	vers le sud-est, la ligne 3-4, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 228°48’58’’.
- -	vers le sud-ouest, par une autre partie du lot 43, dans une première ligne 4-5, et mesurant le long de cette limite deux cent quarante-sept mètres et quarante-quatre centièmes (247,44m) suivant une ligne ayant un gisement de 313°48’58’’; dans une deuxième ligne 5-6, et mesurant le long de cette limite soixante-dix-huit mètres et quatre-vingt-sept centièmes (78,87m) suivant une ligne ayant un gisement de 314°57’29’’.
- -	vers le Nord-ouest, la ligne 6-1, par une autre partie du lot 43, étant le Chemin Sainte-Anne Est et mesurant le long de cette limite onze mètres et soixante-neuf centièmes (11,69m) suivant une ligne ayant un gisement de 13°46’34’’.

Superficie : 3 296,7 mètres carrés

(b)	Une partie du lot QUARANTE-TROIS (Ptie 43) dudit cadastre, désignée comme suit :
	De figure parallélogrammique, indiquée par les nombres 3, 4, 7 et 8 sur ledit plan, commençant au point « 3 » précédemment rattaché, ladite parcelle est bornée et décrite comme suit :
- -	vers le nord-est, la ligne 3-7, par une partie du lot 42 décrite plus bas, et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 133°48’58’’.

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- -	vers le sud-est, la ligne 7-8, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 228°48’58’’.
- -	vers le sud-ouest, la ligne 8-4, par une autre partie du lot 43 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 313°48’58’’.
- -	vers le nord-ouest, la ligne 4-3, par une autre partie du lot 43, décrite précédemment, et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 48°48’58’’.

Superficie : 100,4 mètres carrés.

Fonds Dominant

La tour, les constructions et ouvrages sont érigés sur l’emplacement suivant :

(a)	Une partie du lot quarante-deux (Ptie 42) du cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon, circonscription foncière de Lévis, désignée comme suit :
	De figure carrée, indiquée par les nombres 11, 12, 14 et 15 sur ledit plan, commençant au point « 11 » ci-après rattaché, ladite parcelle est bornée et décrite comme suit :
- -	vers le NORD-OUEST, la ligne 11-14, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 49°43’36’’.
- -	vers le Nord-est, la ligne 14-15, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 139°43’36’’.
- -	vers le sud-est, la ligne 15-12, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 229°43’36’’.
- -	vers le sud-ouest, la ligne 12-11, par une autre partie du lot 42, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 319°43’36’’.

Superficie : 48,4 mètres carrés.

(b) Une partie du lot QUARANTE-DEUX (Ptie 42) dudit cadastre, désignée comme suit :

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	De figure irrégulière, indiquée par les nombres 3, 9, 10, 11, 12 et 13 sur ledit plan, commençant au point « 3 », ci-après rattaché, ladite parcelle est bornée et décrite comme suit :
- -	vers le nord-ouest, la ligne 3-9, par une autre partie du lot 42 et mesurant le long de cette limite dix mètres et quatre centièmes (10,04m) suivant une ligne ayant un gisement de 48°48’58’’.
- -	vers le nord-est, la ligne 9-10, par une autre partie du lot 42 et mesurant le long de cette limite cent seize mètres et quatre-vingt-six centièmes (116,86m) suivant une ligne ayant un gisement de 133°48’58’’.
- -	vers le nord-ouest, la ligne 10-11, par une autre partie du lot 42 et mesurant le long de cette limite cinquante mètres et soixante-douze centièmes (50,72m) suivant une ligne ayant un gisement de 49°43’36’’.
- -	vers le nord-est, la ligne 11-12, par une autre partie du lot 42, décrite plus haut, et mesurant le long de cette limite six mètres et quatre-vingt-seize centièmes (6,96m) suivant une ligne ayant un gisement de 139°43’36’’.
- -	vers le sud-est, la ligne 12-12, par une autre partie du lot 42, et mesurant le long de cette limite soixante mètres et six centièmes (60,06m) suivant une ligne ayant un gisement de 229°43’36’’.
- -	vers le sud-ouest, la ligne 13-3, par une partie du lot 43, et mesurant le long de cette limite cent-vingt-trois mètres et soixante-dix centièmes (123,70m) suivant une ligne ayant un gisement de 313°48’58’’.

Superficie : 1 588,3 mètres carrés.»

Pursuant to a Deed of Right of Way entered into between Mr. Roch Desrochers and Microcell Connexions Inc., which right of way is registered on July 11, 2001 at the Land Registration Division of Levis under number 452431.

2.     Office and Switchroom Leases

(a) Office space situated on the 4th, 9th, 10th and 11th Floors at the building located at 1250 Rene Levesque Boulevard West, Montreal, Quebec, containing an area of approximately 124,500 square feet pursuant to a Sublease Agreement between IBM Canada Limited as Sublessor, Societe en Commandite Douze-Cinquante/Twelve-Fifty Company Limited, as Lessor and Microcell 1-2-1 Inc. (now known as Microcell Telecommunications Inc.) as Subtenant dated as of the 3rd day of February, 1995 as amended by an Amendment to Sublease dated March 28, 1996 and by a Second Amendment to Sublease dated November 22, 1996. The 11^th and 9^th floor has been sub-leased to Cap Gemini Ernst & Young starting January 1, 2003 and March 1, 2003 respectively. (A portion

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	of the 10th floor representing half of the floor will also be sub-leased by Cap Gemini at a later date).
(b)	Office space situated on the 20th and 21st floors of the building located at 1250 René-Lévesque Boulevard West, Montreal, Quebec, containing an area of approximately 47,403 square feet pursuant to a Sublease Agreement between Bowater Pulp & Paper (Canada) Inc. as Sublessor, and Parent as Subtenant dated as of the 17th day of December 1998. The 20th floor has been sub-leased to PSP starting December 1, 2002.
(c)	Office space situated on Level A and part of Level B & C at the building located at 800 de la Gauchetière West, Montreal, Quebec, containing an area of approximately 317,000 square feet pursuant to an Offer to Lease entered into between Place Bonaventure Inc. (now known as WPBI Property Management Inc.), as Lessor and Parent, as Tenant dated as of July 14th 1998, as amended by Amendments to Lease dated March 22, 1999, October 1, 2000 and June 15, 2001. A portion of level C representing 12,796 square feet has been canceled, without penalty, on July 1, 2002. The rest of Level C which represents 42,204 square feet is under negotiation for a sub-lease by January 1, 2003;
(d)	Office space situated on the 17th Floor of the building located at 20 Bay Street, Toronto, Ontario containing an area of approximately 21,350 square feet pursuant to a Lease with Omers Realty Co. made as of February 1, 1996 as amended by Lease Amending Agreements made as of May 1, 1997, May 26, 1997 and June 1, 1997.
(e)	Office space situated on the 5th and 8th Floors of the building located at 815 West Hastings Street, Vancouver, British Columbia, containing an area of approximately 14,000 square feet, pursuant to a Lease entered into between Investors Group Trust Co. Ltd. and Parent as of March 22, 1996. Since June 14, 2002 the office space has been reduced to 12,437 square feet and renewed until June 14, 2005.
(f)	Office space situated on the 20th floor of the building located at 500 – 4th Avenue S.W., Calgary, Alberta, containing an area of approximately 10,253 square feet, pursuant to a Lease entered into between O&Y Properties Inc. and Grosvenor Canada Limited and Parent as of February 7, 2001. This office space has been sub-leased to Integrated Data Corporation starting July 1, 2003.
(g)	Office space situated at 891 Charest blvd, suite 201, Quebec, Quebec, containing an area of approximately 3,875 square feet, pursuant to a Lease entered into between Téléimmeuble Inc. and Parent as of January 2000;
(h)	Switch Room and computer room space situated on the 5th Floor of the building located at 1250 Rene Levesque Boulevard West, Montreal, Quebec containing an area of approximately 8,642 square feet, pursuant to a Sublease dated as of February 3, 1995 between IBM Canada Limited as Sublessor, Societe en

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	Commandite Douze-Cinquante/Twelve-Fifty Company Limited as Lessor and Microcell 1-2-1 Inc. (now known as Microcell Telecommunications Inc.) as Subtenant which Sublease Agreement was assigned as of March 31, 1996 and amended by an Amendment to Sublease dated April 19, 1996 and by an Second Amendment to sublease dated October 9, 2002;
(i)	Switch Room space situated on part of the 2nd Floor of the building located at 10 Bay Street, Toronto, Ontario, containing an area of approximately 8,663 square feet, pursuant to a Lease entered into between Omers Realty Co. and Microcell Telecommunications Inc. dated February 1, 1996 which Lease was assigned to Borrower as of March 31, 1996 and amended by a Lease Amending Agreement to the Lease effective July 1, 1997;
(j)	Switch Room space situated on the 3rd Floor of the building located at 815 West Hastings Street, Vancouver, British Columbia, containing an area of approximately 4,788 square feet, pursuant to a Lease entered into between Investors Group Trust Co. Ltd. and Microcell Telecommunications Inc. dated March 22, 1996 which Lease was assigned to Borrower as of March 31, 1996;
(k)	Switch Room space situated on part of the 5th Floor of the building located at 630 Third Avenue South West, Calgary, Alberta, containing an area of approximately 6,280 square feet, pursuant to an Offer to Lease entered into between Shaw Communications Inc. and Borrower dated August 8, 1997;
(l)	Switch Room space situated on Level A of the building located at 800 de la Gauchetière West, Montreal, Quebec, containing an area of approximately 15,594 square feet, pursuant to a Lease Agreement dated March 16th, 1999 and August 1, 2001 between WPBI Property Management Inc. and Borrower;
(m)	Switch Room space situated on the 5th floor of the building located at 2 Robert - Specks Park Way, Mississauga, Ontario, containing an area of approximately 10,627 square feet, pursuant to a Lease Agreement dated November 1, 2000 between Clarica Life Insurance Company and Canadian Partners Fund Inc. (as Lessor) and Borrower; and
(n)	Switch Room space situated on the 1st floor of the building located at 555 sixth street, NewWestminster, British Columbia, containing an area of approximately 10,644 square feet, pursuant to a Lease Agreement dated as of November 22, 2000 between Canacemal Investment Inc. and Borrower.

Compliance with Laws and Agreements (3.6) and Defaults (3.12)

1.     Defaults under the Credit Agreement and the Notes (as these terms are defined in the Plan of Arrangement); on the Effective Date of the Plan of Arrangement these defaults will be cured pursuant to section 6.18 of the Plan of Arrangement.

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Subsidiaries (3.14)

1.	2861399 Canada Inc. (Pre-Filing Parent and wholly-owned subsidiary of Microcell Telecommunications Inc.)
2.	Inukshuk Internet Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)
3.	Telcom Investments Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)

Material Contracts (3.16)

1.	Tranche A Exit Facility Agreement.
2.	Tranche C Credit Agreement.

Environmental Matters (3.17)

1. None

Employee Matters (3.18)

1.	Employment Agreement with Alain Rhéaume, President and Chief Operating Officer of the Borrower, providing for an indemnity of 24 months in the event of dismissal without reasonable cause.
2.	Employment Agreement with André Tremblay, President and Chief Executive Officer of Parent, providing for an indemnity of 24 months in the event of dismissal without reasonable cause.
3.	Employment Agreement with Jacques Leduc, Chief Financial Officer and Treasurer of Parent, providing for an indemnity of 24 months in the event of dismissal without reasonable cause before September 30, 2004.
4.	Retention program for key employees disclosed in Appendix G of the Information Circular.

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Intellectual Property Rights (3.20)

1.      Registered Trade Marks:

(a)	FIDO registered by Borrower on April 28, 1997, registration no. TMA475,321;
(b)	FIDO registered in the United Sates by Borrower on December 11, 2001, registration no. 2,517,638;
(b)	FIDO & DESIGN registered by Borrower on February 2, 1998, registration no. TMA489,000;
(c)	FIDO & DESIGN registered in the United States by Borrower on April 16, 2002, registration no. 2,560,921;
(c)	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on February 21, 2001, registration no. TMA541,416;
(b)	FIDOMATIC registered by Borrower on June 11, 2001, registration no. TMA546,433;
(c)	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on April 19, 2002, registration no. TMA560,471;
(d)	FIDOMATIC & DESIGN registered by Borrower on June 12, 2001, registration no. TMA546,451;
(e)	FIDOMATIC & DESIGN registered in the United States by Borrower on December 17, 2002, registration no. 2 661 037
(f)	FIDO C’EST VOUS LE MAÎTRE & DESIGN registered by Borrower on March 13, 2001, registration no. TMA542,267;
(g)	FIDO YOU ARE THE MASTER & DESIGN registered by Borrower on March 13, 2001, registration no. TMA542,265;
(h)	FIDO & DESIGN registered by Borrower on February 26, 2001, registration number TMA541,562;
(i)	FIDOPRO registered by Borrower on February 27, 2001, registration no. TMA541,653;
(j)	INSTANT REPLY registered by Borrower on June 11, 2001, registration no. TMA546,429;

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(k)	RÉPONSE ÉCLAIR registered by Borrower on June 11, 2001, registration no. TMA546,430;
(l)	LA MESSAGERIE VOCALE PERFORMANCE registered by Borrower on June 12, 2001, registration no. TMA546,480;
(m)	FIDO E-MAIL registered by Borrower on June 12, 2001, registration no. TMA546,477;
(n)	COURRIEL FIDO registered by Borrower on June 12, 2001, registration no. TMA546,478;
(o)	FIDODATA registered by Borrower on February 21, 2001, registration no. TMA541,437;
(p)	PERFORMANCE VOICE MESSAGING registered by Borrower on June 12, 2001, registration no. TMA546,454;
(q)	MICROCELL registered by Pre-Filing Parent on March 30, 1999, registration no. TMA510,356;
(r)	MICROCELL SOLUTIONS & DESIGN registered by Pre-Filing Parent on September 9, 1999, registration no. TMA516,140;
(s)	MICROCELL CAPITAL & DESIGN registered by Pre-Filing Parent on September 30, 1998, registration no. TMA501,581;
(t)	MICROCELL CONNEXIONS & DESIGN registered by Pre-Filing Parent on March 29, 1999, registration no. TMA510,183;
(u)	MICROCELL LABS & DESIGN registered by Pre-Filing Parent on September 30, 1998, registration no. TMA501,578;
(v)	FIDO registered by Borrower on February 20, 2003 under no. TMA576,104;
(w)	i.FIDO registered by Borrower on March 25, 2003 under no. TMA578,101;
(x)	POPFONE registered by Pre-Filing Parent on July 8, 1994 under no. TMA430,217;
(y)	POPFONE DESIGN registered by Pre-Filing Parent on June 10, 1994 under no. TMA428,627.

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2.      Trade Mark Applications:

(a)	ACCÈS FINANCES application filed by Borrower on March 9, 2000 under no. 1,050,426;
(b)	ACCESS FINANCES application filed by Borrower on March 9, 2000 under no. 1,050,425;
(c)	SERVICES I.FIDO
	I.FIDO SERVICES application filed by Borrower on October 5, 2000 under no. 1,077,633;
(d)	FIDO M@GAZINE application filed by Borrower on March 6, 2001 under no. 1,095,074;
(e)	MICROCELL SCP application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,248;
(f)	MICROCELL PCS application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,245;
(g)	MICROCELL SCP & DESIGN application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,246 and;
(h)	MICROCELL PCS & DESIGN application filed by Pre-Filing Parent on July 20, 2001 under no. 1,110,247;

3.      Patent Application:

(a)      METHOD AND SYSTEM FOR EFFECTING AN ELECTRONIC TRANSACTION

•    Nature of interest (owner, licensee, other): Owner

•    Date of Application: April 4, 2002, claiming priority of a provisional application filed April 4, 2001.

•    Country of Application: United States (“US”) and Patent Cooperation Treaty, designating all countries except the US (“PCT”), respectively under no. 10/117,623      and no. PCT/CA02/00473.

Please note that both the PCT and the US applications are currently in the name of Microcell i5 inc.

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Indebtedness for Borrowed Money (3.23, 4.1(m), 6.1(d))

1.	Tranche A Exit Facility Agreement.
2.	Tranche C Credit Agreement.
3.	First Preferred Shares.
4.	Second Preferred Shares.
5.	First Notes (if issued).
6.	Second Notes (if issued).

Permits, Licences; Authorizations (3.24)

1. Special authorization to provide Personal Communications Services (PCS) pursuant to s. 5(1)(v) of the Radiocommunication Act issued by Industry Canada on April 15, 1996 and renewed on March 29, 2001 in favour of the Borrower (formerly Microcell Connexions Inc.) together with license conditions for Personal Communications Service (PCS) licensees accepted by the Borrower on April 25, 1996 and on March 29, 2001.

Executive Office; Location of Records (5.1(xxvi))

1.	Jurisdictions in which tangible assets are located:
	Parent: Quebec Ontario Alberta British Columbia
	Borrower: Quebec Ontario Alberta British Columbia Saskatchewan Manitoba Nova Scotia Newfoundland

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2.	Jurisdictions in which aggregate accounts receivable exceeding $50,000 per year are generated:
	Parent: Quebec
	Borrower: Quebec Ontario Alberta Saskatchewan Manitoba British Columbia
3.	Locations of Chief Executive Offices:
	Borrower, Pre-Filing Parent and Parent:
	800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec
4.	Locations of Registered Office:
	Borrower, Pre-Filing Parent and Parent:
	1250 René-Lévesque blvd. West, 38th floor, Montreal, Quebec

Liens (6.2)

1.	Act of Movable Hypothec on a commercial paper of $3,000,000 dated May 28, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
2.	Act of Movable Hypothec on a commercial paper of $1,000,000 dated October 17, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
3.	Act of Movable Hypothec on a commercial paper of $337,000 dated October 23, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.

The Pre-Filing Parent and the Borrower have also entered into a number of commercial leases for various automobile vehicles and office equipment. These leases are true leases as opposed to capital leases. Therefore the vehicles and equipment leased do not form part of the Pre-Filing Parent or the Borrower property and assets and are not capitalized in their balance sheet. The following is a summary description of these leases.

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4.     Commercial Lease Agreements with Location Fortier Inc. and Deragon Leasing Inc. concerning 78 vehicles for two, three and four year terms.

5.     Commercial Lease Agreements with IBM Canada Ltd., CIT Financial services, Pitney Bowes Leasing a division of Pitney Bowes Canada Ltd., Minolta (Montreal) Inc. and Contract Funding Group and Panasonic concerning office photocopiers and fax.

6.     Commercial lease Agreements with various automobile leasing companies concerning 44 vehicles used by employees as part of their employee benefits.

Existing Investments (6.4)

1.	Long term investments (Shares or Units)
	Canadian LNP Consortium Inc. (owned by Borrower)
	Canadian Numbering Administration Consortium Inc. (owned by Borrower)
	Canadian Portable Contribution Consortium Inc. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Borrower and Pre-Filing Parent)
	Telcom Investments Inc. (owned by Borrower)
	Saraide, Inc. (owned by Borrower)
	Argo II - The Wireless Internet Fund Limited Partnership (owned by Borrower)
	Oz Communications, Inc. (owned by Borrower)
	GSM Capital Limited Partnership (owned by Borrower and Pre-Filing Parent)
2.	Other short term instruments in the form of marketable securities, which constitute Permitted Investments, are contained in the investments accounts of the Borrower, the Parent and the Pre-Filing Parent.

Restrictive Agreements (6.9)

1.	Tranche A Exit Facility Agreement.
2.	Tranche C Credit Agreement.

EXHIBIT A

FORM OF
ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Credit Agreement (including any letters of credit and guarantees included in such Credit Agreement) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate of [identify Lender]]
3.	Borrower:	Microcell Solutions Inc.
4.	Administrative Agent:	JPMorgan Chase Bank, Toronto Branch, as the administrative agent under the Credit Agreement
5.	Credit Agreement:	The Cdn.$300,000,000 Credit Agreement dated as of May 1, 2003 among Microcell Solutions Inc., as Borrower, Microcell

2

Telecommunications Inc., as Parent, the Lenders parties thereto, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent and Collateral Agent.

6. Assigned Interest:

Aggregate Amount of		Amount of Loans		Percentage Assigned
Loans for all Lenders		Assigned		of Loans1
	$		$		%

Effective Date:      , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:

Title:

¹ Set forth, to at least 9 decimals, as a percentage of the Loans of all Lenders thereunder.

2

3

Consented to and Accepted:²

JPMORGAN CHASE BANK, TORONTO BRANCH, as
   Administrative Agent and Issuing Bank

By

Title:

Consented to:³

MICROCELL SOLUTIONS INC.

By

Title:

² Not required with respect to any assignment to a Lender or an Affiliate of a Lender.

³  Not required at any time after and during the occurrence of an Event of Default. Not required with respect to any assignment to a Lender or a Lender Affiliate.

3

ANNEX 1

MICROCELL TRANCHE B CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby, including the payment to the Administrative Agent of a processing and recordation fee of Cdn.$5,000, pursuant to Section 9.4(b) of the Credit Agreement (except in the case of an assignment to an Affiliate of the Assignor); and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Financing Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Financing Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Financing Document.

          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Financing Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Documents are required to be performed by it as a Lender.

2

          2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrued subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for the periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

          3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

2

EXHIBIT B

FORM OF INTERCREDITOR AGREEMENT

EXHIBIT C

NOTICE OF CONTINUATION/CONVERSION

TO:	JPMORGAN CHASE BANK, TORONTO BRANCH
RE:	Tranche B Credit Agreement dated as of May 1, 2003 made between, among others, the undersigned (the “Borrower”), you, as Administrative Agent, and the lenders from time to time party thereto (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”)

               We refer to the [B/A Loan / Prime Rate Loan / Base Rate Loan / Eurodollar Loan] in the principal amount of [Canadian][U.S.]$     , [with a Contract Period / Interest Period expiring on [date]],(1) and we hereby give you notice that we wish to [continue / convert] such Loan on [insert date].

          The [continued/converted] Loan is hereby requested to take the form of:

          [     ]      a B/A Loan²

          [     ]      a Prime Rate Loan³

          [     ]      a Base Rate Loan⁴

          [     ]      a Eurodollar Loan⁵

          The Contract Period in respect of the B/A Loan requested hereby is      days.⁶

          The Interest Period in respect of the Eurodollar Loan requested hereby is      days.⁷

          All terms defined in the Credit Agreement and used herein have the meanings given to them by the Credit Agreement.

          DATED:                                         

¹  Only required for B/A Loans or Eurodollar Loans to be continued or converted.

²  May only be converted/continued from a Prime Rate Loan or a maturing B/A Loan, and must conform to Minimum Denominations pursuant to Section 2.2 of the Credit Agreement. At least three days prior notice is required for any continuation/conversions into B/A Loans.

³  May only be converted from a maturing B/A Loan.

⁴  May only be converted from a maturing Eurodollar Loan.

⁵  May only be converted/continued from a Base Rate Loan or a maturing Eurodollar Loan, and must conform to Minimum Denominations pursuant to Section 2.2 of the Credit Agreement. At least three days prior notice is required for any continuation/conversions into Eurodollar Loans.

⁶  This sentence is only required in the context of a continuation/conversion into a B/A Loan

²  This sentence is only required in the context of a continuation/conversion into a Eurodollar Loan

2

MICROCELL SOLUTIONS INC.

By:

Name:

Title:

By:

Name:

Title:

2

TRANCHE “B” CREDIT AGREEMENT

dated as of

May 1, 2003

among

MICROCELL SOLUTIONS INC.

as Borrower,

MICROCELL TELECOMMUNICATIONS INC.

as Parent and Guarantor,

THE LENDERS FROM TIME TO TIME PARTIES HERETO

as Lenders

and

JPMORGAN CHASE BANK TORONTO BRANCH

as Administrative Agent and Collateral Agent

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS		2
1.1	Defined Terms		2
1.2	Terms Generally		23
1.3	Accounting Terms; GAAP		24
1.4	Time		24
1.5	Permitted Liens		24
1.6	Schedules and Exhibits		24
ARTICLE 2	LOANS		26
2.1	Loans		26
2.2	Continuation, Conversion and Roll-Over Elections		26
2.3	Interest and Acceptance Fees		28
2.4	Repayment of Loans		29
2.5	Evidence of Debt		30
2.6	Prepayments of Loans; Payments Pursuant to Other New Instruments		31
2.7	B/A Loans		32
2.8	Alternate Rate of Interest		32
2.9	Increased Costs; Illegality		33
2.10	Break Funding Payments		34
2.11	Taxes		35
2.12	Payments Generally; Pro Rata Treatment; Sharing of Set-offs		36
2.13	Currency Indemnity		37
2.14	Mitigation Obligations; Replacement of Lenders		38
2.15	Indemnity for Returned Payments		39
2.16	Existing Security		39
ARTICLE 3	REPRESENTATIONS AND WARRANTIES		39
3.1	Organization; Powers		39
3.2	Authorization; Enforceability		40
3.3	Governmental Approvals; No Conflicts		40
3.4	Financial Condition; No Material Adverse Effect		40
3.5	Litigation		40

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TABLE OF CONTENTS
(Continued)

		Page
3.6	Compliance with Laws and Agreements		41
3.7	Taxes		41
3.8	Titles to Real Property		41
3.9	Titles to Personal Property		41
3.10	Pension Plans		41
3.11	Disclosure		41
3.12	Defaults		42
3.13	Casualties; Taking of Properties		42
3.14	Subsidiaries		42
3.15	Insurance		42
3.16	Material Contracts		42
3.17	Environmental Matters		43
3.18	Employee Matters		44
3.19	Fiscal Year		44
3.20	Intellectual Property Rights		44
3.21	Investment and Holding Company Status		45
3.22	PCS Network Ownership		45
3.23	No Indebtedness for Borrowed Money		45
3.24	Permits, Licences, etc.		45
3.25	Security Interests		45
3.26	Regulatory Compliance		46
3.27	Budget Update		46
ARTICLE 4	CONDITIONS		47
4.1	Conditions Precedent to Effectiveness of Agreement		47
ARTICLE 5	AFFIRMATIVE COVENANTS		50
5.1	Financial Statements and Other Information		50
5.2	Existence; Conduct of Business		56
5.3	Payment of Obligations		56
5.4	Maintenance of Properties		56
5.5	Maintenance of Authorizations		57

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TABLE OF CONTENTS
(Continued)

		Page
5.6	Books and Records; Inspection Rights		57
5.7	Compliance with Laws and Material Contracts		57
5.8	Intentionally Deleted		57
5.9	Further Assurances		57
5.10	Insurance		58
5.11	Operation and Maintenance of Property		58
5.12	Additional Subsidiaries; Additional Liens		58
5.13	Hedging Arrangements		58
5.14	Financial Covenants		59
5.15	Most Favoured Nations		63
5.16	Landlord Consents		63
5.17	Bank Accounts		63
ARTICLE 6	NEGATIVE COVENANTS		64
6.1	Indebtedness		64
6.2	Liens		65
6.3	Fundamental Changes		65
6.4	Investments, Loans, Advances, and Guarantees		65
6.5	Hedging Agreements		66
6.6	Restricted Payments		66
6.7	Transactions with Affiliates		67
6.8	Repayment of Debt		67
6.9	Restrictive Agreements		68
6.10	Capital Lease Obligations		68
6.11	Sales and Leasebacks		68
6.12	Pension Plan Compliance		68
6.13	Sale or Discount of Receivables		69
6.14	Unconditional Purchase Obligations		69
6.15	Ownership of Shares		69
6.16	No Amendments to Material Contracts		69
ARTICLE 7	EVENTS OF DEFAULT		69

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TABLE OF CONTENTS
(Continued)

		Page
7.1	Events of Default		69
ARTICLE 8	THE ADMINISTRATIVE AGENT		74
8.1	Appointment of Agent		74
8.2	Limitation of Duties of Agent		74
8.3	Lack of Reliance on the Agent		75
8.4	Certain Rights of the Administrative Agent		75
8.5	Reliance by Administrative Agent		75
8.6	Indemnification of Agent		76
8.7	The Agent in its Individual Capacities		76
8.8	May Treat Lender as Owner		76
8.9	Successor Administrative Agent		76
8.10	Lenders to Enforce through Administrative Agent		77
8.11	Quebec Security		78
ARTICLE 9	MISCELLANEOUS		78
9.1	Notices		78
9.2	Waivers; Amendments		79
9.3	Expenses; Indemnity; Damage Waiver		81
9.4	Successors and Assigns		83
9.5	Survival		86
9.6	Counterparts; Integration; Effectiveness		86
9.7	Severability		87
9.8	Right of Set Off		87
9.9	Governing Law; Jurisdiction; Consent to Service of Process		87
9.10	WAIVER OF JURY TRIAL		88
9.11	Headings		88
9.12	Confidentiality		88

-iv- EX-4.3 12 m10142orexv4w3.htm EX-4.3

Exhibit 4.3

TRANCHE C CREDIT AGREEMENT

          THIS TRANCHE C CREDIT AGREEMENT (this “Agreement”) dated as of May 1, 2003 is entered into among Microcell Telecommunications Inc., as Parent, Microcell Solutions Inc., as Borrower, the financial institutions from time to time parties hereto as Lenders, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent and Collateral Agent. Reference is made to the Introductory Statements below and Section 1.1 hereof for the definition of certain capitalized terms used herein.

INTRODUCTORY STATEMENTS:

A.     Pursuant to that certain Amended and Restated Credit Agreement, dated as of May 7, 1999 (as amended, supplemented or otherwise modified or restated from time to time, the “Pre-Filing Credit Agreement”), among Microcell Connexions Inc. and Microcell Solutions Inc. (collectively, the “Pre-Filing Borrowers”), Microcell Telecommunications Inc. (the “Pre-Filing Parent”), the lenders from time to time party thereto (collectively, the “Pre-Filing Lenders”), J.P. Morgan Bank Canada, as administrative agent and collateral agent for the Pre-Filing Lenders, and National Bank of Canada, as letter of credit issuing bank, the Pre-Filing Lenders made loans and advances to, issued letters of credit for and/or provided other financial accommodations to, or on behalf of, the Pre-Filing Borrowers (collectively, the “Pre-Filing Loans”);

B.     The Pre-Filing Loans and other obligations of the Pre-Filing Borrowers under the Pre-Filing Credit Agreement and the guarantors in respect thereof, together with certain obligations under certain terminated hedging arrangements with J.P. Morgan Bank Canada as a successor in interest to ABN-AMRO Bank Canada and Canadian Imperial Bank of Commerce (collectively, the “Pre-Filing Hedging Obligations”), are secured by valid, binding, enforceable and perfected liens, security interests and hypothecs in substantially all the assets of the Pre-Filing Borrowers, the Pre-Filing Parent and such guarantors thereof;

C.     On January 3, 2003, the Pre-Filing Parent, the Pre-Filing Borrowers, and certain other direct or indirect subsidiaries of the Pre-Filing Parent commenced proceedings under the Companies Creditors Arrangement Act (the “CCAA”) and the Canada Business Corporations Act (the “CBCA”); a plan of reorganization and of compromise and arrangement (as such plan of reorganization and of compromise and arrangement may be amended, modified or supplemented in accordance with its terms, the “Plan of Arrangement”) was filed with the Court on February 20, 2003;

D.     The Plan of Arrangement was sanctioned and approved by the Court on March 18, 2003;

E.     Pursuant to the Plan of Arrangement, the obligations under the Pre-Filing Credit Agreement and the Pre-Filing Hedging Obligations (collectively, “Pre-Filing Secured Claims”) are to be restructured;

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F.     Pursuant to the Plan of Arrangement and the Sanction Order, through a series of transactions, the Pre-Filing Borrowers and the Pre-Filing Parent are completing a corporate reorganization, with the result that the obligations of the Pre-Filing Borrowers and the Pre-Filing Parent have become the obligations of the Borrower and the Parent, respectively;

G.     Pursuant to the Plan of Arrangement, $50,000,000 of the Pre-Filing Secured Claims will be restated in the form of secured Loans to the Borrower, as provided hereby, and the Parent and certain subsidiaries of the Borrower and the Parent shall irrevocably and unconditionally guarantee such secured loan obligations.

          NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the Lenders, the Administrative Agent, the Parent and the Borrower hereby agree as follows.

ARTICLE 1
DEFINITIONS

1.1     Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

     “Additional Subsidiary” is defined in Section 5.6.

     “Administrative Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as administrative agent for the Lenders hereunder, or any successor Administrative Agent appointed pursuant to Section 8.9.

     “Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, such Person.

     “Agents” means the Administrative Agent and the Collateral Agent.

     “Applicable Percentage” means, with respect to any Lender, the percentage of the total Loans represented by such Lender’s Loans, as listed in Schedule A.

     “Asset Disposition” means, with respect to any Credit Party, the sale, lease, license, transfer, assignment or other disposition of, or the expropriation, condemnation, destruction or other loss of, all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one transaction or a series of transactions (including a Sale/Leaseback Transaction), other than (a) inventory sold in the ordinary course of business upon customary credit terms, (b) sales of scrap or obsolete material or equipment which are not material in the aggregate, (c) sales or other dispositions of assets which are not in the ordinary course of business or leases of real property or personal property (under which a Credit Party is

- 3 -

lessor), in any such case, which have a Fair Market Value less than $2,000,000 for any transaction and less than $2,000,000 for all such transactions in any Fiscal Year and which are no longer used or useful in the business, (d) licenses granted to third parties in the ordinary course of business, (e) property sold to any other Credit Party, and (f) any other disposition consented to by the Required Lenders. In the case of an expropriation, condemnation, destruction or other loss of any property, any insurance proceeds or other indemnity received as a result of such event may be used by the Credit Party within the 90-day period following the receipt of such insurance proceeds or other indemnity to replace the property so disposed of and such sale or disposition will not constitute an Asset Disposition.

     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

     “Authorization” means, with respect to any Person, any authorization, order, permit, approval, grant, licence, consent, right, franchise, privilege, certificate, judgment, writ, injunction, award, determination, direction, decree, by-law, rule or regulation of any Governmental Authority having jurisdiction over such Person, whether or not having the force of Law.

     “Borrower” means Microcell Solutions Inc., a CBCA corporation, and its successors and permitted assigns.

     “Business” means, with respect to the Credit Parties, (i) the development, delivery or distribution in Canada of telecommunications services (including wireless voice, data or video services), (ii) any business or activity reasonably related thereto, including any business conducted by the Credit Parties on the Effective Date, and (iii) the acquisition, holding or exploitation of any licence relating to the delivery of the services described in clause (i) of this definition.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and Montreal, Quebec are authorized or required by applicable law to remain closed.

     “Canadian Court” means the Superior Court of the Province of Quebec.

     “Canadian Dollar” and “$” refer to lawful money of Canada.

     “Capital Expenditures” means, for any period, all expenditures (whether paid in cash or accrued as a liability, including the portion of Capital Lease Obligations originally incurred during such period that are capitalized) during such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or equipment” or comparable items, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, in an amount not exceeding any insurance proceeds received in connection with such destruction or damage.

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     “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “CBCA” is defined in Introductory Statement C.

     “CCAA” is defined in Introductory Statement C.

     “Change in Law” means (i) the adoption of any new Law after the date of this Agreement, (ii) any change in any existing Law or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or, for purposes of Section 2.6(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law, but in the case of a request, guideline or directive not having the force of law, being a request, guideline or directive with which Persons customarily comply) of any Governmental Authority made or issued after the date of this Agreement.

     “Collateral” means the property which is charged by or hypothecated under the Security Documents, and includes all property, rights and assets, present and future, of the Borrower, the Parent and those subsidiaries of the Borrower or the Parent which have provided or may hereafter provide security to the Collateral Agent (or to any trustee or “fondé de pouvoir” for or on behalf of the Collateral Agent and/or the Lenders) to secure the obligations of the Borrower, the Parent and such subsidiaries under this Agreement and the other Financing Documents.

     “Collateral Agent” means JPMorgan Chase Bank, Toronto Branch, in its capacity as collateral agent and fondé de pouvoir for the Lenders hereunder, and pursuant to the Intercreditor Agreement, or any successor Collateral Agent appointed pursuant to the Intercreditor Agreement.

     “Collateral and Guarantee Requirement” means the requirement that:

(i)

the Collateral Agent (or the Administrative Agent in the case of a Guarantee) shall have received (i) from each Credit Party, a counterpart of each of the Security Documents duly executed and delivered on behalf of such Credit Party, and (ii) in the case of any Person that becomes a Credit Party after the Effective Date, either (as applicable) (A) a supplement to each applicable Security Document, in the form specified therein, duly executed and delivered on behalf of such Credit Party, and/or (B) additional Security Documents, in form and substance satisfactory to the Collateral Agent, duly executed and delivered on behalf of such Credit Party;

(ii)

all outstanding Equity Securities of the Borrower, each other Subsidiary owned by or on behalf of any Credit Party, and each Unrestricted Subsidiary owned by or on behalf of any Credit Party, shall have been pledged pursuant to pledge

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	agreements, in form and substance satisfactory to the Collateral Agent, and the Collateral Agent shall have received certificates or other instruments representing all such Equity Securities, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;
(iii)	each promissory note evidencing any Indebtedness of any Credit Party or any Unrestricted Subsidiary that is owing to any other Credit Party shall have been pledged pursuant to pledge agreements, in form and substance satisfactory to the Collateral Agent, and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;
(iv)	all documents and instruments, including all PPSA financing statements or other appropriate filings, required by Law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create (or continue the creation of) the Liens intended to be created by the Security Documents and perfect or render opposable against third parties (or continue to perfect or render opposable against third parties) such Liens to the extent required by, and with the priority required by, the Security Documents, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;
(v)	the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property, duly executed and delivered by the owner of such Mortgaged Property, and (ii) such legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; and
(vi)	each Credit Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder.

     “Control” means, in respect of a particular Person, 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 ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

     “Credit Party” means the Parent, the Borrower, the Pre-Filing Parent, each of the Subsidiaries and any other Person which is a party to a Financing Document (other than the Administrative Agent, the Collateral Agent and the Lenders and their respective successors and assigns), but, for greater certainty, does not include any Unrestricted Subsidiary.

     “Currency Due” is defined in Section 2.10.

     “Default” means any event or condition which constitutes an Event of Default or which, upon notice, lapse of time or both, would, unless cured or waived, become an Event of Default.

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     “ECF EBITDA” means operating income (loss) plus, to the extent deducted in calculating operating income (loss), non-cash restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

     “Effective Date” means the “Effective Date” as defined in the Plan of Arrangement.

     “Environmental Laws” means all federal, provincial, local or foreign laws, rules, regulations, codes, ordinances, orders, decrees, judgements, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling, release, threatened release or disposal of any Hazardous Material, or to health and safety matters.

     “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, collection, treatment, storage, transportation, recovery, recycling or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

     “Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.

     “Events of Default” has the meaning specified in Section 7.1.

     “Excess Cash Flow” means, for the Credit Parties for any Fiscal Year, consolidated ECF EBITDA of the Credit Parties for such period minus the sum (without duplication) of (i) scheduled principal payments made by the Credit Parties during such Fiscal Year under this Agreement, and scheduled principal payments made by the Credit Parties during such Fiscal Year under the Tranche B Credit Agreement to the extent such payments are permitted by the Intercreditor Agreement, (ii) principal payments made by the Credit Parties during such Fiscal Year under the Tranche A Exit Facility Agreement (including under any Permitted Additional Exit Facility Debt), to the extent that such payments result in a corresponding decrease in the commitment amounts under the Tranche A Exit Facility Agreement, (iii) the principal portion of scheduled payments made by the Credit Parties during such Fiscal Year on Capital Lease Obligations to the extent such Capital Lease Obligations and payments are permitted by the Tranche A Exit Facility Agreement and the Tranche B Credit Agreement, (iv) cash interest paid by the Credit Parties in respect of such Fiscal Year, (v) cash taxes applicable to such Fiscal Year and paid or payable by the Credit Parties prior to the date of determination, and (vi) Capital Expenditures made by Credit Parties during such Fiscal Year to the extent permitted by the Tranche A Exit Facility Agreement and the Tranche B Credit Agreement.

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     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, income or franchise Taxes imposed on (or measured by) its taxable income or capital Taxes imposed on (or measured by) its taxable capital, in each case by Canada, or by the jurisdiction under the Laws of which such recipient is organized or in which its principal office is located or Canadian federal withholding tax imposed under the Income Tax Act solely by reason of a Lender not dealing at arm’s length with the Borrower within the meaning of the Income Tax Act other than solely by reason of the interest of such Lender in the rights and securities of the Borrower and the Guarantors acquired by such Lender pursuant to the Plan of Arrangement.

     “Fair Market Value” means (a) with respect to any asset or group of assets (other than a marketable security) at any date, the value of the consideration obtainable in a sale of such asset at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal, and (b) with respect to any marketable security at any date, the closing sale price of such marketable security on the Business Day next preceding such date, or, if there is no such closing sale price of such marketable security, the final price for the purchase of such marketable security at face value quoted on such Business Day by a financial institution of recognized standing selected by the Administrative Agent which regularly deals in securities of such type.

     “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower or the Parent.

     “Financing Documents” means this Agreement, the Security Documents, the Mortgages, and the Intercreditor Agreement, together with any other document, instrument or agreement (other than participation, agency or similar agreements among the Lenders or between any Lender and any other bank or creditor with respect to any Indebtedness or obligations of the Borrower or any Subsidiary (as applicable) hereunder or thereunder) now or hereafter entered into in connection with this Agreement, as such documents, instruments or agreements may be amended, modified or supplemented from time to time.

     “First Notes” means the first subordinated convertible 9% notes issuable by the Parent pursuant to a certain First Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “First Preferred Shares” means first preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Fiscal Quarter” means any fiscal quarter of the Borrower.

     “Fiscal Year” means any fiscal year of the Borrower.

     “Foreign Lender” means any Lender that is a non-resident of Canada for Canadian tax purposes and not an “authorized foreign bank” under Section 2 of the Bank Act (Canada).

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     “GAAP” means generally accepted accounting principles in Canada as in effect from time to time.

     “Governmental Authority” means the Government of Canada, any other nation or any political subdivision thereof, whether provincial, state, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, fiscal or monetary authority or other authority regulating financial institutions, and any other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including the Basel Committee on Banking Supervision of the Bank for International Settlements.

     “Guarantee” of or by any Person (in this definition, the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (in this definition, the “primary credit party”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital solvency, or any other balance sheet, income statement or other financial statement condition or liquidity of the primary credit party so as to enable the primary credit party to pay such Indebtedness or other obligation, or (d) as an account party in respect of any letter of credit or letter of guarantee issued to support such Indebtedness or other obligation.

     “Hazardous Materials” means any substance, product, liquid, waste, pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid matter, organic or inorganic matter, fuel, micro-organism, ray, odour, radiation, energy, vector, plasma, constituent or material which (a) is or becomes listed, regulated or addressed under any Environmental Law, or (b) is, or is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of pollution or contamination under any Environmental Law, including, asbestos, petroleum and polychlorinated biphenyls, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

     “Income Tax Act” means the Income Tax Act (Canada), as amended from time to time.

     “Indebtedness” of any Person includes, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such

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Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, and (k) the net amount of obligations of such Person (determined on a marked-to-market basis) under Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general or limited partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. For greater certainty, “Indebtedness” does not include short-term trade debt incurred in the ordinary course of business.

     “Indemnified Taxes” means all Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning specified in Section 9.3(b).

     “Information Circular” means the Information Circular and Proxy Statement dated February 17, 2003 issued by the Pre-Filing Parent, Pre-Filing Borrowers and certain of their subsidiaries in connection with the Plan of Arrangement.

     “Intercreditor Agreement” means an Intercreditor and Collateral Agency Agreement substantially in the form attached as Exhibit B, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Interest Payment Date” means April 30 and October 31 of each year, commencing on the Effective Date and concluding on the Maturity Date, and the Maturity Date.

     “Judgment Currency” is defined in Section 2.10.

     “Laws” means all federal, provincial, municipal, foreign and international statutes, acts, codes, ordinances, decrees, treaties, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards or any provisions of the foregoing, including general principles of common and civil law and equity, and all policies, practices and guidelines of any Governmental Authority binding on or affecting the Person referred to in the context in which such word is used (including, in the case of tax matters, any accepted practice or application or official interpretation of any relevant taxation authority); and “Law” means any one or more of the foregoing.

     “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of such Lender, or (ii) any Person that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender, and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

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     “Lenders” is defined in Section 2.1, and includes the Persons listed on Schedule A and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

     “Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, security interest, royalty interest, adverse claim, defect of title or right of set off in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease, title retention agreement or consignment agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to any asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, (d) any netting arrangement, defeasance arrangement or reciprocal fee arrangement, and (e) any other arrangement having the effect of providing security.

     “Loan” is defined in Section 2.1.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its subsidiaries taken as a whole, which affect the ability of the Borrower to timely pay any amounts owing under the Credit Agreement or fulfil any other covenant or obligation of a material nature arising under the Financing Documents, or (b) the validity or enforceability of any of the Financing Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.

     “Maturity Date” means April 30, 2013.

     “Mortgage” means a mortgage, debenture, deed of trust, hypothec, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be satisfactory in form and substance to the Collateral Agent.

     “Mortgaged Property” means, initially, each parcel of real property and the improvements thereto owned by a Credit Party and identified as a Mortgaged Property on Schedule B, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.6.

     “Net Proceeds” means, (a) with respect to any Asset Disposition, the gross amount received by the Credit Parties from such Asset Disposition, including proceeds of any insurance policies received by the Credit Parties in connection with such Asset Disposition and amounts received by the Credit Parties pursuant to any expropriation proceeding or condemnation proceeding in connection with such Asset Disposition, minus the sum of (i) the amount, if any, of all Taxes paid or payable by the Credit Parties directly resulting from such Asset Disposition (including the amount, if any, estimated by such Credit Party in good faith at the time of such Asset Disposition for Taxes payable by the Credit Parties on or measured by net income or gain resulting from such Asset Disposition, taking into account any Tax losses or credits available or to be available to the Credit Parties at the time such Taxes are payable that are not used to offset other income or gains), and (ii) the reasonable out-of-pocket costs and expenses incurred by the

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Credit Parties in connection with such Asset Disposition (including reasonable brokerage commissions and customary fees and expenses of counsel, investment bankers and other advisors paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties), and (b) with respect to any issuance of Equity Securities issued to a Person which is not another Credit Party, the gross amount received by the Credit Parties from such issuance of Equity Securities, minus the reasonable out-of-pocket costs and expenses incurred by the Credit Parties in connection with such issuance of Equity Securities (including reasonable legal, underwriting and brokerage fees and expenses paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties). For greater certainty, the Net Proceeds in respect of the issuance of Equity Securities to a Credit Party shall be nil.

     “Notes” means the First Notes and the Second Notes.

     “Parent” means Microcell Telecommunications Inc. (incorporated on April 28, 2003, being New Microcell for purposes of the Plan of Arrangement), a CBCA corporation, and its successors and permitted assigns.

     “Parent Articles of Incorporation” means the Articles of Incorporation of the Parent as in effect on the Effective Date.

     “Participant” has the meaning set forth in Section 9.4 (d).

     “Payment Office” means the Administrative Agent’s office located at Suite 1800, South Tower, Royal Bank Plaza, Toronto, Ontario, Attention: Corporate Banking Officers, (or such other office or individual as the Administrative Agent may hereafter designate in writing to the other parties hereto).

     “Perfection Certificate” means a certificate in the form of Exhibit A to the general security agreements provided by the Credit Parties pursuant to Section 4.1(o)(ii), or in any other form approved by the Collateral Agent.

     “Permitted Additional Exit Facility Debt” means secured Indebtedness, in an aggregate principal amount not exceeding an amount equal to $75,000,000 less the principal amount of the Tranche A Exit Facility on the Effective Date, incurred by the Borrower at any time after the Effective Date, by way of an increase in the “Commitments” under the Tranche A Exit Facility.

     “Permitted Liens” means:

(i)	Liens in favour of the Tranche A Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche A Exit Facility Agreement (including any Permitted Additional Exit Facility Debt), and Liens in favour of the Tranche B Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) pursuant to the Tranche B Credit Agreement;
(ii)	Liens in favour of the Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf) for the obligations of the Borrower and other Credit Parties under or

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	pursuant to the Financing Documents, and Liens granted pursuant to the Pre-Filing Credit Agreement;
(iii)	Liens granted by a Credit Party in favour of another Credit Party in order to secure any of its Indebtedness to the other Credit Party, provided that such Liens are subject to assignment, payment subordination and Lien subordination arrangements satisfactory to the Administrative Agent;
(iv)	Purchase Money Liens and Liens securing Capital Lease Obligations securing Indebtedness to the extent permitted by Section 6.1(g);
(v)	Liens imposed by any Governmental Authority for Taxes not yet due and delinquent or which are being contested in good faith, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties;
(vi)	carrier’s, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction and other like Liens arising by operation of Law, arising in the ordinary course of business, which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings, and, during such period during which such Liens are being so contested, such Liens shall not be executed on any of the assets of the Credit Parties, provided that the Credit Parties shall have set aside on its books reserves deemed adequate therefor and not resulting in qualification by auditors;
(vii)	statutory Liens incurred or pledges or deposits made under worker’s compensation, unemployment insurance and other social security legislation;
(viii)	deposits to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature (other than for borrowed money) incurred in the ordinary course of business, and Liens in respect of cash collateral to secure reimbursement obligations in respect of letters of credit (other than letters of credit issued pursuant to the Tranche A Exit Facility Agreement), provided that, in each such case, such deposits or Liens existed on the Effective Date (and have not been extended or renewed after the Effective Date) and the amount of all such deposits and cash collateral shall not exceed Cdn.$4,500,000 in the aggregate at any time;
(ix)	servitudes, easements, rights-of-way, restrictions and other similar encumbrances on real property imposed by Law or incurred in the ordinary course of business and encumbrances consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minor imperfections in title thereto which, in the aggregate, are not material, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Credit Parties;

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(x)	Liens of or resulting from any judgement or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Credit Parties shall at any time in good faith be prosecuting an appeal or proceeding for review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;
(xi)	undetermined or inchoate Liens and charges arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Law or of which written notice has not been duly given in accordance with applicable Law or which although filed or registered, relate to obligations not due or delinquent;
(xii)	the rights reserved to or vested in Governmental Authorities by statutory provisions or by the terms of leases, licenses, franchises, grants or permits, which affect any land, to terminate the leases, licenses, franchises, grants or permits or to require annual or other periodic payments as a condition of the continuance thereof;
(xiii)	securities to public utilities or to any municipalities or Governmental Authorities or other public authority when required by the utility, municipality or Governmental Authorities or other public authority in connection with the supply of services or utilities to the Credit Parties;
(xiv)	Liens or covenants restricting or prohibiting access to or from lands abutting on controlled access highways or covenants affecting the use to which lands may be put; provided that such Liens or covenants do not materially and adversely affect the use of the lands by the Credit Parties;
(xv)	Liens consisting of royalties payable with respect to any asset or property of the Credit Parties existing as of the Effective Date, provided that the existence of any such Lien on any material property or asset of the Credit Parties shall have been disclosed in writing to the Lenders prior to the Effective Date;
(xvi)	statutory Liens incurred or pledges or deposits made in favour of a Governmental Authority to secure the performance of obligations of the Credit Parties under Environmental Laws to which any assets of the Credit Parties are subject;
(xvii)	a Lien granted by a Credit Party to a landlord to secure the payment of arrears of rent in respect of leased property in the Province of Quebec leased from such landlord, provided that such Lien is limited to the assets located at or about such leased property; and

any extension, renewal or replacement of any of the foregoing; provided that the Liens permitted hereunder shall not be extended to cover any additional Indebtedness of the Credit Parties or their property (other than a substitution of like property), except Liens in respect of Purchase Money Liens and Capital Lease Obligations as permitted by (iv) above.

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          “Permitted Subordinated Refinancing Debt” means Indebtedness of the Parent that is used to refinance, replace, defease or refund, in whole or in part, the Indebtedness under the Tranche B Credit Agreement, provided that if, after the incurrence and application of such Indebtedness to refinance, replace, defease or refund, in whole or in part, the Indebtedness under the Tranche B Credit Agreement, there will still be Indebtedness outstanding thereunder, then (i) the principal amount of such Indebtedness will not exceed the principal amount of the Indebtedness so refinanced, replaced, defeased or refunded, plus any other amounts required to be paid in connection therewith and the reasonable and customary fees and expenses incurred in connection therewith, (ii) no material terms applicable to such Indebtedness (including the covenants and events of default) will be materially less favourable to the Parent, the Borrower or the Lenders than the terms that are applicable under the Tranche B Credit Agreement, (iii) the covenants contained therein will be less restrictive than the covenants contained in the Tranche B Credit Agreement, (iv) there will be no principal amortization payments (including any sinking fund therefor) on such Indebtedness before the date which is six months after the “Maturity Date” under the Tranche B Credit Agreement, (v) such Indebtedness will mature at least six months after the “Maturity Date” under the Tranche B Credit Agreement, (vi) such Indebtedness will be Indebtedness of the Parent only, and will not be Guaranteed by the Borrower, (vii) such Indebtedness will be unsecured, (viii) such Indebtedness will accrue interest at a rate determined in good faith by the board of directors of the Parent to be a market rate of interest for such Indebtedness at the time of issuance thereof, and (ix) such Indebtedness will be otherwise on terms and conditions satisfactory to the “Administrative Agent” under the Tranche B Credit Agreement; provided, however, that the restrictions in subparagraphs (ii) and (ix) above shall not apply to pricing of such Indebtedness.

     “Person” includes any natural person, corporation, company, limited liability company, trust, joint venture, association, incorporated organization, partnership, Governmental Authority or other entity.

     “Plan of Arrangement” is defined in Introductory Statement C.

     “PPSA” means the Personal Property Security Act (Ontario), as amended from time to time, or the analogous legislation in any other relevant jurisdiction.

     “Pre-Filing Borrowers” is defined in Introductory Statement A.

     “Pre-Filing Credit Agreement” is defined in Introductory Statement A.

     “Pre-Filing Lenders” is defined in Introductory Statement A.

     “Pre-Filing Loans” is defined in Introductory Statement A.

     “Pre-Filing Parent” is defined in Introductory Statement A.

     “Purchase Money Lien” means a Lien taken or reserved in personal property to secure payment of all or part of its purchase price, provided that such Lien (i) secures an amount not exceeding the lesser of the purchase price of such personal property and the Fair Market Value of

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such personal property, (ii) extends only to such personal property and its proceeds, and (iii) is granted prior to or within 30 days after the purchase of such personal property.

     “Register” has the meaning set forth in Section 9.4(b).

     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

     “Required Lenders” means, at any time, Lenders with Loans representing more than 50% of the aggregate amount of Loans outstanding.

     “Responsible Officer” means, with respect to any Person (other than a natural person), the chairman, the president, any vice president, the chief executive officer or the chief operating officer, and, in respect of financial or accounting matters, any Financial Officer of such Person; unless otherwise specified, all references herein to a Responsible Officer mean a Responsible Officer of the Borrower.

     “Sale/Leaseback Transaction” means any arrangement between a Credit Party and another Person (other than another Credit Party) providing for the leasing by the Credit Party of property which has been or is to be sold or transferred by the Credit Party to such other Person.

     “Sanction Order” means the order of the Canadian Court sanctioning the Plan of Arrangement, dated March 18, 2003, as such order may be amended, modified or supplemented in accordance with the terms of the Plan of Arrangement.

     “Second Notes” means the second subordinated convertible 9% notes issuable by the Parent pursuant to a certain Second Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent.

     “Second Preferred Shares” means the second preferred shares in the capital of the Parent having the terms and conditions contemplated in the Parent Articles of Incorporation.

     “Security Documents” means the documents listed in Section 4.1(o).

     “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, limited partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, limited partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

     “Subsidiary” means any subsidiary of the Parent (other than the Borrower and any Unrestricted Subsidiary).

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     “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Credit Parties shall be a Swap Agreement.

     “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, unemployment insurance payments and workers’ compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties with respect thereto, imposed by any Governmental Authority (including federal, state, provincial, municipal and foreign Governmental Authorities), and whether disputed or not.

     “Tranche A Exit Facility” means the secured revolving credit facility, in the aggregate principal amount of at least $25,000,000 and not more than $75,000,000, established in favour of the Borrower as contemplated in Section 7.3(c)(i) of the Plan of Arrangement, and includes any Permitted Additional Exit Facility Debt.

     “Tranche A Exit Facility Agreement” means the credit facility agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche A Exit Facility, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche A Lenders” means the lenders under the Tranche A Exit Facility Agreement.

     “Tranche B Credit Agreement” means the credit agreement, dated as of the date hereof, establishing the terms and conditions of the Tranche B Loans, as such agreement may be amended, supplemented or otherwise modified or restated from time to time.

     “Tranche B Lenders” means the lenders under the Tranche B Credit Agreement.

     “Tranche B Loans” means the secured Canadian Dollar and U.S. Dollar non-revolving loans to the Borrower in the aggregate principal amount of $300,000,000 made by the Tranche B Lenders under the Tranche B Credit Agreement, as contemplated in Section 7.3(c)(ii) of the Plan of Arrangement.

     “Transactions” means the execution, delivery and performance by the Borrower and the other Credit Parties of this Agreement and the other Financing Documents.

     “Unrestricted Subsidiary” means Inukshuk Internet Inc. and Telcom Investments Inc. (but in the case of Telcom Investments Inc., only for so long as its sole activity is serving as general partner of GSM Capital Partners), and their respective successors and permitted assigns.

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     “U.S. Dollar” refers to lawful money of the United States of America.

1.2     Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “or” is disjunctive; the word “and” is conjunctive. The word “shall” is mandatory; the word “may” is permissive. The words “to the knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by the Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by such Responsible Officer of that Person). Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference to such statute or section as amended, restated or re-enacted from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “this Agreement”, “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement (as the same may be amended, supplemented or otherwise modified or restated from time to time) in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

1.3      Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.

1.4      Time. All time references herein shall, unless otherwise specified, be references to local time in Toronto, Ontario. Time is of the essence of this Agreement and the other Financing Documents.

1.5      Permitted Liens. Any reference in any of the Financing Documents to Permitted Liens is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien created by any of the Financing Documents to any Permitted Liens.

1.6     Schedules and Exhibits. The following Schedules and Exhibits are attached to and form part of this Agreement:

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SCHEDULES:
Schedule A	- -	Lenders Loans
Schedule B	- -	Disclosed Matters
EXHIBITS:
Exhibit A	- -	Form of Assignment and Assumption
Exhibit B	- -	Form of Intercreditor Agreement

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ARTICLE 2
LOANS

2.1      Loans. Subject to the terms and conditions and relying upon the representations, warranties and covenants herein set forth, each of the parties hereto agrees that, effective as of the Effective Date, an aggregate of $50,000,000 of the Pre-Filing Secured Claims owing by the Borrower to the Pre-Filing Lenders in respect of the Pre-Filing Loans and/or the Pre-Filing Hedging Obligations shall be restructured as, and shall thereafter take the form of, loans under this Agreement (each, a “Loan”). Any existing holder of Pre-Filing Secured Claims which elects to have a portion of its Pre-Filing Secured Claims take the form of Loans (each a “Lender” and, collectively, “Lenders”), in accordance with Section 6.1(ii) of the Plan of Arrangement, shall be allocated Loans in an amount equal to the principal amount of Pre-Filing Secured Claims held by such Lender, after deducting the amount with respect to any Tranche B Loans allocated to such Lender pursuant to Section 6.1(i) of the Plan of Arrangement, and subject to pro rata allocation, based upon each Lender’s respective Pre-Filing Secured Claims, if the aggregate election requests of all Lenders exceeds $50,000,000. The initial amount of each Lender’s Loans as at the Effective Date will be as set forth in Schedule A. Without limitation of any of the foregoing, the Borrower hereby acknowledges and agrees that its liability in respect of the Loans shall be absolute and unconditional. Nothing in this Agreement or in any other Financing Document shall be construed as a commitment by any Lender to make any additional loan or other credit available under this Agreement or in any other Financing Document. The Lenders acknowledge that the Loans and the Liens granted as security therefor are subordinated in the manner and to the extent provided in the Intercreditor Agreement.

2.2      Interest.

(a)	The Loans shall bear interest (computed in arrears on the basis of the actual number of days elapsed over a year of 365 days or 366 days, as the case may be) at a rate per annum equal to 8%, calculated on a semi-annual basis. The Borrower shall have the option of paying accrued interest on each Interest Payment Date. Unless the Borrower elects to pay (and does pay) interest on an Interest Payment Date, all accrued interest shall also accrue interest and compound at a rate per annum of 8%, calculated on a semi-annual basis, until paid, and shall be payable on the Maturity Date.
(b)	Notwithstanding the foregoing, if any principal of any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 10%, calculated on a semi-annual basis, until paid.
(c)	In the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.
(d)	All interest hereunder shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

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(e)

The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.

(f)

If any provision of this Agreement would oblige the Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by Law or so result in a receipt by that Lender of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), by reducing any fees, commissions premiums and other amounts required to be paid to the affected Lender which would constitute interest for the purposes of Section 347 of the Criminal Code (Canada).

2.3      Repayment of Loans. The Borrower hereby unconditionally promises to pay to the Administrative Agent, for the account of the Lenders, the unpaid principal amount of all of the Loans, and all other amounts owing hereunder (including unpaid accrued interest) on the Maturity Date.

2.4      Evidence of Debt.

(a)	Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender hereunder, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b)	The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(c)	The entries made in the accounts maintained pursuant to Sections 2.4(a) and (b) shall be conclusive evidence (absent manifest error) of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. In the event of a conflict between the records maintained by the Administrative Agent and any Lender, the records maintained by the Administrative Agent shall govern.
(d)	Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such

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Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.4) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

2.5		Prepayments of Loans; Payments Pursuant to Other New Instruments.
	(a)	Excess Cash Flow Sweep; Asset Sales; Equity Securities. Section 2.2 of the Intercreditor Agreement provides for certain payments to be made if the Credit Parties generate Excess Cash Flow in any Fiscal Year, if a Credit Party receives Net Proceeds from an Asset Disposition, or if a Credit Party received Net Proceeds from the issuance of Equity Securities. The Borrower shall comply with its obligations under the Intercreditor Agreement (including all payments, prepayments and offers of prepayment thereunder). Any payment received pursuant to Section 2.2 of the Intercreditor Agreement, shall be applied, on a pro rata basis, firstly, against the amounts of unpaid accrued interest on the Loans, and thereafter, to the permanent prepayment of the Loans outstanding. The Borrower shall provide to the Administrative Agent written irrevocable notice of such payment at least three Business Days prior to the date such payment is to be made. If any such notice is given, the amount specified in such notice shall be due and payable on the date required by Section 2.2 of the Intercreditor Agreement, together with any amounts payable pursuant to Section 2.7 hereunder. Upon receipt of any notice given pursuant to this Section, the Administrative Agent shall promptly notify each affected party of the contents thereof and of such party’s Applicable Percentage of such payment. No prepayment of any Loan may be reborrowed.
	(b)	Voluntary Prepayments. Subject to the provisions of the Intercreditor Agreement, the Borrower may, at its option, at any time and from time to time, prepay the Loans, in whole or in part, upon giving three Business Days’ prior written notice to the Administrative Agent. Such notice shall specify the date and amount of prepayment and shall be irrevocable. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s Applicable Percentage of such prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to Section 2.7 and accrued interest to such date on the amount prepaid in accordance with Section 2.2. Each voluntary prepayment of any Loan shall be permanent, and shall be in a minimum principal amount of $1,000,000 and in an integral multiple of $100,000.
	(c)	Notice by Administrative Agent. Upon receipt of a notice of payment pursuant to this Section 2.5, the Administrative Agent shall promptly notify each affected party of the contents thereof and of such party’s rateable share of such payment.

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2.6     Increased Costs; Illegality

(a)	If any Change in Law shall:
	(i)	impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or
	(ii)	impose on any Lender any other condition affecting this Agreement (including the imposition on any Lender of, or any change to, any Indemnified Tax);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan or to increase the cost to such Lender of participating in any Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)	If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and such Lender’s desired return on capital), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c)	A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender as specified in Sections 2.6(a) or (b), together with a brief description of the Change of Law, shall be delivered to the Borrower, and shall be conclusive absent manifest error. In preparing any such certificate, a Lender shall be entitled to use averages and to make reasonable estimates, and shall not be required to “match contracts” or to isolate particular transactions. The Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.
(d)	Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.6 shall not constitute a waiver of such Lender’s right to demand such compensation.

2.7      Break Funding Payments. In the event of a failure by the Borrower to prepay any Loan on the date specified in any notice delivered by the Borrower pursuant hereto, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such

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event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.7 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

2.8     Taxes.

(a)	Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.8), the Administrative Agent or relevant Lender (as the case may be) receives an amount equal to the sum it would have received had no such deduction been made, (ii) the Borrower shall make such deduction, and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.
(b)	In addition to the payments by the Borrower required by Section 2.8(a), the Borrower shall pay any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement to the relevant Governmental Authority in accordance with applicable Law.
(c)	The Borrower shall indemnify the Administrative Agent and each Lender, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.8) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d)	As soon as practicable after any payment of Indemnified Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)	In the event that the Borrower is required by applicable Law to deduct any Indemnified Taxes from any payment hereunder, any Foreign Lender that is

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entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), if requested to do so by the Borrower, at the time or times prescribed by applicable Law, such properly completed and executed documentation prescribed by applicable Law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.

2.9          Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)	The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees, amounts payable under any of Sections 2.6, 2.7 or 2.8, or otherwise) prior to 12:00 noon, Toronto time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under this Section 2.9 shall be made in Canadian Dollars.
(b)	If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of any amounts payable to the Administrative Agent pursuant to Section 9.3, (ii) second, towards payment of interest and fees then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, towards payment of principal then due hereunder, rateably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c)	Without limiting the provisions of the Intercreditor Agreement, if any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders rateably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all

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	or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) this Section 2.9(c) shall not apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to any Credit Party (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)	Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the rate otherwise applicable to such payment.
(e)	If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.9(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Section 2.9(d) until all such unsatisfied obligations are fully paid.

2.10      Currency Indemnity. If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement or any other Financing Document, it becomes necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or under any other Financing Document in any currency other than the Judgment Currency (the “Currency Due”), then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgment is given. For this purpose “rate of exchange” means the rate at which the Administrative Agent is able, on the relevant date, to purchase the Currency Due with the Judgment Currency in accordance with its normal practice at its head office in Toronto, Ontario. In the event that there is a change in the rate of exchange prevailing between the Business Day before the day on which the judgment is given and the date of receipt by the Administrative Agent of the amount due, the Borrower will, on the date of receipt by the Administrative Agent, pay such additional amounts, if any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the

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amount received by the Administrative Agent on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on the date of receipt by the Administrative Agent is the amount then due under this Agreement or such other Financing Document in the Currency Due. If the amount of the Currency Due which the Administrative Agent is so able to purchase is less than the amount of the Currency Due originally due to it, the Borrower shall indemnify and save the Administrative Agent and the Lenders harmless from and against all loss or damage arising as a result of such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Financing Documents, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Administrative Agent from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due under this Agreement or any other Financing Document or under any judgment or order.

2.11     Mitigation Obligations; Replacement of Lenders.

(a)

If any Lender requests compensation under Section 2.6, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, then such Lender shall use reasonable efforts to designate a different lending office for booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.6 or 2.8, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)

If any Lender requests compensation under Section 2.6, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.6 or payments required to be made pursuant to Section 2.8, such assignment will result

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in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if an Event of Default has occurred and is continuing or if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

2.12     Indemnity for Returned Payments. If, after receipt of any payment which is applied to the payment of all or any part of the Loans, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Loans or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender and the Borrower shall be liable to pay to the Administrative Agent and the Lenders, and hereby does indemnify the Administrative Agent and the Lenders and holds the Administrative Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.12 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Administrative Agent’s and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.12 shall survive the termination of this Agreement.

2.13      Existing Security. The Borrower and the Parent confirm that, in accordance with paragraph 27 of the Sanction Order, (a) the Liens granted pursuant to the Pre-Filing Credit Agreement (the “Existing Security”) shall remain in place and be reserved pending the execution, delivery and registration of the Security Documents pursuant to this Agreement and the delivery of all required consents to such Security Documents, and (b) no steps to perfect or reperfect (including registration or publication of any hypothecs) the Existing Security, other than any steps which are required generally under applicable provincial laws to maintain perfection of security interests (including registration or publication of any hypothecs), shall be required to secure the obligations of the Borrower and the Parent hereunder.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Each of the Borrower and the Parent represents and warrants to the Administrative Agent and the Lenders that:

3.1 Organization; Powers. The Borrower and each other Credit Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now and formerly conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

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3.2      Authorization; Enforceability. The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, shareholder action. This Agreement and the other Financing Documents have been duly executed and delivered by the Borrower and each other Credit Party (as applicable) and constitute legal, valid and binding obligations of the Borrower and each other Credit Party (as applicable), enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganisation, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.3      Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except those disclosed in Schedule B, (b) will not violate any applicable Law or the charter, by-laws or other organizational documents of the Borrower or any Credit Party or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any Credit Party or their respective assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Credit Party, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Credit Party, except for any Lien arising in favour of the Collateral Agent, for the benefit of the Lenders, under the Financing Documents.

3.4      Financial Condition. All information (including the information contained in the Information Circular and all financial statements) pertaining to the Parent, its Subsidiaries and any Unrestricted Subsidiary (other than projections) that has been or will be made available to the Lenders or the Administrative Agent by the Parent or any representative of the Parent and its Subsidiaries, taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made. The projections that have been or will be made available to the Lenders or the Administrative Agent by the Parent or the Borrower or any representative of the Parent or the Borrower have been or will be prepared in good faith based upon assumptions that were reasonable when made.

3.5     Subsidiaries. As of the Effective Date, the Borrower has no subsidiaries other than those listed in Schedule B. As of the Effective Date, the Parent has no subsidiaries except the Borrower, the Pre-Filing Parent and the subsidiaries of the Parent listed in Schedule B.

3.6      Fiscal Year. The Fiscal Year of the Borrower ends on December 31 of each calendar year, and the Borrower’s Fiscal Quarters end on the last day of each of March, June, September and December of each calendar year.

3.7      Security Interests. Each of the Security Documents creates (or continues the creation, as the case may be), as security for the obligations purported to be secured thereby, subject to the provisions hereof and thereof, a legal, valid and enforceable hypothec and/or

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security interest in all the Collateral subject to such Security Document, and each such Security Document shall constitute, to the fullest extent possible under applicable law and upon completion of all required filings or actions, either (a) a fully published and/or perfected Lien on, and security interest in, all of the Collateral subject to such Security Document or (b) a floating charge, fixed charge, hypothecation or security interest, as specified in the applicable Security Document, with respect to all of the Collateral subject to such Security Document, in each case in favour of the Collateral Agent or the “fondé de pouvoir” (person holding an irrevocable power of attorney) appointed for the benefit of the Lenders, and subject to no other Liens except Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2. The grantor, pledgor or assignor, as the case may be, under each Security Document has good title to all Collateral subject thereto free and clear of all Liens other than Permitted Liens and such additional Liens as may be expressly permitted under Section 6.2.

ARTICLE 4
CONDITIONS

4.1      Conditions Precedent to Effectiveness of Agreement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2):

(a)	Credit Agreement. The Administrative Agent (or its counsel) shall have received from each of the Parent and the Borrower a counterpart of this Agreement signed on behalf of each of the Parent and the Borrower and the Administrative Agent shall have delivered to the Borrower (or its counsel) a counterpart of this Agreement signed on behalf of the Administrative Agent and the Lenders.
(b)	Representations and Warranties. All representations and warranties made hereunder and in the other Financing Documents shall be true and correct as if made on the Effective Date.
(c)	No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing after giving effect to the Loans to be outstanding on the Effective Date.
(d)	Due Authorization. The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Credit Party, the authorization of the Transactions and any other legal matters relating to the Credit Parties, the Financing Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(e)	Fees. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) incurred in

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	connection with any of the Financing Documents and the Transactions, including perfecting Liens on any Collateral.
(f)	Legal Opinion. The Administrative Agent shall have received a favourable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Stikeman Elliott LLP, Canadian counsel to the Borrower and the Parent covering such matters relating to the Credit Parties, this Agreement or the Transactions as the Lenders shall reasonably request, and opinions of such other special and local counsel as may be required by the Administrative Agent and its counsel.
(g)	Satisfaction of Collateral and Guarantee Requirements. The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Effective Date and signed by a Responsible Officer of the Parent and its general counsel, together with all attachments contemplated thereby. All financing statements, instruments and other documents required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded, and all approvals and consents of Governmental Authorities required to be obtained, in each case in order to continue the publication, perfection of or to create, publish and perfect, as the case may be, the Liens intended to be created by the Security Documents with respect to the Collateral of the Credit Parties shall have been filed, registered, or recorded or obtained, as the case may be.
(h)	Books and Records. The Administrative Agent shall have had an opportunity, if it so chooses, to examine the books of account and other records and files of any Credit Party and to make copies thereof, and the results of such examination shall have been satisfactory to the Administrative Agent in all respects.
(i)	Consents and Approvals. All consents and approvals required to be obtained from any Governmental Authority or other Person in connection with the Transactions (including interim approval or its equivalent by Industry Canada with respect to the MCS licenses held by Inukshuk) shall have been obtained, and all applicable waiting periods and appeal periods shall have expired, in each case without the imposition of any burdensome conditions.
(j)	Satisfaction of Administrative Agent. All proceedings taken in connection with the execution of this Agreement, all other Financing Documents and all documents and papers relating thereto shall be satisfactory in form, scope, and substance to the Administrative Agent.
(k)	Indebtedness. After giving effect to the Transactions, no Credit Party shall have outstanding any shares of preferred stock or any Indebtedness, other than (i) the obligations created hereunder and (ii) the Indebtedness and preferred stock described in Schedule B.

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(l)	Occurrence of Effective Date under Plan of Arrangement. The “Effective Date” (as defined under the Plan of Arrangement) shall have occurred or shall occur contemporaneously with the effectiveness of this Agreement.
(m)	Sanction Order. The Sanction Order shall not have been stayed by any court having jurisdiction to issue any such stay, and the time to appeal the Sanction Order or to seek review, rehearing or certiorari with respect to the Sanction Order must have expired; no appeal or petition for review, rehearing or certiorari with respect to the Sanction Order may be pending, and the Sanction Order must otherwise be in full force and effect; and the corporate transactions contemplated by Section 3 of the Plan of Arrangement shall have been completed pursuant to documentation satisfactory (in form and substance) to the Administrative Agent.
(n)	Plan of Arrangement Not Amended, etc. The Plan of Arrangement shall not have been amended, supplemented, restated or otherwise modified in any manner not approved by the Administrative Agent.
(o)	Security Documents. The Collateral Agent (or, with respect to (i), the Administrative Agent) shall have received:

(i)	a guarantee executed by each Credit Party other than the Borrower in favour of the Administrative Agent, as agent for the Lenders, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent;
(ii)	a general security agreement executed by each Credit Party in favour of the Collateral Agent, as agent for the Lenders and the Administrative Agent, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all property from time to time of each Credit Party, subject only to Permitted Liens;
(iii)	a hypothec executed by each Credit Party in favour of the Collateral Agent, in its capacity as “fondé de pouvoir” for the Lenders appointed pursuant to Section 8.11 hereof (together with a bond issued pursuant to such hypothec and a pledge agreement pledging such bond), each dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority hypothecation of all property from time to time of each Credit Party, subject only to Permitted Liens;
(iv)	mortgages executed by each Credit Party in favour of the Collateral Agent, in its capacity as agent for the Lenders and the Administrative Agent appointed pursuant to Section 8.11 hereof, dated as of the Effective Date and in form and substance satisfactory to the Administrative Agent, constituting a first-priority Lien on all real property from time to time of such Credit Party, subject only to Permitted Liens;

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provided that if any of the foregoing documents are not suitable for use in any jurisdiction, the applicable Credit Party shall provide to the Collateral Agent (or the Administrative Agent with respect to (i) above) alternative document(s) with substantially equivalent substantive effect and which are suitable for use in such jurisdiction.

(p)	Execution of Financing Documents. The other Financing Documents and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, together with any and all other documents and instruments as may have been reasonably requested by the Administrative Agent.
(q)	Execution and Delivery of Documentation. Without limiting the generality of the items described above, each of the Credit Parties shall have delivered or caused to be delivered to the Administrative Agent (in form and substance reasonably satisfactory to the Administrative Agent), the financial statements, instruments, resolutions, documents, agreements, mortgages, title reports, certificates, opinions and other items as may have been requested by the Administrative Agent.
(r)	Other Financing. The Tranche A Exit Facility Agreement and the Tranche B Credit Agreement shall have been executed and delivered by the parties thereto and all conditions thereunder shall have been satisfied or waived.

ARTICLE 5
AFFIRMATIVE COVENANTS

     The Borrower and the Parent jointly and severally covenant and agree with the Lenders that from (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full:

5.1      Financial Statements and Other Information. The Parent or the Borrower (as applicable) will furnish to the Administrative Agent with copies for each Lender:

(i) within 120 days after the end of each Fiscal Year of the Parent, the Parent’s audited consolidated and unconsolidated balance sheets and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Parent and its consolidated subsidiaries on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;

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(ii)	within 120 days after the end of each Fiscal Year of the Borrower, the Borrower’s audited consolidated and unconsolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated and unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries, if any, on a consolidated and unconsolidated basis in accordance with GAAP consistently applied;
(iii)	within 120 days after the end of each Fiscal Year of each Unrestricted Subsidiary and each Credit Party other than the Parent and the Borrower, each such Unrestricted Subsidiary’s or Credit Party’s audited unconsolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such unconsolidated financial statements present fairly in all material respects the financial condition and results of operations of such Unrestricted Subsidiary or Credit Party, as applicable, on an unconsolidated basis in accordance with GAAP consistently applied;
(iv)	if requested by the Administrative Agent, within 120 days after the end of each Fiscal Year of the Parent, the Credit Parties’ audited combined and consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Ernst & Young LLP or other independent auditors of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such combined and consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Credit Parties on a combined and consolidated basis in accordance with GAAP consistently applied;
(v)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Parent, the Parent’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal

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	Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by a Financial Officer of the Parent as presenting fairly in all material respects the financial condition and results of operations of the Parent and its subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of notes and normal year-end audit adjustments;
(vi)	within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, the Borrower’s unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its subsidiaries, if any, on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(vii)	within 60 days after the end of each Fiscal Quarter of each Fiscal Year of the Parent, the Credit Parties’ unaudited consolidated balance sheet and related statements of income, retained earnings and changes in financial position as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year which includes such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Credit Parties on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;
(viii)	concurrently with the financial statements required pursuant to Sections 5.1(i), (ii), (iii), (iv), (v), (vi), and (vii) above, a certificate, signed by a Financial Officer, (a) stating that a review of such financial statements during the period covered thereby and of the activities of each Credit Party has been made under such Financial Officer’s supervision with a view to determining whether each Credit Party has fulfilled all of its obligations under this Agreement and the other Financing Documents, and (b) stating that each Credit Party has fulfilled its obligations under this Agreement and the other Financing

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	Documents and that all representations made in this Agreement continue to be true and correct as if made on the date of such certification (or specifying the nature of any change), except where such representation or warranty refers to a different date, or, if there shall be a Default or Event of Default, specifying the nature and status thereof and the relevant Credit Party’s proposed response thereto;
(ix)	promptly after the Parent or the Borrower learns of the occurrence of any event which constitutes a Default or an Event of Default, a certificate signed by a Responsible Officer, specifying such Default or Event of Default, together with a detailed statement specifying the nature thereof and the steps being taken to cure such Default or Event of Default; and
(x)	on or before the 90th day after each Fiscal Year ending on or after December 31, 2003, the Borrower’s calculation of Excess Cash Flow for the Fiscal Year then ended.

5.2      Existence; Conduct of Business. Each Credit Party will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence (subject only to Section 6.3).

5.3     Payment of Obligations. Each Credit Party will pay its obligations in respect of the Loans in accordance with their terms.

5.4     Books and Records; Inspection Rights. Each Credit Party will keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Credit Party will permit any representatives designated by the Administrative Agent, upon reasonable prior notice and during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (it being agreed that the aforementioned notice requirements and normal business hour restrictions shall not be applicable after the occurrence and continuation of a Default or an Event of Default, and after a Default or an Event of Default an individual Lender may designate its own representative to perform any such tasks); provided that, prior to a Default or an Event of Default, (i) any representative of a Lender who is not an employee of that Lender has established to the reasonable satisfaction of the Borrower and the Lenders that there is no inherent conflict of interest between the business and clientele of the Credit Parties and the business and clientele (other than the Lenders) of that representative, and (ii) the Lenders and their representatives shall not be entitled to take copies of (but may nevertheless examine) any portion of the books, accounts and records of the Credit Parties if allowing such copies to be taken would result in any Credit Party being in breach of any contractual or other legally binding obligation of confidentiality. All information provided or obtained pursuant to this Section 5.4 is subject to Section 9.12.

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5.5      Further Assurances. The Borrower will, and will cause each other Credit Party to, cure promptly any defects in the execution and delivery of the Financing Documents, including this Agreement. Upon request, the Borrower will, at its expense, as promptly as practical, execute and deliver to the Administrative Agent, all such other and further documents, agreements and instruments (and cause each other Credit Party to take such action) in compliance with or performance of the covenants and agreements of the Borrower or any other Credit Party in any of the Financing Documents, including this Agreement, or to further evidence and more fully describe the Collateral, or to correct any omissions in any of the Financing Documents, or more fully to state the security obligations set out herein or in any of the Financing Documents, or to publish, perfect, protect or preserve any Liens created pursuant to any of the Financing Documents, or to make any recordings, to file any notices, or obtain any consents, all as may be necessary or appropriate in connection therewith.

5.6      Additional Subsidiaries; Additional Liens. If any additional subsidiary is formed or acquired after the Effective Date (each such subsidiary, an “Additional Subsidiary”), the Parent and the Borrower will, within three Business Days after such subsidiary is formed or acquired, notify the Administrative Agent thereof and promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such subsidiary and with respect to any Equity Securities in or Indebtedness of such subsidiary owned by or on behalf of any Credit Party; provided that (i) any action otherwise necessary to satisfy the Collateral and Guarantee Requirement that is prohibited by applicable Law and not legally capable of being taken without the appropriate consents of Governmental Authorities need not be taken and (ii) in the event any consent or approval of a Governmental Authority necessary to satisfy the Collateral and Guarantee Requirement cannot reasonably be obtained prior to the expiration of the period referred to in clause (vi) of the definition thereof, the Parent and the Borrower shall, so long as they exercise commercially reasonable efforts to obtain such consent or approval from the time such Additional Subsidiary is acquired or formed, have an additional period of time, not to exceed 30 days after such acquisition or formation, to obtain such consent or approval.

ARTICLE 6

NEGATIVE COVENANTS

     From (and including) the Effective Date until the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

6.1      Indebtedness. The Borrower will not, and will not permit any Credit Party to, create, incur, assume or permit to exist any Indebtedness, except:

(a)	any Indebtedness created hereunder;
(b)	any Indebtedness created under the Tranche A Exit Facility Agreement;
(c)	any Indebtedness created under the Tranche B Credit Agreement, the First Notes or the Second Notes;

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(d)	Indebtedness existing on the date hereof and set forth in Schedule B and any extensions, renewals or replacements of any such Indebtedness so long as the terms and conditions of any such extension, renewal or replacement do not impose on any Credit Party any terms or conditions which are more onerous than the terms and conditions of the Indebtedness being extended, renewed or replaced except for changes in pricing resulting solely from changes in market conditions generally;
(e)	any Indebtedness of the Borrower to any other Credit Party and of any other Credit Party to the Borrower or any other Credit Party;
(f)	any Guarantee by any other Credit Party of Indebtedness of the Borrower or any other Credit Party;
(g)	any Indebtedness of any Credit Party incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Indebtedness secured by Purchase Money Liens and Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof, provided that (i) such Indebtedness is incurred prior to or within 30 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed $5,000,000 at any time outstanding;
(h)	any Indebtedness in respect of sight trade letters of credit in an aggregate amount not exceeding $5,000,000;
(i)	any Indebtedness in respect of judgments against any Credit Party that the Borrower has determined in good faith will be (and which are) stayed or discharged within 45 days of the rendering thereof;
(j)	any Indebtedness in respect of Swap Agreements;
(k)	other unsecured Indebtedness of the Borrower in an aggregate principal amount not exceeding $5,000,000 at any time;
(l)	any Permitted Subordinated Refinancing Debt; and
(m)	any other Indebtedness consented to by the Required Lenders.

     6.2      Liens. The Parent and the Borrower will not, and will not permit any other Credit Party to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by the Parent, the Borrower or any other Credit Party, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens.

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6.3      Fundamental Changes. The Parent and the Borrower will not, and will not permit any Credit Party to, merge into or amalgamate or consolidate with any other Person, or permit any other Person to merge into or amalgamate or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or any of the Equity Securities of any of the Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Subsidiary may amalgamate with the Borrower, (ii) any Subsidiary may amalgamate with any other Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve into the Borrower or another Credit Party if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and the Administrative Agent determines that such liquidation or dissolution is not disadvantageous to the Lenders, and (v) the Parent may amalgamate with the Pre-Filing Parent, as contemplated by Article 3 of the Plan of Arrangement; provided that any amalgamation pursuant to Sections 6.3(i), (ii) or (v) shall not be permitted unless the amalgamated corporation confirms to the Administrative Agent in writing that the amalgamated corporation is liable, by operation of law or otherwise, for the obligations of the Borrower under this Agreement. The Borrower will not, and will not permit any Credit Party to, engage to any material extent in any material business other that the Business.

ARTICLE 7
EVENTS OF DEFAULT

7.1      Events of Default. If any of the following events (“Events of Default”) shall occur:

(a)	the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, and such failure shall continue unremedied for a period of 30 days after such payment shall originally become due and payable;
(b)	the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) above) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of 30 days after such payment shall originally become due and payable;
(c)	any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in or in connection with any Financing Document or any amendment or modification thereof or waiver thereunder shall prove to have been incorrect when made or deemed to be made, or any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Financing Document or

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	any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed to be made;
(d)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.1(ix) (notices of Default or Events of Default), 5.2 (with respect to the Borrower’s existence) or in Article 6 (or in any comparable provision of any other Financing Document), and such failure shall continue for more than 90 days after written notice thereof from a Lender to the Borrower and the Administrative Agent;
(e)	the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clauses (a), (b) or (d) above) or any other Financing Document, and such failure shall continue unremedied for a period of 180 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);
(f)	any Credit Party:

(i)	becomes insolvent, or generally does not or becomes unable to pay its debts or meet its liabilities as the same become due, or admits in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, or proposes a compromise or arrangement between it and any class of its creditors;
(ii)	commits an act of bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an assignment of its property for the general benefit of its creditors under such Act, or makes a proposal (or files a notice of its intention to do so) under such Act;
(iii)	institutes any proceeding seeking to adjudicate it an insolvent, or except as permitted by Section 6.3, seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity, or files an answer admitting the material allegations of a petition filed against it in any such proceeding;
(iv)	applies for the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property; or

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(v) threatens to do any of the foregoing, or takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions described in this Section 7.1(f) or in Section 7.1(g), or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof,

(g) any petition is filed, application made or other proceeding instituted against or in respect of any Credit Party:

(i)	seeking to adjudicate it an insolvent;
(ii)	seeking a receiving order against it under the Bankruptcy and Insolvency Act (Canada);
(iii)	seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief under any federal, provincial or foreign Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy and Insolvency Act (Canada), the CCAA and any applicable corporations legislation) or at common law or in equity; or
(iv)	seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator or other similar official for it or any substantial part of its property;

	and such petition, application or proceeding continues undismissed, or unstayed and in effect, for a period of 60 days after the institution thereof, provided that if an order, decree or judgment is granted or entered (whether or not entered or subject to appeal) against any Credit Party thereunder in the interim, such grace period will cease to apply, and provided further that if any Credit Party files an answer admitting the material allegations of a petition filed against it in any such proceeding, such grace period will cease to apply;
(h)	any other event occurs which, under the Laws of any applicable jurisdiction, has an effect equivalent to any of the events referred to in either of Sections 7.1(f) or (g);
(i)	this Agreement, any other Financing Document or any material obligation or other provision hereof or thereof at any time for any reason terminates or ceases to be in full force and effect and a legally valid, binding and enforceable obligation of any Credit Party, is declared to be void or voidable or is repudiated, or the validity, binding effect, legality or enforceability hereof or thereof is at any time contested by any Credit Party, or any Credit Party denies that it has any or

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any further liability or obligation hereunder or thereunder or any action or proceeding is commenced to enjoin or restrain the performance or observance by any Credit Party of any material terms hereof or thereof or to question the validity or enforceability hereof or thereof, or at any time it is unlawful or impossible for the Credit Party to perform any of its material obligations hereunder or thereunder, except to the extent that any of the foregoing results directly from the gross negligence or wilful misconduct of the Administrative Agent or any Lender; or

(j)

if the Borrower fails to make any offer to prepay Loans required to be made by Section 2.2(b) of the Intercreditor Agreement, or if the Borrower fails to make a prepayment of Loans in the full amount required as a result of the acceptance of any such offer made pursuant to Section 2.2(b) of the Intercreditor Agreement, and such failure shall continue unremedied for a period of 30 days after such payment shall originally become due and payable;

then, and in every such event (other than an event with respect to the Borrower described in clause (f), (g) or (h) above), and at any time thereafter during the continuance of such event or any other such event, but subject always to the provisions of the Intercreditor Agreement, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind except as set forth earlier in this paragraph, all of which are hereby waived by the Borrower; and in the case of any event with respect to the Borrower described in clause (f), (g) or (h) above, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE 8
THE ADMINISTRATIVE AGENT

8.1     Appointment of Agent. Each Lender hereby designates JPMorgan Chase Bank, Toronto Branch, as Administrative Agent to act as herein specified and as specified in the other Financing Documents. Each Lender hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions of the Financing Documents and to exercise such powers and to perform such duties thereunder as are specifically delegated to or required of the Administrative Agent by the terms thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its agents or employees.

8.2     Limitation of Duties of Agent. The Administrative Agent shall have no duties or responsibilities except those expressly set forth with respect to the Administrative

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Agent in this Agreement and as specified in the other Financing Documents. Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or omitted by it as such hereunder or in connection herewith, unless caused by its or their gross negligence or wilful misconduct. The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have, by reason of this Agreement or the other Financing Documents, a fiduciary relationship in respect of any Lender. Nothing in this Agreement or the other Financing Documents, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement except as expressly set forth herein. The Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to this Agreement or the other Financing Documents unless it is requested in writing to do so by the Required Lenders.

8.3     Lack of Reliance on the Agent.

(a)

Independent Investigation. Independently, and without reliance upon the Administrative Agent, each Lender, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Credit Parties in connection with the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of the Credit Parties, and, except as expressly provided in this Agreement and the other Financing Documents, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the consummation of the Transactions or at any time or times thereafter.

(b)

Agent Not Responsible. The Administrative Agent shall not be responsible to any Lender for any recitals, statements, information, representations or warranties contained herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, collectibility, priority or sufficiency of this Agreement or the other Financing Documents or the financial condition of any Credit Party or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or the other Financing Documents, or the financial condition of any Credit Party, or the existence or possible existence of any Default or Event of Default.

8.4     Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Lenders or the Required Lenders (as the case may be) with respect to any act or action (including the failure to act) in connection with this Agreement or the other Financing Documents, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received written instructions from the Lenders or the Required Lenders, as applicable, and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement and

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the other Financing Documents in accordance with the instructions of the Required Lenders, or, to the extent required by Section 9.2, all of the Lenders.

8.5      Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or facsimile message, electronic mail, cablegram, radiogram, order or other documentary teletransmission or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

8.6      Indemnification of Agent. To the extent the Administrative Agent is not reimbursed and indemnified by the Borrower, each Lender will reimburse and indemnify the Administrative Agent, in proportion to its aggregate Applicable Percentage, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in performing its duties hereunder, in any way relating to or arising out of this Agreement or any other Financing Document, including all applicable Taxes to which the Administrative Agent may be subject in so performing or that are in any way so related; provided that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct.

8.7      The Agent in its Individual Capacities. With respect to its obligations under this Agreement and the Loans made by it, JPMorgan Chase Bank, Toronto Branch, in its capacity as a Lender hereunder, shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties, if any, specified herein; and the terms “Lenders” and “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include JPMorgan Chase Bank, Toronto Branch in its capacity as a Lender hereunder. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower or any affiliate of the Borrower as if it were not performing the duties, if any, specified herein, and may accept fees and other consideration from the Borrower for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

8.8     May Treat Lender as Owner. The Borrower and the Administrative Agent may deem and treat each Lender as the owner of the Loans recorded on the Register maintained pursuant to Section 9.4(b) for all purposes hereof until a written notice of the assignment or transfer thereof shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who at the time of making such request or giving such authority or consent is the owner of a Loan shall be conclusive and binding on any subsequent owner, transferee or assignee of such Loan.

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8.9      Successor Administrative Agent.

(a)

Administrative Agent Resignation. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, upon five Business Days’ notice to the Borrower, to appoint a successor Administrative Agent (who shall not be a non-resident of Canada within the meaning of the Income Tax Act), subject to the approval of the Borrower, such approval not to be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation then, upon five Business Days’ notice to the Borrower, the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent (subject to approval of the Borrower, such approval not to be unreasonably withheld), which shall be a financial institution organized under the laws of Canada having a combined capital and surplus of at least $500,000,000 or having a parent company with combined capital and surplus of at least $500,000,000.

(b)

Rights, Powers, etc. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.

8.10      Lenders to Enforce through Administrative Agent. Each Lender hereby acknowledges that, to the extent permitted by applicable Law, the Security Documents and the remedies provided thereunder to the Lenders are for the benefit of the Lenders collectively and acting together and not severally, and further acknowledges that each Lender’s rights hereunder and under the Security Documents are to be exercised collectively, not severally, by the Administrative Agent upon the decision of the Required Lenders. Accordingly, notwithstanding any of the provisions contained herein or in the Security Documents, each of the Lenders hereby covenants and agrees that it shall not be entitled to take any action hereunder or thereunder, including any declaration of default hereunder or thereunder, but that any such action shall be taken only by the Administrative Agent with the prior written agreement of the Required Lenders, provided that, notwithstanding the foregoing, in the absence of instructions from the Lenders (or the Required Lenders) and where in the sole opinion of the Administrative Agent the exigencies of the situation so warrant such action, the Administrative Agent may without notice to or consent of the Lenders (or the Required Lenders) take such action on behalf of the Lenders as it deems appropriate or desirable in the interests of the Lenders. Each Lender hereby further covenants and agrees that upon any such written consent being given by the Required Lenders, it shall co-operate fully with the Administrative Agent to the extent requested by the Administrative Agent, and each Lender further covenants and agrees that all proceeds from the

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realization of the Security Documents, to the extent permitted by applicable Law, are held for the benefit of all of the Lenders and shall be shared among the Lenders rateably in accordance with this Agreement, and each Lender acknowledges that all costs of any such realization (including all amounts for which the Administrative Agent is required to be indemnified under the provisions hereof) shall be shared among the Lenders rateably in accordance with this Agreement. Each Lender covenants and agrees to do all acts and things and to make, execute and deliver all agreements and other instruments, so as to fully carry out the intent and purpose of this Section and each Lender hereby covenants and agrees that it shall not seek, take, accept or receive any security for any of the obligations and liabilities of the Borrower hereunder or under the other Financing Documents, or any other document, instrument, writing or agreement ancillary hereto or thereto, other than such security as is provided hereunder or thereunder, unless all of the Lenders shall at the same time obtain the benefit of any such security or agreement, as the case may be.

8.11      Quebec Security. For greater certainty, and without limiting the powers of the Administrative Agent or the Collateral Agent, or any other Person acting as an agent or mandatary for such agents hereunder or under any of the other Financing Documents, the Borrower and the Parent hereby acknowledge that, for purposes of holding any security granted by any Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of the Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party, the Collateral Agent shall be the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Quebec) for all present and future Lenders, and in particular for all present and future holders of any such bond. Each Lender hereby: (i) irrevocably constitutes, to the extent necessary, the Collateral Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any other Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of Borrower or any other Credit Party under any bond issued by the Borrower or any other Credit Party; and (ii) appoints and agrees that the Administrative Agent may act as the bondholder and mandatary with respect to any bond that may be issued by the Borrower or any Credit Party and pledged in their favour from time to time. Each assignee of a Lender shall be deemed to have confirmed and ratified the constitution of the Collateral Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) and shall be deemed to have confirmed and ratified the constitution and the Administrative Agent as bondholder and mandatary with respect to any bond that may be issued by the Borrower or any Credit Party and pledged from time to time in their favour by the execution of an Assignment and Assumption.

Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), the Administrative Agent may acquire and be the holder of any bond issued by the Borrower or any other Credit Party (i.e. the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Credit Party). The Borrower and each Credit Party hereby acknowledge that such bond constitutes a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.

The Collateral Agent herein appointed as fondé de pouvoir shall have the same rights, powers and immunities as the Agents as stipulated herein, including under this Section 8 and Section 9,

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which shall apply mutatis mutandis. Without limitation, the provisions of Section 8.9 shall apply mutatis mutandis to the resignation and appointment of a successor Collateral Agent acting as fondé de pouvoir.

ARTICLE 9
MISCELLANEOUS

9.1      Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile in each case to the addressee, as follows:

(i)	if to the Borrower:
	MICROCELL SOLUTIONS INC. 800 de La Gauchetière Street West Suite 4000 Montreal, Quebec H5A 1K3 Attention:      Chief Financial Officer Facsimile:      514.846.6959
(ii)	if to the Administrative Agent or the Collateral Agent:
	JPMORGAN CHASE BANK, TORONTO BRANCH Suite 1800, South Tower Royal Bank Plaza 200 Bay Street, P.O. Box 80 Toronto, ON M5J 2J2 Attention:      Vice President, Corporate Finance Facsimile:      416.981.9128
(iii)	if to any Lender, to it at its address (or facsimile number) set forth opposite its name in the execution page(s) of this Agreement.

     (b)     Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communication to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

     (c)     Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All notices and other

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communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

9.2      Waivers; Amendments.

(a)

No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 9.2(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

(b)

Neither this Agreement nor any other Financing Document (or any provision hereof or thereof) may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the amount or extend the expiry date of any Loan of any Lender without the prior written consent of each Lender directly affected thereby, (ii) reduce the principal amount of any Loan or reduce the rate of interest or any fee applicable to any Loan without the prior written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable in respect thereof, or reduce the amount of, waive or excuse any such payment, without the prior written consent of each Lender directly affected thereby, (iv) change Section 2.9(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the prior written consent of each Lender directly affected thereby, (v) change any of the provisions of this Section 9.2 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the prior written consent of each Lender, or (vi) waive any Event of Default under Section 7.1 (f), (g) or (h) without the prior written consent of each Lender, or (vii) release any Credit Party from any material obligations under the Security Documents and other instruments contemplated by this Agreement or release or discharge any of the Liens arising under the Security Documents, in each case without the prior written consent of each Lender; and provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent without the prior written consent of the Administrative Agent. For greater certainty, the Administrative Agent may release and discharge the Liens constituted by the Security Documents to the extent necessary to enable

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the Borrower or any other Credit Party to complete any asset sale which is not prohibited by this Agreement or the other Financing Documents, and the Administrative Agent may agree to amend or waive Section 2.2 of the Intercreditor Agreement with the consent of the Required Lenders.

9.3     Expenses; Indemnity; Damage Waiver.

(a)

The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and all applicable Taxes, in connection with the syndication of the credit facilities provided for herein and the preparation and administration of this Agreement and the other Financing Documents, (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and applicable Taxes, in connection with any amendments, modifications or waivers of the provisions hereof or of any of the other Financing Documents, (whether or not the transactions contemplated hereby or thereby shall be consummated), and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent or any Lender and all applicable Taxes, in connection with the enforcement or protection of their rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)

The Borrower shall indemnify the Administrative Agent, the Collateral Agent and each Lender, as well as each Related Party and each assignee of any of the foregoing Persons (each such Person and each such assignee being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, cost recovery actions, damages, expenses and liabilities of whatsoever nature or kind and all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, travel expenses and reasonable fees, charges and disbursements of counsel) and all applicable Taxes to which any Indemnitee may become subject arising out of or in connection with (i) the execution or delivery of the Financing Documents or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder, and the consummation of the Transactions or any other transactions thereunder, (ii) any Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Credit Party, or any Environmental Liability related in any way to any Credit Party, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, (v) any other aspect of this Agreement

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	and the other Financing Documents, or (vi) the enforcement of any Indemnitee’s rights hereunder and any related investigation, defence, preparation of defence, litigation and enquiries, in each case regardless of whether or not the Transactions are consummated; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence (it being acknowledged that ordinary negligence does not necessarily constitute gross negligence) or wilful misconduct of or material breach of this Agreement by such Indemnitee. No Indemnitee shall be liable for any indirect or consequential damages in connection with its activities related to the Loans nor shall any Credit Party be liable for any indirect or consequential damages in connection with its activities related to the Loans.
(c)	To the extent that the Borrower fails to pay any amount required to be paid under Sections 9.3(a) or (b), each Lender severally agrees to pay to the Administrative Agent or the Collateral Agent (as applicable) such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent, in its capacity as such.
(d)	The Borrower shall not assert, and hereby waives (to the fullest extent permitted by applicable Law), any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Financing Document, or any agreement or instrument contemplated thereby, the Transactions, any Loan or the use of the proceeds thereof.
(e)	Any inspection of any property of any Credit Party made by or through the Administrative Agent or any Lender is for purposes of administration of this Agreement and the Financing Documents only, and neither the Borrower nor any other Credit Party is entitled to rely upon the same (whether or not such inspections are at the expense of the Borrower).
(f)	By accepting or approving anything required to be observed, performed, fulfilled or given to the Administrative Agent or the Lenders pursuant to the Financing Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Administrative Agent or the Lenders.
(g)	The relationship between the Borrower and the Administrative Agent and the Lenders is, and shall at all times remain, solely that of borrower and lenders. Neither the Administrative Agent nor the Lenders shall under any circumstance

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	be construed to be partners or joint venturers of the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a fiduciary relationship with the Borrower or its Affiliates, or to owe any fiduciary duty to the Borrower or its Affiliates. Neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to the Borrower or its Affiliates to select, review, inspect, supervise, pass judgment upon or inform the Borrower or its Affiliates of any matter in connection with their property or the operations of the Borrower or its Affiliates. The Borrower and its Affiliates shall rely entirely upon their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Administrative Agent or the Lenders in connection with such matters is solely for the protection of the Administrative Agent and the Lenders, and neither the Borrower nor any other Person is entitled to rely thereon.
(h)	The Administrative Agent and the Lenders shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of any Credit Party or their Affiliates and the Borrower hereby indemnifies and holds the Administrative Agent and the Lenders harmless on the terms set forth in Section 9.3(b) from any such loss, damage, liability or claim.
(i)	This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of the Borrower, the Administrative Agent and the Lenders in connection with the Loans, and is made for the sole benefit of the Borrower, the Administrative Agent and the Lenders, and their respective successors and permitted assigns. Except as provided in Sections 9.3(b) and 9.4, no other Person shall have any rights of any nature hereunder or by reason hereof.
(j)	All amounts due under this Section 9.3 shall be payable not later than three Business Days after written demand therefor.

9.4      Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b) Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender or any Lender Affiliate, the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed); provided further that the Borrower’s consent shall not be required with respect to any assignment made at any time after the occurrence and during the continuance of an Event of Default, (ii) except in the case of an assignment to a Lender or any Lender Affiliate, the aggregate amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date on which the Assignment and Assumption relating to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000, unless both the Borrower and the Administrative Agent otherwise consent in writing, and the amount held by each Lender after each such assignment shall not be less than the minimum assignable amount described in this section above, unless both the Borrower and the Administrative Agent otherwise consent in writing, (iii) each partial assignment in respect of any assigned Loans shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in respect of such Loans, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with (except in the case of an assignment by a Lender to an Affiliate of such Lender) a processing and recordation fee of $5,000, payable by the assigning Lender, (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, and (vi) the Borrower shall not incur any increased costs merely due to any such assignment including any obligation to make any payment under Section 2.8 that would exceed the amount payable to the assigning Lender. The Administrative Agent shall provide the Borrower and each Lender with written notice of any change in (or new) address of a Lender disclosed in an Administrative Questionnaire. Subject to acceptance and recording thereof pursuant to Section 9.4(c), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, shall have all of the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.6, 2.7 and 2.8 and 9.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.4 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 9.4(d). The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in Toronto, Ontario a copy of each Assignment and Assumption delivered to it and a register for the

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	recordation of the names and addresses of the Lenders and the principal amount of the Loans owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(c)	Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 9.4(b) and any written consent to such assignment required by Section 9.4(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in Section 9.4(b).
(d)	Any Lender may, without notice to the Borrower or the consent of the Borrower or the Administrative Agent, sell participations to one or more Persons (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Financing Documents (including all or a portion of the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.2(b) that affects such Participant. Subject to Section 9.4(e), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.6, 2.7 and 2.8 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 9.4(d). To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.8 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.9(c) as though it were a Lender.
(e)	A Participant shall not be entitled to receive any greater payment under Section 2.6 or 2.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written

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	consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.8 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.8(e) as though it were a Lender.
(f)	Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and Section 9.4 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g)	Any assignment or grant of a participation pursuant to Section 9.4 shall constitute neither a repayment by the Borrower to the assigning or granting Lender of any Loan included therein, nor a new advance of any such Loan to the Borrower by such Lender or by the assignee or Participant, as the case may be. The parties acknowledge that the Borrower’s obligations hereunder with respect to any such Loans will continue and will not constitute new obligations as a result of such assignment or participation.

9.5      Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid. Sections 2.6, 2.7 or 2.8 and 9.3 and Article 8 shall survive and remain in full force and effect, regardless of the consummation of the Transactions, the repayment of the Loans or the termination of this Agreement or any provision hereof.

9.6     Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Financing Documents and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed original or faxed counterpart of a signature page

- 54 -

of this Agreement by facsimile shall be as effective as delivery of a manually executed original counterpart of this Agreement.

9.7      Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.8     Right of Set Off. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, but subject always to the provisions of the Intercreditor Agreement, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set off) which such Lender may have.

9.9      Governing Law; Jurisdiction; Consent to Service of Process.

(a)	This Agreement shall be construed in accordance with and governed by the Laws of the Province of Ontario.
(b)	The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the Courts of the Province of Ontario, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement, or any other Financing Document or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in Ontario. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Financing Document against the Borrower or its properties in the courts of any other jurisdiction.
(c)	The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9.9(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Law, any forum non conveniens defence to the maintenance of such action or proceeding in any such court.

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(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

9.10     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FINANCING DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

9.11      Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.12      Confidentiality. The Administrative Agent, the Collateral Agent and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to each of their Affiliates, directors, officers, employees, agents and advisors, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or other Governmental Authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Financing Document or any suit, action or proceeding relating to any Financing Document or the enforcement of rights thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or prospective assignee of or Participant in any of its rights or obligations under this Agreement, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section, or (ii) becomes available to the Administrative Agent, the Collateral Agent or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower, any of its subsidiaries, or their respective business, other than any such information that is available to the Administrative Agent, the Collateral Agent or any Lender on a non-confidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified as confidential in writing at the time of delivery.

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Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

[Balance of page intentionally left blank; signature pages follow.]

S 1 TRANCHE C CREDIT AGREEMENT

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWER	PARENT
MICROCELL SOLUTIONS INC.	MICROCELL TELECOMMUNICATIONS INC.
By:
	By:
By:
	By:

AGENTS

JPMORGAN CHASE BANK TORONTO

BRANCH, as Administrative Agent under the

Tranche C Credit Agreement, and as Collateral

Agent

By:

By:

2

TRANCHE C LENDERS
	Address:  (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:	Postal/Zip Code:
	Country:
By:	Contact:
Name:	Phone:
Title:	Fax:
	E-mail:

SCHEDULE A

LENDERS LOANS

Lender		Canadian Dollars
Holders of Pre-Filing Hedging Obligations
JPMorgan Chase Bank		$	806,316
Holders of Pre-Filing Loans
JPMorgan Chase Bank		$	404,164
Credit Suisse First Boston, Cayman Island Branch		$	2,653,875
Wayland Recovery Fund, LLC		$	1,795,060
GE VFS Canada Limited Partnership		$	5,425,281
Bank of America, N.A., Canada Branch		$	3,804,475
Caisse de Depot et Placement du Quebec		$	1,929,806
Dresdner Bank AG, New York and Grand Cayman Branches		$	600,000
Skandinaviska Enskilda Banken AB		$	9,251,463
Swedbank ForeningsSparbanken AB		$	5,608,046
KZH CypressTree-1 LLC		$	3,935,959
KZH ING-2 LLC		$	2,111,835
KZH Sterling LLC		$	1,050,967
Archimedes Funding III, Ltd.		$	1,055,917
Archimedes Funding IV (Cayman), Ltd.		$	211,183
ING-Oryx CLO, Ltd.		$	527,959
SEQUILS Centurion V. Ltd.		$	1,052,947
Toronto Dominion (New York)		$	1,055,917
Centurion CDO I, Limited		$	422,367
Centurion CDO II, Ltd.		$	1,055,917
Centurion CDO III, Limited		$	422,367
Merrill Lynch Canada Inc.		$	1,929,806
Merrill Lynch, Pierce, Fenner, & Smith Inc.		$	69,065
Nemean CLO, Ltd.		$	838,794
Alliance Capital Funding, L.L.C.		$	1,176,381
KS Capital Partners, LP		$	331,685
KS International, Inc.		$	88,702
Aspen Partners LP		$	353,048
Savitz Management LLC		$	30,696
	Total	$	50,000,000

SCHEDULE B

DISCLOSED MATTERS

[Note: The numbers in parentheses denote the provision of the Credit Agreement
which refers to this Schedule B.]

Governmental Approvals (3.3)

1. None

Subsidiaries (3.5)

1.	2861399 Canada Inc. (Pre-Filing Parent and wholly-owned subsidiary of Microcell Telecommunications Inc.)
2.	Inukshuk Internet Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)
3.	Telcom Investments Inc. (wholly-owned subsidiary of Borrower and Unrestricted Subsidiary)

Indebtedness for Borrowed Money (4.1(k), 6.1(d))

1.	Tranche B Credit Agreement.
2.	Tranche A Exit Facility Agreement.
3.	First Preferred Shares.
4.	Second Preferred Shares.
5.	First Notes (if issued).
6.	Second Notes (if issued).

Liens (6.2)

1.	Act of Movable Hypothec on a commercial paper of $3,000,000 dated May 28, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
2.	Act of Movable Hypothec on a commercial paper of $1,000,000 dated October 17, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.
3.	Act of Movable Hypothec on a commercial paper of $337,000 dated October 23, 2002 with the Bank of Montreal to guarantee the issuance of letters of credit.

The Pre-Filing Parent and the Borrower have also entered into a number of commercial leases for various automobile vehicles and office equipment. These leases are true leases as opposed to capital leases. Therefore the vehicles and equipment leased do not form part of the Pre-Filing Parent or the Borrower property and assets and are not capitalized in their balance sheet. The following is a summary description of these leases.

2

4.     Commercial Lease Agreements with Location Fortier Inc. and Deragon Leasing Inc. concerning 78 vehicles for two, three and four year terms.

5.     Commercial Lease Agreements with IBM Canada Ltd., CIT Financial services, Pitney Bowes Leasing a division of Pitney Bowes Canada Ltd., Minolta (Montreal) Inc. and Contract Funding Group and Panasonic concerning office photocopiers and fax.

6.     Commercial lease Agreements with various automobile leasing companies concerning 44 vehicles used by employees as part of their employee benefits.

Existing Investments (6.4)

1.	Long term investments (Shares or Units)
	Canadian LNP Consortium Inc. (owned by Borrower)
	Canadian Numbering Administration Consortium Inc. (owned by Borrower) Canadian Portable Contribution Consortium Inc. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Pre-Filing Parent)
	Les placements Microcell Capital, S.E.N.C. (owned by Borrower)
	Telcom Management Limited Partnership (owned by Borrower and Pre-Filing Parent)
	Telcom Investments Inc. (owned by Borrower)
	Saraide, Inc. (owned by Borrower)
	Argo II - The Wireless Internet Fund Limited Partnership (owned by Borrower)
	Oz Communications, Inc. (owned by Borrower)
	GSM Capital Limited Partnership (owned by Borrower and Pre-Filing Parent)
2.	Other short term instruments in the form of marketable securities, which constitute Permitted Investments, are contained in the investments accounts of the Borrower, the Parent and the Pre-Filing Parent.

EXHIBIT A

FORM OF
ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Credit Agreement (including any letters of credit and guarantees included in such Credit Agreement) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate of [identify Lender]]
3.	Borrower:	Microcell Solutions Inc.
4.	Administrative Agent:	JPMorgan Chase Bank, Toronto Branch, as the administrative agent under the Credit Agreement
5.	Credit Agreement:	The Cdn.$50,000,000 Credit Agreement dated as of May 1, 2003 among Microcell Solutions Inc., as Borrower, Microcell

-2-

Telecommunications Inc., as Parent, the Lenders parties thereto, and JPMorgan Chase Bank, Toronto Branch, as Administrative Agent and Collateral Agent.

     6.     Assigned Interest:

Aggregate Amount of	Amount of Loans	Percentage Assigned
Loans for all Lenders	Assigned	of Loans 1
$	$		%

Effective Date:                       , 20              [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:

Title:

¹ Set forth, to at least 9 decimals, as a percentage of the Loans of all Lenders thereunder.

2

-3-

Consented to and Accepted: ²

JPMORGAN CHASE BANK, TORONTO BRANCH, as
Administrative Agent

By

Title:

Consented to: ³

MICROCELL SOLUTIONS INC.

By

Title:

² Not required with respect to any assignment to a Lender or an Affiliate of a Lender.

³ Not required at any time after and during the occurrence of an Event of Default. Not required with respect to any assignment to a Lender or a Lender Affiliate.

3

ANNEX 1

MICROCELL TRANCHE C CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

     1.     Representations and Warranties.

     1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby, including the payment to the Administrative Agent of a processing and recordation fee of Cdn.$5,000, pursuant to Section 9.4(b) of the Credit Agreement (except in the case of an assignment to an Affiliate of the Assignor); and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Financing Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Financing Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Financing Document.

     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Financing Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Documents are required to be performed by it as a Lender.

-2-

     2.     Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrued subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for the periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

     3.     General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

2

TRANCHE “C” CREDIT AGREEMENT

dated as of

May 1, 2003

among

MICROCELL SOLUTIONS INC.

as Borrower,

MICROCELL TELECOMMUNICATIONS INC.

as Parent and Guarantor,

THE LENDERS FROM TIME TO TIME PARTIES HERETO

as Lenders

and

JPMORGAN CHASE BANK TORONTO BRANCH

as Administrative Agent and Collateral Agent

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS		2
1.1	Defined Terms		2
1.2	Terms Generally		16
1.3	Accounting Terms; GAAP		17
1.4	Time		17
1.5	Permitted Liens		17
1.6	Schedules and Exhibits		17
ARTICLE 2	LOANS		18
2.1	Loans		18
2.2	Interest		18
2.3	Repayment of Loans		19
2.4	Evidence of Debt		19
2.5	Prepayments of Loans; Payments Pursuant to Other New Instruments		20
2.6	Increased Costs; Illegality		21
2.7	Break Funding Payments		22
2.8	Taxes		22
2.9	Payments Generally; Pro Rata Treatment; Sharing of Set-offs		23
2.10	Currency Indemnity		25
2.11	Mitigation Obligations; Replacement of Lenders		25
2.12	Indemnity for Returned Payments		26
2.13	Existing Security		26
ARTICLE 3	REPRESENTATIONS AND WARRANTIES		27
3.1	Organization; Powers		27
3.2	Authorization; Enforceability		27
3.3	Governmental Approvals; No Conflicts		27
3.4	Financial Condition		27
3.5	Subsidiaries		28
3.6	Fiscal Year		28
3.7	Security Interests		28
ARTICLE 4	CONDITIONS		28

-i-

TABLE OF CONTENTS
(continued)

		Page
4.1	Conditions Precedent to Effectiveness of Agreement		28
ARTICLE 5	AFFIRMATIVE COVENANTS		31
5.1	Financial Statements and Other Information		31
5.2	Existence; Conduct of Business		34
5.3	Payment of Obligations		34
5.4	Books and Records; Inspection Rights		34
5.5	Further Assurances		35
5.6	Additional Subsidiaries; Additional Liens		35
ARTICLE 6	NEGATIVE COVENANTS		35
6.1	Indebtedness		36
6.2	Liens		37
6.3	Fundamental Changes		37
ARTICLE 7	EVENTS OF DEFAULT		37
7.1	Events of Default		37
ARTICLE 8	THE ADMINISTRATIVE AGENT		41
8.1	Appointment of Agent		41
8.2	Limitation of Duties of Agent		41
8.3	Lack of Reliance on the Agent		41
8.4	Certain Rights of the Administrative Agent		42
8.5	Reliance by Administrative Agent		42
8.6	Indemnification of Agent		42
8.7	The Agent in its Individual Capacities		42
8.8	May Treat Lender as Owner		43
8.9	Successor Administrative Agent		43
8.10	Lenders to Enforce through Administrative Agent		43
8.11	Quebec Security		44
ARTICLE 9	MISCELLANEOUS		45
9.1	Notices		45
9.2	Waivers; Amendments		46
9.3	Expenses; Indemnity; Damage Waiver		47

-ii-

TABLE OF CONTENTS
(continued)

		Page
9.4	Successors and Assigns		50
9.5	Survival		52
9.6	Counterparts; Integration; Effectiveness		53
9.7	Severability		53
9.8	Right of Set Off		53
9.9	Governing Law; Jurisdiction; Consent to Service of Process		53
9.10	WAIVER OF JURY TRIAL		54
9.11	Headings		54
9.12	Confidentiality		54

-iii- EX-4.4 13 m10142orexv4w4.htm EX-4.4

Exhibit 4.4

Microcell Solutions Inc.

as Borrower;

Microcell Telecommunications Inc.

as Parent;

JPMorgan Chase Bank, Toronto Branch

as Collateral Agent and Administrative Agent;

Each of the persons listed on the

execution pages hereto under the “Tranche A Lenders” heading

as Tranche A Lenders;

Each of the persons listed on the

execution pages hereto under the “Tranche B Lenders” heading

as Tranche B Lenders;

Each of the persons listed on the

execution pages hereto under the “Tranche C Lenders” heading

as Tranche C Lenders

Computershare Trust Company of Canada

as Trustee for the holders of First Units

Computershare Trust Company of Canada

as Trustee for the holders of Second Units

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

Dated as of May 1, 2003

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

          THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT, dated as of May 1, 2003, is made among MICROCELL SOLUTIONS INC., as borrower (the “Borrower”), MICROCELL TELECOMMUNICATIONS INC., as guarantor (the “Parent”), EACH OF THE PERSONS LISTED ON THE EXECUTION PAGES HERETO under the “Tranche A Lenders” heading (such Persons, together with any other Person which becomes a lender under the Tranche A Exit Facility Agreement, being the “Tranche A Lenders”), EACH OF THE PERSONS LISTED ON THE EXECUTION PAGES HERETO under the “Tranche B Lenders” heading (such Persons, together with any other Person which becomes a lender under the Tranche B Credit Agreement, being the “Tranche B Lenders”), EACH OF THE PERSONS LISTED ON THE EXECUTION PAGES HERETO under the “Tranche C Lenders” heading (such Persons, together with any other Person which becomes a lender under the Tranche C Credit Agreement, being the “Tranche C Lenders”; the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders being referred to collectively as the “Creditors”), JPMORGAN CHASE BANK, TORONTO BRANCH, as administrative agent (in those capacities, the Administrative Agent”) under the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement (each as defined below), JPMORGAN CHASE BANK, TORONTO BRANCH, as collateral agent for each of the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders (in such capacity, the “Collateral Agent”) and as fondé de pouvoir pursuant to the terms of the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement (in such capacity, the “Fondé de Pouvoir”), COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee for the holders of the First Units, and COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee for the holders of the Second Units.

INTRODUCTORY STATEMENTS:

A.     Pursuant to the Plan of Arrangement and the Sanction Order (each as defined below), through a series of transactions, Microcell Connexions Inc. and Microcell Solutions Inc. (the “Pre-Filing Borrowers”) and Microcell Telecommunications Inc. (the “Pre-Filing Parent”) have completed a reorganization, with the result that certain obligations of the Pre-Filing Borrowers and the Pre-Filing Parent under various credit facilities have become the obligations of the Borrower and the Parent, respectively;

B.     The Borrower, the Parent, the Tranche A Lenders, the Administrative Agent and the Collateral Agent have entered into a credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Tranche A Exit Facility Agreement”), dated as of the date hereof, pursuant to which (i) the Tranche A Lenders have established secured revolving credit facilities in favour of the Borrower in the principal amount of Cdn.$25,000,000, and (ii) the Borrower may incur, through one or more transactions, Permitted Additional Exit Facility Debt (as defined below), to be effected through an increase in the aggregate commitments of the Tranche A Lenders thereunder;

C.     The Borrower, the Parent, the Tranche B Lenders, the Administrative Agent and the Collateral Agent have entered into a credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Tranche B Credit Agreement”), dated as of the date hereof, pursuant to which Cdn.$300,000,000 principal amount of the obligations of the Pre-

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Filing Borrowers and the Pre-Filing Parent to the Tranche B Lenders have been restructured as secured non-revolving loans to the Borrower on the terms and conditions set forth therein;

D.     The Borrower, the Parent, the Tranche C Lenders, the Administrative Agent and the Collateral Agent have entered into a credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Tranche C Credit Agreement”), dated as of the date hereof, pursuant to which Cdn.$50,000,000 principal amount of the obligations of the Pre-Filing Borrowers and the Pre-Filing Parent to the Tranche C Lenders have been restructured as secured non-revolving loans to the Borrower on the terms and conditions set forth therein;

E.     The Borrower, the Parent, the Pre-Filing Parent and their subsidiaries (other than Unrestricted Subsidiaries) have provided, or have agreed to provide, security over their assets to secure the obligations of the Borrower and the Parent to the Creditors, the Administrative Agent and the Collateral Agent under the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement, and the Tranche C Credit Agreement (collectively, the “New Debt Instruments”);

F.     The purpose of this Agreement is to set forth the relative priorities of the various creditors which are parties hereto and the terms and conditions under which the Collateral Agent will be appointed as collateral agent on behalf of each of the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders, and will hereafter hold the security provided by the Borrower, the Parent or any of their subsidiaries and, if necessary, exercise rights and remedies in respect of such security on behalf of, and for the benefit of, the Creditors;

          Now Therefore this Agreement Witnesses that, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, the parties hereto agree with each other as follows:

ARTICLE 1

INTERPRETATION

1.1     Definitions. In this Agreement, the following defined terms will have the following meanings:

          “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, such Person.

          “Agents” means the Administrative Agent and the Collateral Agent.

          “Asset Disposition” means, with respect to any Credit Party, the sale, lease, license, transfer, assignment or other disposition of, or the expropriation, condemnation, destruction or other loss of, all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one transaction or a series of transactions (including a sale/leaseback transaction), other than (a) inventory sold in the ordinary course of business upon customary credit terms, (b) sales of scrap or obsolete material or equipment which are not material in the aggregate, (c) sales or other dispositions of assets which are not in the ordinary course of business or leases of real property or personal property (under which a Credit Party is lessor), in any such case, which have a Fair Market Value less than

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Cdn.$2,000,000 for any transaction and less than Cdn.$2,000,000 for all such transactions in any Fiscal Year and which are no longer used or useful in the business, (d) licenses granted to third parties in the ordinary course of business, (e) property sold to any other Credit Party, and (f) any other disposition consented to by the “Required Lenders” under the Tranche B Credit Agreement. In the case of an expropriation, condemnation, destruction or other loss of any property, any insurance proceeds or other indemnity received as a result of such event may be used by the Credit Party within the 90-day period following the receipt of such insurance proceeds or other indemnity to replace the property so disposed of and such sale or disposition will not constitute an Asset Disposition.

          “Business Day” means any day, other than a Saturday or Sunday, on which banks are generally open for business in Toronto, Ontario, Montreal, Quebec, and New York City, U.S.A.

          “Capital Expenditures” means, for any period, all expenditures (whether paid in cash or accrued as a liability, including the portion of Capital Lease Obligations originally incurred during such period that are capitalized) during such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or equipment” or comparable items, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, in an amount not exceeding any insurance proceeds received in connection with such destruction or damage.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Collateral” means the property which is charged by or hypothecated under the Security Documents, and includes all property, rights and assets, present and future of the Borrower, the Parent and those subsidiaries of the Borrower or the Parent which have provided or may hereafter provide security to the Collateral Agent (or to any trustee or “fondé de pouvoir” for or on behalf of the Collateral Agent and/or the Creditors) to secure the Obligations (or any of them) to the Creditors.

          “Control” means, in respect of a particular Person, 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 ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Credit Party” means the Parent, the Borrower, each of the Subsidiaries, and any other Person which is a party to a Financing Document (other than the Administrative Agent, the Collateral Agent, the Creditors, any other agent, or trustee or “fondé de pouvoir” of or for the Creditors under any of the New Debt Instruments, and their respective successors and assigns) but, for greater certainty, does not include any Unrestricted Subsidiary.

          “Default” means an “Event of Default” under any of the New Debt Instruments.

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          “ECF EBITDA” means operating income (loss) plus, to the extent deducted in calculating operating income (loss), non-cash restructuring charges, impairment of intangible assets, depreciation and amortization, all as calculated in accordance with GAAP.

          “Effective Date” means the “Effective Date” under, and as defined in, the Plan of Arrangement.

          “Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.

          “Excess Cash Flow” means, for the Credit Parties for any Fiscal Year, consolidated ECF EBITDA of the Credit Parties for such period minus the sum (without duplication) of (i) scheduled principal payments made by the Credit Parties during such Fiscal Year under the Tranche B Credit Agreement, and scheduled principal payments made by the Credit Parties during such Fiscal Year under the Tranche C Credit Agreement, to the extent such payments are permitted by this Agreement, (ii) principal payments made by the Credit Parties during such Fiscal Year under the Tranche A Exit Facility Agreement (including under any Permitted Additional Exit Facility Debt), to the extent that such payments result in a corresponding decrease in the commitment amounts under the Tranche A Exit Facility Agreement, (iii) the principal portion of scheduled payments made by the Credit Parties during such Fiscal Year on Capital Lease Obligations to the extent such Capital Lease Obligations and payments are permitted by the Tranche A Exit Facility Agreement and the Tranche B Credit Agreement, (iv) cash interest paid by the Credit Parties in respect of such Fiscal Year, (v) cash taxes applicable to such Fiscal Year paid or payable by the Credit Parties prior to the date of determination, and (vi) Capital Expenditures made by the Credit Parties during such Fiscal Year to the extent permitted by the Tranche A Exit Facility Agreement and the Tranche B Credit Agreement.

          “Fair Market Value” means (a) with respect to any asset or group of assets (other than a marketable security) at any date, the value of the consideration obtainable in a sale of such asset at such date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal, and (b) with respect to any marketable security at any date, the closing sale price of such marketable security on the Business Day next preceding such date, or, if there is no such closing sale price of such marketable security, the final price for the purchase of such marketable security at face value quoted on such business day by a financial institution of recognized standing selected by the Collateral Agent which regularly deals in securities of such type.

          “Financing Documents” means the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement, the Tranche C Credit Agreement and the Security Documents.

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          “First Notes” means the First Notes forming part of the First Units.

          “First Preferred Shareholder/Unitholder” means a holder of First Preferred Shares or First Units.

          “First Preferred Shareholder/Unitholder Obligations” means all debts, obligations and liabilities, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time owing by the Parent to the holders of First Preferred Shares or First Units or remaining unpaid by the Parent to the holders of First Preferred Shares or First Units.

          “First Preferred Shares” means the First Preferred Shares in the capital of the Parent.

          “First Units” means the First Units which may be issued upon a redemption of the First Preferred Shares.

          “First Units Trustee” means Computershare Trust Company of Canada as trustee for the holders of the First Units issued pursuant to that First Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent, and any successor thereof.

          “Fiscal Year” means any fiscal year of the Borrower.

          “GAAP” means generally accepted accounting principles in Canada as in effect from time to time.

          “Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, security interest, royalty interest, adverse claim, defect of title or right of set off in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease, title retention agreement or consignment agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to any asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, (d) any netting arrangement, defeasance arrangement or reciprocal fee arrangement, and (e) any other arrangement having the effect of providing security.

          “Mandatory Prepayments” means payments to be made to Creditors pursuant to Section 2.2 with proceeds from Excess Cash Flow, Asset Dispositions or the sale or issuance of Equity Securities.

          “Net Proceeds” means, (a) with respect to any Asset Disposition, the gross amount received by the Credit Parties from such Asset Disposition, including proceeds of any insurance policies received by the Credit Parties in connection with such Asset Disposition and amounts received by the Credit Parties pursuant to any expropriation proceeding or condemnation proceeding in connection with such Asset Disposition, minus the sum of (i) the amount, if any, of all Taxes paid or payable by the Credit Parties directly resulting from such Asset Disposition (including the amount, if any, estimated by the relevant Credit Party in good faith at the time of such Asset Disposition for Taxes payable by the Credit Parties on or measured by net income or gain resulting from such Asset Disposition, taking into account any Tax losses or credits available or to be available to the Credit Parties at the time such Taxes are

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payable that are not used to offset other income or gains), and (ii) the reasonable out-of-pocket costs and expenses incurred by the Credit Parties in connection with such Asset Disposition (including reasonable brokerage commissions and customary fees and expenses of counsel, investment bankers and other advisors paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties), and (b) with respect to any issuance of Equity Securities, the gross amount received by the Credit Parties from such issuance of Equity Securities, minus the reasonable out-of-pocket costs and expenses incurred by the Credit Parties in connection with such issuance of Equity Securities (including reasonable legal, underwriting and brokerage fees and expenses paid to a Person other than an Affiliate of the Credit Parties, but excluding any fees or expenses paid to an Affiliate of the Credit Parties). For greater certainty, the Net Proceeds in respect of the issuance of Equity Securities by a Credit Party to another Credit Party shall be nil.

          “New Debt Instruments” is defined in Introductory Statement E.

          “Obligations” means, collectively, the Tranche A Obligations, the Tranche B Obligations, the Tranche C Obligations, the First Preferred Shareholder/Unitholder Obligations and the Second Preferred Shareholder/Unitholder Obligations.

          “Permitted Additional Exit Facility Debt” means secured indebtedness, in an aggregate principal amount not exceeding an amount equal to Cdn.$75,000,000 less the principal amount under the Tranche A Exit Facility Agreement on the Effective Date, incurred by the Borrower at any time after the Effective Date, by way of an increase in the “Commitments” under the Tranche A Exit Facility Agreement.

          “Person” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof).

          “Plan of Arrangement” means the plan of reorganization and of compromise and arrangement by, inter alia, the Pre-Filing Borrowers and the Pre-Filing Parent pursuant to the Companies Creditors’ Arrangement Act (Canada) and the Canada Business Corporations Act approved pursuant to the Sanction Order, as such plan of reorganization and of compromise and arrangement may be modified, supplemented or amended in accordance with its terms.

          “Pro Rata Share” means (a) in the case of a Tranche A Lender, the proportion which the Tranche A Obligations of such Tranche A Lender bears to the aggregate Tranche A Obligations, (b) in the case of a Tranche B Lender, the proportion which the Tranche B Obligations of such Tranche B Lender bears to the aggregate Tranche B Obligations, (c) in the case of a Tranche C Lender, the proportion which the Tranche C Obligations of such Tranche C Lender bears to the aggregate Tranche C Obligations, (d) in the case of a First Preferred Shareholder/Unitholder, the proportion which the First Preferred Shares or First Units of such First Preferred Shareholder/Unitholder bears to the aggregate number of First Preferred Shares or First Units, (e) in the case of a Second Preferred Shareholder/Unitholder, the proportion which the Second Preferred Shares or Second Units of such Second Preferred Shareholder/Unitholder bears to the aggregate number of Second Preferred Shares or Second Units, and (f) in the case of any Creditor, the proportion which the aggregate Obligations of such Creditor bears to the aggregate Obligations. For the purposes of this definition of “Pro Rata Share” and other related

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definitions herein, the amount of the Obligations of any Tranche A Swap Counterparty will be, as at the date of determination, (a) in the case of all Swap Agreements which have not been terminated, the total amount which the Borrower would be obligated to pay to the applicable Tranche A Swap Counterparty under such Swap Agreements with the Borrower in the event of the early termination by such Tranche A Swap Counterparty as of such date of such Swap Agreements as a result of the occurrence of a default or event of default (however specified or designated thereunder), and (b) in the case of all Swap Agreements which have been terminated, the total amount which the Borrower is obligated to pay to the applicable Tranche A Swap Counterparty under such Swap Agreements with the Borrower.

          “Proceeds of Realization” means all cash and non-cash proceeds derived from any sale, disposition or other realization of the Collateral upon the enforcement of any of the Security Documents and any payment or other consideration received by any Creditor on account of any of the Obligations after the commencement of enforcement of any of the Security Documents.

          “Receiver” means a receiver, receiver and manager, interim receiver or other person having similar powers or authority appointed under any of the Security Documents or by a court in respect of any of the Collateral.

          “Required Creditors” means (a) at any time when the Tranche A Exit Facility Agreement remains in effect, the “Required Lenders” under the Tranche A Exit Facility Agreement, (b) at any time when the Tranche A Exit Facility Agreement no longer remains in effect but amounts remain outstanding under the Tranche B Credit Agreement, the “Required Lenders” under the Tranche B Credit Agreement, and (c) at any time when the Tranche A Exit Facility Agreement no longer remains in effect and no amounts remain outstanding under the Tranche B Credit Agreement, the “Required Lenders” under the Tranche C Credit Agreement.

          “Sanction Order” means the final order of the Quebec Superior Court, dated March 18, 2003, sanctioning the Plan of Arrangement, as such order may be amended, modified or supplemented from time to time.

          “Second Notes” means the Second Notes forming part of the Second Units.

          “Second Preferred Shareholder/Unitholder” means a holder of Second Preferred Shares or Second Units.

          “Second Preferred Shareholder/Unitholder Obligations” means all debts, obligations and liabilities, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time owing by the Parent to the holders of Second Preferred Shares or Second Units or remaining unpaid by the Parent to the holders of Second Preferred Shares or Second Units.

          “Second Preferred Shares” means the Second Preferred Shares in the capital of the Parent.

          “Second Units” means the Second Units which may be issued upon a redemption of the Second Preferred Shares.

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          “Second Units Trustee” means Computershare Trust Company of Canada, as trustee for the holders of the Second Units issued pursuant to that Second Unit Indenture dated May 1, 2003 between Computershare Trust Company of Canada and the Parent, and any successor thereof.

          “Security Documents” means the Tranche A Security Documents, the Tranche B Security Documents and the Tranche C Security Documents.

          “Senior Creditors” means, (a) with respect to the Tranche B Lenders, the Tranche A Lenders, and (b) with respect to the Tranche C Lenders, the Tranche A Lenders and the Tranche B Lenders.

          “Standstill Event” means (a) at any time when the Tranche A Exit Facility Agreement remains in effect, the provision by the Administrative Agent under the Tranche A Exit Facility Agreement to the Borrower, the Administrative Agent under the Tranche B Credit Agreement, and the Administrative Agent under the Tranche C Credit Agreement, of a notice that a Default has occurred and is continuing under the Tranche A Exit Facility Agreement, or (b) at any time when the Tranche A Exit Facility Agreement no longer remains in effect but amounts remain outstanding under the Tranche B Credit Agreement, the provision by the Administrative Agent under the Tranche B Credit Agreement to the Borrower and the Administrative Agent under the Tranche C Credit Agreement, of a notice that a Default has occurred and is continuing under the Tranche B Credit Agreement.

          “Subordinate Creditors” means (a) with respect to the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders, and (b) with respect to the Tranche B Lenders, the Tranche C Lenders.

          “Subordinate Obligations” means Obligations in favour of Subordinate Creditors.

          “Subsidiary” has the meaning given in the Tranche B Credit Agreement.

          “Swap Agreement” has the meaning given in the Tranche A Exit Facility Agreement.

          “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, unemployment insurance payments and workers’ compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties with respect thereto, imposed by any governmental authority (including federal, state, provincial, municipal and foreign governmental authorities), and whether disputed or not.

          “Tranche A Obligations” means all debts, obligations and liabilities, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time owing by the Borrower to (a) the Tranche A Lenders or remaining unpaid by the Borrower pursuant to the Tranche A Exit Facility Agreement, including pursuant to any Permitted Additional Exit Facility

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Debt, and (b) any Tranche A Swap Counterparty pursuant to any Swap Agreement with such Tranche A Swap Counterparty.

          “Tranche A Security Documents” means (a) the documents and instruments pursuant to which any of the Credit Parties which have provided security to the Collateral Agent (or to any fondé de pouvoir (person holding the power of attorney) for or on behalf of the Collateral Agent and/or the Tranche A Lenders and any Tranche A Swap Counterparty) has granted security, or may in the future grant security, over all or any portion of its assets to secure the Tranche A Obligations, and (b) any other document or instrument executed by any other Person which is intended to provide further security to the Tranche A Lenders and any Tranche A Swap Counterparty (or the Collateral Agent or any fondé de pouvoir (person holding the power of attorney) on their behalf) for the Tranche A Obligations.

          “Tranche A Swap Counterparty” means any Tranche A Lender or any Affiliate of a Tranche A Lender, in either case to the extent that such Person has entered into a Swap Agreement with the Borrower in accordance with the Tranche A Exit Facility Agreement.

          “Tranche B Obligations” means all debts, obligations and liabilities, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time owing by the Borrower to the Tranche B Lenders or remaining unpaid by the Borrower to the Tranche B Lenders pursuant to the Tranche B Credit Agreement.

          “Tranche B Security Documents” means (a) the documents and instruments pursuant to which any of the Credit Parties which have provided security to the Collateral Agent (or to any fondé de pouvoir (person holding the power of attorney) for or on behalf of the Collateral Agent and/or the Tranche B Lenders) has granted security, or may in the future grant security, over all or any portion of its assets to secure the Tranche B Obligations, and (b) any other document or instrument executed by any other Person which is intended to provide further security to the Tranche B Lenders (or the Collateral Agent or any fondé de pouvoir (person holding the power of attorney) on their behalf) for the Tranche B Obligations.

          “Tranche C Obligations” means all debts, obligations and liabilities, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time owing by the Borrower to the Tranche C Lenders or remaining unpaid by the Borrower to the Tranche C Lenders pursuant to the Tranche C Credit Agreement.

          “Tranche C Security Documents” means (a) the documents and instruments pursuant to which any of the Credit Parties which have provided security to the Collateral Agent (or to any fondé de pouvoir (person holding the power of attorney) for or on behalf of the Collateral Agent and/or the Tranche C Lenders) has granted security, or may in the future grant security, over all or any portion of its assets to secure the Tranche C Obligations, and (b) any other document or instrument executed by any other Person which is intended to provide further security to the Tranche C Lenders (or the Collateral Agent or any fondé de pouvoir (person holding the power of attorney) on their behalf) for the Tranche C Obligations.

          “Unrestricted Subsidiary” means Inukshuk Internet Inc. and Telecom Investments Inc. (but in the case of Telecom Investments Inc., only for so long as its sole activity is serving as general partner of GSM Capital Partners), and their respective successors and permitted assigns.

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          “Warrants” means the 2005 and 2008 warrants issued pursuant to those certain warrant indentures between the Parent and Computershare Trust Company of Canada, as trustee, each dated May 1, 2003, entitling the holders thereof to subscribe for Equity Securities of the Parent.

1.2     Other Usages. References to “this Agreement”, “the Agreement”, “hereof”, “herein”, “hereto” and like references refer to this Agreement and not to any particular Article, Section or other subdivision of this Agreement. Any references to “this Agreement”, “the Agreement”, “hereof”, “herein”, “hereto” and like references refer to this Agreement, as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof. In this Agreement, the word “includes” or “including” means “includes without limitation” or “including without limitation”.

1.3     Plural and Singular. Where the context so requires, words importing the singular number will include the plural and vice versa.

1.4     Headings. The division of this Agreement into Articles, Sections and the insertion of headings in this Agreement are for convenience of reference only and will not affect the construction or interpretation of this Agreement.

1.5     Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable in the Province of Ontario.

1.6     Time of the Essence. Time is of the essence of this Agreement.

1.7     Paramountcy. If there is a conflict or inconsistency between the provisions of this Agreement and the provisions of any other agreement which is referred to herein or delivered pursuant hereto, the provisions of this Agreement will prevail to the extent of the conflict or inconsistency, provided that nothing in this Agreement is intended to or will impair, as between the Borrower and the Creditors, (a) the obligations of the Borrower to pay or perform any of the Obligations when due, or (b) the validity or enforceability of the security constituted by any of the Security Documents.

1.8     No Rights Conferred on Borrower. Nothing in this Agreement will be construed as conferring any rights upon the Borrower or any third party. The terms and conditions hereof are and will be for the sole and exclusive benefit of the Creditors.

1.9     Currency. In determining the Pro Rata Shares of the Creditors under this Agreement, all Obligations shall be expressed in Canadian Dollars. If any Obligation is denominated in U.S. Dollars, then for the purposes of determining Pro Rata Shares, such Obligation shall be converted to Canadian Dollars at an exchange rate equal to the Bank of Canada noon spot rate on the date of determination.

ARTICLE 2

SUBORDINATIONS; PRO RATA SHARING; ACKNOWLEDGEMENTS

2.1     Subordinations; Application of Proceeds of Realization. The Tranche B Lenders hereby agree that, except as otherwise expressly provided herein, the payment of the

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Tranche B Obligations is hereby subordinated, to the extent and in the manner set forth herein, to the prior indefeasible payment in cash of all Tranche A Obligations, and the Tranche A Obligations will have priority over the Tranche B Obligations in all respects and at all times. The Tranche B Lenders hereby also agree that the Liens arising under the Tranche B Security Documents are hereby subordinated, to the extent and in the manner set forth herein, to the Liens arising under the Tranche A Security Documents, and the Tranche A Security Documents will have priority over the Tranche B Security Documents in all respects and at all times. The Tranche C Lenders hereby agree that, except as otherwise expressly provided herein, the payment of the Tranche C Obligations is hereby subordinated, to the extent and in the manner set forth herein, to the prior indefeasible payment in cash of all Tranche A Obligations and Tranche B Obligations, and the Tranche A Obligations and Tranche B Obligations will have priority over the Tranche C Obligations in all respects and at all times. The Tranche C Lenders hereby also agree that, except as otherwise expressly provided herein, the Liens arising under the Tranche C Security Documents are hereby subordinated, to the extent and in the manner set forth herein, to the Liens arising under the Tranche A Security Documents and the Tranche B Security Documents, and the Tranche A Security Documents and the Tranche B Security Documents will have priority over the Tranche C Security Documents in all respects and at all times. The First Units Trustee hereby agrees, for and on behalf of the holders of any First Units, that all payments in respect of the First Units, if and when issued, are hereby subordinated to the prior indefeasible payment in cash of all of the Tranche A Obligations, the Tranche B Obligations and the Tranche C Obligations, and the Tranche A Obligations, the Tranche B Obligations and the Tranche C Obligations will have priority over the First Units in all respects and at all times. The Second Units Trustee hereby agrees, for and on behalf of the holders of any Second Units, that all payments in respect of the Second Units, if and when issued, are hereby subordinated to the prior indefeasible payment in cash of all of the Tranche A Obligations, the Tranche B Obligations, the Tranche C Obligations and the First Units, and the Tranche A Obligations, the Tranche B Obligations, the Tranche C Obligations and the First Units will have priority over the Second Units in all respects and at all times. The First Units and the Second Units, if and when issued, will be unsecured obligations of the Parent, and will not be guaranteed by any other Credit Party. Any Proceeds of Realization will be applied to the Obligations and distributed in the following order and priority:

(a)	first, to the payment of all costs, charges, expenses and liabilities incurred in connection with any enforcement of any of the Security Documents, including legal fees and all costs, charges, expenses and liabilities provided for in any of the Security Documents, and including all costs, charges and expenses of the Collateral Agent, any trustee and/or any Receiver;
(b)	second, to the Tranche A Lenders and the Tranche A Swap Counterparties, if any, on account of the Tranche A Obligations, in accordance with their respective Pro Rata Shares;
(c)	third, to the Tranche B Lenders, on account of the Tranche B Obligations, in accordance with their respective Pro Rata Shares;
(d)	fourth, to the Tranche C Lenders, on account of the Tranche C Obligations, in accordance with their respective Pro Rata Shares; and

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(e) fifth, to the Credit Parties or as otherwise required by applicable law.

Each Creditor acknowledges that the foregoing method of application of Proceeds of Realization may be subject to the claims, if any, of prior secured creditors of the Debtor; however, this acknowledgement is not intended to, and shall not, constitute a subordination by any Creditor in favour of any other creditor of the Debtor. For the purposes of this Agreement, Obligations will not be considered to have been paid in full unless the relevant Creditor has received indefeasible payment of the full amount of the relevant Obligations owing to such Creditor.

2.2     Mandatory Prepayments.

(a)

If, at the end of any Fiscal Year, the Parent has a consolidated cash balance (which shall include all cash, cash equivalents and short-term investments) of at least Cdn.$45,000,000 (prior to the Parent’s 25% share of any Excess Cash Flow), and if the Credit Parties have generated Excess Cash Flow during such Fiscal Year, then the Borrower shall pay to the Collateral Agent, for the benefit of the Creditors and other Persons entitled to payments pursuant to the terms hereof, on or before March 31 of the immediately following Fiscal Year, an amount equal to 75% of the Excess Cash Flow generated in such Fiscal Year. Any such amount shall be applied as contemplated by Section 2.2(d). The Parent shall manage its consolidated cash balance in the ordinary course and in a manner consistent with its cash management practices in prior periods, and shall not take any action or omit to take any action which is intended to reduce the consolidated cash balance of the Parent for the purpose of this Section 2.2.

(b)

In the event of an Asset Disposition, the Borrower shall pay to the Collateral Agent, for the benefit of the Creditors, within five Business Days following the receipt of the proceeds of such Asset Disposition, an amount equal to any Net Proceeds in excess of Cdn.$2,000,000 in the aggregate in any Fiscal Year received from such Asset Disposition and any other Asset Disposition which generated Net Proceeds during such Fiscal Year. Any such amount shall be applied as contemplated by Section 2.2 (d); provided, however, that in the event of any payment which would otherwise be required to be made to the Tranche B Lenders or the Tranche C Lenders under any of Sections 2.2(d) (i), (iv), (ix) or (xi) (a “Triggering Event”), the Borrower shall, instead of paying the Collateral Agent, offer to prepay the Tranche B Loans or the Tranche C Loans, as the case may be, by an amount which would have been otherwise allocated under Section 2.2(d) to prepay the Tranche B Loans or the Tranche C Loans, as the case may be. Any such offer of prepayment shall be made by the Borrower in writing and shall be delivered to the Administrative Agent for the Tranche B Lenders or the Tranche C Lenders, as applicable, whereupon each such Administrative Agent shall forward a copy of such notice to the Tranche B Lenders or the Tranche C Lenders, as applicable. Each Tranche B Lender or Tranche C Lender, as applicable, shall be permitted to accept or reject any such offer of prepayment, and shall have 5 Business Days to notify the applicable Administrative Agent of its decision to accept or reject any such offer of prepayment as a result of such

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	Triggering Event. Any Tranche B Lender or Tranche C Lender which fails to notify the applicable Administrative Agent, within such 5 Business Days, of its decision to accept or reject any such offer of prepayment as a result of such Triggering Event shall be deemed to have accepted such offer of prepayment. The applicable Administrative Agent shall notify the Collateral Agent of the payment entitlements, if any, resulting from the foregoing.
(c)	The Borrower shall ensure that, within five Business Days after the receipt of the proceeds of any sale or issuance of Equity Securities by a Credit Party, the relevant Credit Party shall pay to the Collateral Agent, for the account of the Creditors, an amount equal to 75% of any Net Proceeds from the issuance of such Equity Securities, including any proceeds from the exercise of any of the Warrants; provided that, for greater certainty, this Section 2.2(c) shall not apply to any issuance of Equity Securities by a Credit Party to another Credit Party. Any such amount shall be used to make the payments contemplated by Section 2.2 (d).
(d)	If, at the time of any Mandatory Prepayment, First Preferred Shares and Second Preferred Shares are issued and outstanding, then Mandatory Prepayments made pursuant to this Section 2.2 shall be applied sequentially, in the following priority (but subject always to the proviso in Section 2.2(b), and subject to the maintenance of a minimum consolidated cash balance (which shall include all cash, cash equivalents and short-term investments) of at least Cdn.$45,000,000, prior to the Parent’s 25% share of any Excess Cash Flow):

(i)	first, subject to Section 2.2(f), to the permanent rateable prepayment of the principal amounts outstanding under the Tranche B Credit Agreement, up to a maximum aggregate amount equal to 25% of the original principal amounts under the Tranche B Credit Agreement;
(ii)	second, to the payment of unpaid accrued interest on the Tranche C Loans, in accordance with the Tranche C Credit Agreement;
(iii)	third, to the declaration and payment of dividends on the First Preferred Shares;
(iv)	fourth, subject to Section 2.2(g), until the fifth anniversary of the Effective Date, on a pro rata basis, to the permanent rateable prepayment of the Tranche C Loans, up to a maximum aggregate amount equal to 25% of the original principal amount of the Tranche C Loans, and the redemption of up to 75% of the First Preferred Shares issued on the Effective Date;
(v)	fifth, to the declaration and payment of dividends on the Second Preferred Shares;
(vi)	sixth, until the fifth anniversary of the Effective Date, to the redemption of up to 75% of the number of Second Preferred Shares issued on the Effective Date;

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(vii)	seventh, after the fifth anniversary of the Effective Date, on a pro rata basis, to repayment of the remaining principal amount of Tranche C Loans and redemption of the remaining First Preferred Shares issued on the Effective Date; and
(viii)	eighth, after the fifth anniversary of the Effective Date, to redemption of the remaining Second Preferred Shares issued on the Effective Date.
If, at the time of any Mandatory Prepayment, First Units and Second Units are issued and outstanding, then Mandatory Prepayments made pursuant to this Section 2.2 shall be applied sequentially, in the following priority (but subject always to the proviso in Section 2.2(b), and subject to the maintenance of a minimum consolidated cash balance (which shall include all cash, cash equivalents and short-term investments) of at least Cdn.$45,000,000, prior to the Parent’s 25% share of any Excess Cash Flow):
(ix)	first, subject to Section 2.2(f), to the permanent rateable prepayment of the principal amounts outstanding under the Tranche B Credit Agreement, up to a maximum aggregate amount equal to 25% of the original principal amounts under the Tranche B Credit Agreement;
(x)	second, to the payment of unpaid accrued interest on the Tranche C Loans, in accordance with the Tranche C Credit Agreement;
(xi)	third, on a pro rata basis, subject to Section 2.2(g), to the rateable prepayment of the Tranche C Loans and the rateable redemption of the First Units; provided that (A) until the fifth anniversary of the Effective Date, the amount allocated to the Tranche C Loans under this Section 2.2(d)(xi) shall be limited to a maximum aggregate amount equal to 25% of the original principal amount of the Tranche C Loans (without affecting the entitlement of the holders of First Units), and (B) from the date on which the First Units are issued until the fifth anniversary of the date on which the First Units are issued, the aggregate of all amounts allocated to the First Units under this Section 2.2(d)(xi) and Section 2.2(d)(xiii) shall be limited to a maximum aggregate amount equal to 25% of the original principal amount of the First Notes (without affecting the entitlement of the holders of Tranche C Loans);
(xii)	fourth, until the fifth anniversary of the date on which the Second Units are issued, to the rateable redemption of the Second Units, up to a maximum aggregate amount equal to 25% of the original principal amount of the Second Notes;
(xiii)	fifth, after the fifth anniversary of the Effective Date, on a pro rata basis, to repayment of the remaining principal amount of Tranche C Loans and redemption of the remaining First Units; provided that, from the date on which the First Units are issued until the fifth anniversary of the date on which the First Units are issued, the aggregate of all amounts allocated to

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	the First Units under this Section 2.2(d)(xiii) and Section 2.2(d)(xi) shall be limited to a maximum aggregate amount equal to 25% of the original principal amount of the First Notes (without affecting the entitlement of the holders of Tranche C Loans); and
(xiv)	sixth, after the fifth anniversary of the date on which the Second Units are issued, to redemption of the remaining Second Units.

Any amount payable under this Section 2.2 to the holders of First Preferred Shares, Second Preferred Shares, First Units or Second Units shall be paid by the Collateral Agent to the transfer agent or trustee for the First Preferred Shares, Second Preferred Shares, First Units and Second Units, as applicable, and in consultation with the Parent so as to assist the Parent in coordinating the making of required payments, and the Collateral Agent shall not be responsible for any ultimate distribution to the holders thereof. Any amount remaining after the application of payments above shall be paid to the Parent or as otherwise required by applicable law.

(e)	In the case of any payment pursuant to any of Sections 2.2(a), (b) or (c) of this Agreement, the Borrower shall provide to the Collateral Agent written notice of such payment at least three Business Days prior to the date such payment is to be made. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified in such notice, together with any amounts payable pursuant to Section 2.10 of the Tranche A Exit Facility Agreement, Section 2.10 of the Tranche B Credit Agreement or Section 2.7 of the Tranche C Credit Agreement, as applicable. Upon receipt of any notice given pursuant to this Section 2.2(e), the Collateral Agent shall promptly notify each affected party of the contents thereof and of such party’s Pro Rata Share of such payment.
(f)	If a Mandatory Prepayment required by Section 2.2(d)(i) or Section 2.2(d)(ix) would result in the repayment of an amount exceeding 25% of the aggregate original principal amount of the Tranche B Loans (the “Tranche B Tax Threshold Amount”) to be repaid on or before the fifth anniversary of the Effective Date, taking into account all Amortization Payments (as defined in the Tranche B Credit Agreement) and all Mandatory Prepayments made to the Tranche B Lenders pursuant to Sections 2.2(a) and (c) (but, for greater certainty, not taking into account any Mandatory Prepayments made to the Tranche B Lenders pursuant to Section 2.2(b), or any voluntary prepayments), then, notwithstanding Section 2.2(d)(i) or Section 2.2(d)(ix), that Mandatory Prepayment shall not be paid to the Tranche B Lenders, to the extent that such amount would cause the Tranche B Tax Threshold Amount to be exceeded, and shall instead be applied pursuant to Sections 2.2(d)(ii) through (viii) or Sections 2.2(d)(x) through (xiv), subject to the limitations provided therein.
(g)	If a Mandatory Prepayment required by Section 2.2(d)(iv) or Section 2.2(d)(xi) would result in the repayment of an amount exceeding 25% of the aggregate original principal amount of the Tranche C Loans (the “Tranche C Tax Threshold Amount”) to be repaid on or before the fifth anniversary of the Effective Date,

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taking into account all Mandatory Prepayments made to the Tranche C Lenders pursuant to Sections 2.2(a) and (c) (but, for greater certainty, not taking into account any Mandatory Prepayments made to the Tranche C Lenders pursuant to Section 2.2(b), or any voluntary prepayments), then, notwithstanding Section 2.2(d)(iv) or Section 2.2(d)(xi), that Mandatory Prepayment shall not be paid to the Tranche C Lenders, to the extent that such amount would cause the Tranche C Tax Threshold Amount to be exceeded, and shall instead be applied pursuant to Sections 2.2(d)(v) through (viii) or Section 2.2(d)(xii) through (xiv), subject to the limitations provided therein.

2.3     Asset Sales. Prior to a Standstill Event, and notwithstanding any provision of this Agreement, the New Debt Instruments or the Security Documents to the contrary:

(a)

the Collateral Agent shall be entitled to release from the hypothecs, security interests and other Liens constituted by any of the Security Documents any asset which is the subject of an Asset Disposition, provided that (i) such Asset Disposition is permitted under the Tranche A Exit Facility Agreement and under the Tranche B Credit Agreement (no such permission being required under the Tranche C Credit Agreement), or (ii) such Asset Disposition has been approved in writing by the “Required Lenders” under the Tranche A Exit Facility Agreement and the “Required Lenders” under the Tranche B Credit Agreement (no such approval being required under the Tranche C Credit Agreement); and

(b)

the Collateral Agent shall be entitled to execute and register (or cause any trustee or fondé de pouvoir (person holding the power of attorney) acting for or on behalf of the Collateral Agent or the Creditors to execute and register) any releases or discharges which may be necessary or desirable in connection with any Asset Disposition effected pursuant to this Section 2.3.

2.4     Prohibited Payments. Except as otherwise expressly provided herein, the Credit Parties will not make and will not be entitled to make, and the Tranche B Lenders will not accept and will not be entitled to accept, any payment or prepayment of any principal, interest or other amount in respect of the Tranche B Obligations, whether in the form of cash, securities or other forms of property, by the exercise of a right of set off or other similar right or remedy, or in any other manner, without the prior consent of the Tranche A Lenders. Except as otherwise expressly provided herein, the Credit Parties will not make and will not be entitled to make, and the Tranche C Lenders will not accept and will not be entitled to accept, any payment or prepayment of any principal, interest or other amount in respect of the Tranche C Obligations, whether in the form of cash, securities or other forms of property, by the exercise of a right of set off or other similar right or remedy, or in any other manner, without the prior consent of the Tranche A Lenders and the Tranche B Lenders. Except as otherwise expressly provided herein, the Credit Parties will not make and will not be entitled to make, and the holders of First Units will not accept and will not be entitled to accept, any payment or prepayment of any principal, interest or other amount in respect of First Units, whether in the form of cash, securities or other forms of property (for greater certainty, not including shares, First Units or Second Units), by the exercise of a right of set off or other similar right or remedy, or in any other manner, without the prior consent of the Tranche A Lenders, the Tranche B Lenders and the Tranche C Lenders. Except as otherwise expressly provided herein, the Credit Parties will not make and will not be

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entitled to make, and the holders of Second Units will not accept and will not be entitled to accept, any payment or prepayment of any principal, interest or other amount in respect of Second Units, whether in the form of cash, securities or other forms of property (for greater certainty, not including shares, First Units or Second Units), by the exercise of a right of set off or other similar right or remedy, or in any other manner, without the prior consent of the Tranche A Lenders, the Tranche B Lenders, the Tranche C Lenders and the holders of First Preferred Units.

2.5     Permitted Payments. Prior to a Standstill Event, the Credit Parties may make, and the Tranche B Lenders may receive, scheduled payments of principal and interest owing by the Borrower to the Tranche B Lenders in accordance with the Tranche B Credit Agreement, and any Mandatory Prepayments to which the Tranche B Lenders are entitled in accordance with Section 2.2 of this Agreement, and any fee, expense reimbursement, indemnification claim or other claim provided for in the Tranche B Credit Agreement. After a Standstill Event, the Borrower may not make, and the Tranche B Lenders may not receive, payment on account of the Tranche B Obligations except in accordance with Section 2.1. Prior to a Standstill Event, the Credit Parties may make, and the Tranche C Lenders may receive, scheduled payments of principal and interest owing by the Borrower to the Tranche C Lenders in accordance with the Tranche C Credit Agreement, and any Mandatory Prepayments to which the Tranche C Lenders are entitled in accordance with Section 2.2 of this Agreement, and any fee, expense reimbursement, indemnification claim or other claim provided for in the Tranche C Credit Agreement. After a Standstill Event, the Borrower may not make, and the Tranche C Lenders may not receive, payment on account of the Tranche C Obligations except in accordance with Section 2.1. Prior to a Standstill Event, the Parent may make, and the holders of First Units may receive, payments in accordance with Section 2.2 of this Agreement. After a Standstill Event, the Parent may not make, and the holders of First Units may not receive, any payment on account of the First Units unless all Tranche A Obligations, Tranche B Obligations and Tranche C Obligations are indefeasibly paid in full. Prior to a Standstill Event, the Parent may make, and the holders of Second Units may receive, payments in accordance with Section 2.2 of this Agreement. After a Standstill Event, the Parent may not make, and the holders of Second Units may not receive, any payment on account of the Second Units unless all Tranche A Obligations, Tranche B Obligations, Tranche C Obligations and First Units are indefeasibly paid in full.

2.6     Consent of Creditors. Each Creditor consents to the granting or assuming by the Credit Parties of the security constituted by the Security Documents and the incurring or assuming by the Credit Parties of the Obligations, and confirms that such action does not and will not constitute a default under or otherwise contravene any terms of the Obligations held by such Creditor.

2.7     Application of the Agreement. The rights of the Creditors and the priorities of the Obligations set out in this Agreement will apply irrespective of any matter or thing, including (a) the validity or enforceability of any of the Security Documents; (b) the time of creation, granting, execution, delivery, attachment, registration (to the extent registration is required), perfection or enforcement of any of the Security Documents; (c) the jurisdictions where any of the Security Documents is registered or the failure of any Creditor or the Collateral Agent to properly register or perfect any of the Security Documents in any particular jurisdiction; (d) the time of any loan or advance or other extension of credit made to the Borrower by any Creditor; (e) the time of Default or demand or the dates of crystallization of any floating charge;

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(f)  any priority otherwise accorded to the Security Documents (or any of them) by any principle of law or by any statute; (g) the provisions of the instruments creating any of the Security Documents; or (h) any other matter whatsoever.

2.8     Payments Held in Trust. If any payment is made to or received by a Subordinate Creditor in contravention of this Agreement, such Subordinate Creditor will hold such payment in trust for the Senior Creditors and will forthwith pay such payment to the Collateral Agent for application against the Obligations of the Credit Parties to the Senior Creditors or as otherwise required by this Agreement. Any action taken or thing done by a Creditor in contravention of this Agreement will be null and void and of no effect. Each Subordinate Creditor agrees that, if all or any part of any payment made on account of the Obligations held by a Senior Creditor is recovered from such Senior Creditor as a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or other law, any payment or distribution received by such Subordinate Creditor on its Obligations will be deemed to have been received by it in trust for the Senior Creditors and will promptly be paid over to the Collateral Agent for the benefit of the Senior Creditors entitled thereto.

2.9     Pledged Shares. The Creditors acknowledge that the Equity Securities of all direct and indirect subsidiaries of the Parent are required to be pledged by the relevant shareholder to the Collateral Agent on behalf of the Creditors, and that the Collateral Agent is holding such Equity Securities. The Collateral Agent agrees to hold such Equity Securities on behalf of all of the Creditors in accordance with the priorities set forth in this Agreement.

ARTICLE 3

ENFORCEMENT AND REMEDIES

3.1     Enforcement. If a Default has occurred and is continuing, the Required Creditors may direct the Collateral Agent to take any or all of the following actions:

(a)	to exercise or enforce any rights or remedies of the Collateral Agent under the applicable Security Documents; and
(b)	without limitation, to take or exercise any other action, suit, remedy or proceeding authorized or permitted by any of the Security Documents or applicable law;

provided, however, that if any events or circumstances of the type described under any of clauses (h), (i) or (j) of Section 7.1 of the Tranche B Credit Agreement or any equivalent section in any other New Debt Instrument shall have occurred, the Collateral Agent may do any of the foregoing without the need for directions from the Required Creditors. If the Required Creditors shall have directed the Collateral Agent to cause the exercise or enforcement of rights or remedies under any of the Security Documents, then subject to Article 4 of this Agreement, the Collateral Agent shall so exercise or enforce rights or remedies under the relevant Security Documents and shall so notify the Creditors. If the Collateral Agent has caused the exercise or enforcement of rights or remedies under any of the Security Documents in circumstances where no directions from the Required Creditors are required pursuant to this Section 3.1, the Collateral Agent shall so notify the Creditors. If a Default in respect of any Subordinate Obligations has occurred and is continuing for a period of at least 30 days after a Standstill Event, and if during such 30 day period the Senior Creditors have not taken steps, or advised the Collateral Agent that

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they intend actively to take steps, to exercise or enforce rights or remedies under the relevant Security Documents, or to take or exercise any other action, suit, remedy or proceeding authorized or permitted by any of the Security Documents or applicable law, then the Subordinate Creditors shall be entitled to take steps to exercise or enforce rights or remedies under their Security Documents, subject always to the provisions of Section 2.1 hereof, and subject always to the right of the Senior Creditors, at any time, to take over the direction of the exercise or enforcement of rights and remedies under the Security Documents, or to take or exercise any other action, suit, remedy or proceeding authorized or permitted by any of the Security Documents or applicable law.

3.2     Cooperation and Information. If the Required Creditors shall have directed the Collateral Agent to cause the enforcement of any of the Security Documents or the Collateral Agent has caused enforcement of any of the Security Documents in circumstances where no directions from the Required Creditors are required as contemplated in Section 3.1, each Creditor hereby agrees that it will fully cooperate and reasonably consult with the other Creditors with a view to maximizing the Proceeds of Realization. Each Creditor will, upon request, from time to time advise the other Creditors in writing of the amount of the Tranche A Obligations, the Tranche B Obligations and the Tranche C Obligations, as the case may be, owing to such Creditor. The Parent and the Borrower hereby consent to such cooperation, consultation and disclosure.

3.3     No Challenge. No party hereto will take or support any action to challenge the validity or enforceability of any of the Security Documents or the priority entitlement of any other party hereto to receive payments from the Credit Parties as contemplated hereunder.

3.4     Notice. If any Creditor or group of Creditors wishes to issue directions to the Collateral Agent under Section 3.1, such Creditor shall so notify the Collateral Agent and the other Creditors.

ARTICLE 4

THE COLLATERAL AGENT; MISCELLANEOUS

4.1     Authorization of Collateral Agent. Each of the Tranche A Lenders (for itself and any of its Affiliates which may become a Tranche A Swap Counterparty, and also in the capacity of “Issuing Bank” under the Tranche A Exit Facility Agreement) and the Tranche A Administrative Agent irrevocably appoints and authorizes the Collateral Agent to act as its collateral agent under the Tranche A Security Documents and to hold the security constituted thereby (including the pledge or re-pledge of any and all bonds issued by the Borrower under and secured by any deed of hypothec and issue of bonds) for the benefit of the Tranche A Lenders, any Affiliate of a Tranche A Lender which may become a Tranche A Swap Counterparty, and the Tranche A Administrative Agent, and to exercise all powers granted under the Tranche A Security Documents, together with all powers reasonably incidental thereto and the Collateral Agent hereby accepts such appointment. Each of the Tranche B Lenders and the Tranche B Administrative Agent irrevocably appoints and authorizes the Collateral Agent to act as its collateral agent under the Tranche B Security Documents and to hold the security constituted thereby (including the pledge or re-pledge of any and all bonds issued by the Borrower under and secured by any deed of hypothec and issue of bonds) for the benefit of the Tranche B Lenders and the Tranche B Administrative Agent, and to exercise all powers granted under the Tranche B

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Security Documents, together with all powers reasonably incidental thereto and the Collateral Agent hereby accepts such appointment. Each of the Tranche C Lenders and the Tranche C Administrative Agent irrevocably appoints and authorizes the Collateral Agent to act as its collateral agent under the Tranche C Security Documents and to hold the security constituted thereby (including the pledge or re-pledge of any and all bonds issued by the Borrower under and secured by any deed of hypothec and issue of bonds) for the benefit of the Tranche C Lenders and the Tranche C Administrative Agent, and to exercise all powers granted under the Tranche C Security Documents, together with all powers reasonably incidental thereto and the Collateral Agent hereby accepts such appointment. The Collateral Agent shall have no duties or responsibilities except those expressly set forth herein. The Collateral Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Agreement and the applicable Security Documents, unless the Collateral Agent shall have been directed to exercise such rights or to take or refrain from taking such action, and the Collateral Agent may from time to time request direction in this regard. The Collateral Agent shall not incur any liability for anything which it may do or refrain from doing in the reasonable exercise of its judgement or which may seem to it to be necessary or desirable in the circumstances, except for its gross negligence or wilful misconduct. The Collateral Agent shall not be required to take any action which it determines to be contrary to the applicable Security Documents or any applicable law. As to matters not expressly provided for by this Agreement, the Collateral Agent is not required to exercise any discretion or to take any action (and is fully protected in so acting or refraining from acting) except upon the directions of the Required Creditors. The Collateral Agent may, at any time, request directions or instructions from the Required Creditors with respect to any actions or approvals which, by the terms of any of this Agreement or the applicable Security Documents, the Collateral Agent is permitted or required to take or to grant, and the Collateral Agent shall be absolutely entitled to refrain from taking any such action or to withhold any such approval and shall not be under any liability whatsoever as a result thereof until it shall have received such directions or instructions from the Required Creditors. The Collateral Agent may (but need not) require that any directions of the Required Creditors be provided in writing. Except as expressly otherwise provided herein, the Creditors will act through the Collateral Agent with respect to any action which they may be able to take under or in respect of any of the Security Documents or the Collateral. The Collateral Agent hereby agrees with the Creditors that, with respect to all matters relating to any of the Security Documents, the Collateral Agent is not acting as collateral agent for any Person other than the Creditors and the Collateral Agent hereby agrees with the Creditors that, subject to the right of the Collateral Agent to resign in accordance with Section 4.10 of this Agreement, the Collateral Agent shall continue to act as collateral agent under the Security Documents and to hold the security constituted thereby for the sole and exclusive benefit of the Creditors in accordance with the terms and conditions of this Agreement and not in any other capacity without the prior written consent of all the Creditors.

4.2     Reliance on Writings and Legal Advice. The Collateral Agent shall be entitled to rely upon any writing, notice, certificate, telecopy or facsimile message, telex, cable, statement, order or other document or telephone conversation believed by the Collateral Agent to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and with respect to legal matters, to act upon advice of legal advisers selected by the Collateral Agent concerning all matters pertaining to this Agreement and its duties hereunder.

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4.3     Costs and Expenses. Each Creditor agrees that it will, on demand, reimburse the Collateral Agent for its Pro Rata Share of any and all reasonable costs, expenses and disbursements (excluding normal overhead and salary expenses of the Collateral Agent’s employees incurred in connection with the normal operation of this Agreement) which may be incurred or made by the Collateral Agent in connection with the performance and enforcement of this Agreement or of any of the Security Documents for which the Collateral Agent is not promptly reimbursed at any time by or on behalf of the Borrower (the Borrower hereby undertaking to effect such reimbursement promptly upon demand by the Collateral Agent), except to the extent such costs, expenses or disbursements arise out of the Collateral Agent’s gross negligence or wilful misconduct. The Collateral Agent shall not be obliged to expend its own funds or otherwise incur any financial obligations in connection with this Agreement or any of the Security Documents unless the Collateral Agent is so reimbursed.

4.4     Authority of Collateral Agent to Act. The Collateral Agent shall have the right, subject to the provisions of this Agreement, to take such actions as it deems fit or refrain from taking any action, or to give agreements, consents, approvals or instructions to the Borrower on behalf of the Creditors in respect of all matters relating to the enforcement of any of the Security Documents; provided, however, that the Collateral Agent shall not waive a Default, or in respect of any matter relating to the enforcement of any of the Security Documents, make any decision or give any consent which could materially impact the Creditors’ interests unless so directed by the Required Creditors in respect thereof. Any directions given by the Required Creditors to the Collateral Agent in respect of matters relating to the enforcement of the applicable Security Documents or otherwise specifically referred to in this Agreement as being governed by a decision of the Required Creditors pursuant to this Agreement shall be binding on all Creditors.

4.5     Disclaimer. The Collateral Agent shall not be liable to any Creditor for any error of judgement or for any action taken or omitted by the Collateral Agent or with respect to anything which the Collateral Agent may do or refrain from doing in the reasonable exercise of its own judgement or which may seem to the Collateral Agent to be necessary or desirable in the circumstances, except gross negligence or wilful misconduct. If the Collateral Agent exercises the same care in administering the Security Documents as the Collateral Agent exercises with respect to credit facilities which the Collateral Agent alone makes, the Collateral Agent shall have no further responsibility to the Creditors. In all cases, the Collateral Agent shall be fully protected in acting or refraining from acting under the Security Documents in accordance with the directions of the Required Creditors.

4.6     Indemnification. Each Creditor agrees to indemnify the Collateral Agent (to the extent not reimbursed by the Borrower (the Borrower hereby undertaking to effect such reimbursement promptly upon demand by the Collateral Agent)) rateably in accordance with its Pro Rata Share from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgements, suits, costs, expenses, taxes or disbursements of any kind and nature whatsoever which may be imposed on, incurred by, or asserted against the Collateral Agent in its capacity as such in any way relating to or arising out of this Agreement or any other documents contemplated by or referred to herein or the transactions contemplated hereby (including the costs and expenses which the Borrower is obligated to pay) or any action taken or omitted by the Collateral Agent in enforcing any of the terms hereof or preserving any rights hereunder; provided, that no Creditor shall be liable for any of the foregoing to the extent they arise from the

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Collateral Agent’s gross negligence or wilful misconduct. Without limiting the generality of the foregoing, each Creditor agrees to reimburse the Collateral Agent promptly upon demand for its Pro Rata Share of out-of-pocket expenses (including the fees and disbursements of counsel) incurred by the Collateral Agent in connection with the determination or preservation of any rights of the Collateral Agent or the Creditors under, or the enforcement of, or legal advice in respect of rights or responsibilities under this Agreement, to the extent that the Collateral Agent is not reimbursed for such expenses by the Borrower (the Borrower hereby undertaking to effect such reimbursement promptly upon demand therefore by the Collateral Agent).

4.7     Acknowledgement of Creditors. Each Creditor acknowledges to the Collateral Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal of and investigation into the financial condition, creditworthiness, affairs, status and nature of the Borrower and accordingly each Creditor confirms to the Collateral Agent that it has not relied, and will not hereafter rely on the Collateral Agent (i) to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided by the Borrower or in connection with this Agreement (whether or not such information has been or is hereafter circulated to such Creditor by the Collateral Agent), or (ii) to assess or keep under review on its behalf the financial condition, creditworthiness, affairs, status or nature of the Borrower. Without limiting any other provision hereof that is protective of the Collateral Agent, each Creditor separately acknowledges that the Collateral Agent, after consultation with certain of the Creditors and Credit Parties, has determined that certain steps necessary and/or desirable to perfect the Liens and/or enforcement rights of the Collateral Agent should not be taken, because of time and expense constraints and for other reasons, and that each Creditor has been advised as to the limitations upon the scope of the Collateral Agent’s perfected Liens, has been advised as to steps the Collateral Agent has determined should not be taken to perfect the Collateral Agent’s Liens and/or enforcement rights, and has independently concluded that the Creditor is willing to proceed with the transactions contemplated by this Agreement notwithstanding the limitations upon the perfection and/or enforcement rights of the Collateral Agent as a result of such determinations. In general, each Creditor acknowledges its familiarity with, and agreement to proceed, notwithstanding the fact that: (i) the Collateral Agent has relied upon the Credit Parties to identify, inventory and provide valuations of the real and personal properties owned by the Credit Parties, and relevant information regarding such real and personal property, without obtaining independent corroboration or verification of such information provided by the Credit Parties; (ii) the Collateral Agent has relied upon the Credit Parties and counsel to the Credit Parties to identify and provide relevant information with respect to the Credit Parties’ ownership rights with respect to, and with respect to prior Liens upon title to, the real and personal properties owned by the Credit Parties without obtaining independent searches of such titles and Liens and without obtaining independent information regarding the relevant information relating to such titles and Liens; (iii) the Collateral Agent has selectively honored the requests of the Credit Parties that the Collateral Agent not expend the resources necessary to perfect Liens upon assets of the Credit Parties represented by the Credit Parties to be of less than material value given the magnitude of the Obligations; (iv) the Collateral Agent has honored the requests of the Credit Parties that certain Affiliates of the Credit Parties not be financially responsible for the Obligations. In particular, each Creditor acknowledges its familiarity with, and agreement to proceed notwithstanding each of the matters set forth on Schedule A attached hereto with respect to such matters.

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4.8     Duty of Collateral Agent to Deliver Documents. The Collateral Agent shall promptly distribute to, or otherwise make available to each Creditor, such documents, papers, materials and other information as are furnished by the Borrower to the Collateral Agent, or by the Collateral Agent to the Borrower, in each case pursuant to this Agreement or the applicable Security Documents, but shall have no other obligation to provide any Creditor with any credit or other information whatsoever with respect to the Borrower and shall be under no obligation to inquire as to the performance by the Borrower of its obligations hereunder. Distribution of documents, papers, materials and other information may (but need not) be effected by granting to the Creditors electronic access to same.

4.9     No Association among Creditors. Nothing contained in this Agreement and no action taken pursuant to it shall, or shall be deemed to, constitute the Creditors a partnership, association, joint venture or other similar entity.

4.10     Successor Collateral Agent. Subject to the appointment and acceptance of a successor agent as provided in this Section 4.10, the Collateral Agent may resign at any time by giving 30 days’ prior written notice thereof to the Creditors and the Borrower and the Collateral Agent may be removed at any time for cause by the Required Creditors in respect thereof. Upon any such resignation or removal, the Required Creditors shall have the right to appoint a successor agent. Any successor agent which may be appointed under this Section 4.10 shall be a Creditor or an Affiliate of a Creditor which has an office in Montreal or Toronto or is a reputable financial institution which has an office in Montreal or Toronto. If no such successor agent shall have been appointed by the Required Creditors and shall have accepted such appointment within 30 days after the retiring agent’s giving of notice of resignation or the Required Creditors’ removal of the retiring agent, then the retiring agent may, on behalf of the Creditors, appoint a successor agent, which shall be a reputable financial institution having an office in Montreal or Toronto. Upon the acceptance of any appointment as Collateral Agent by a successor agent, such successor agent shall thereupon succeed to and become vested with all the rights, powers, privileges, obligations and duties of the retiring agent and shall be deemed for the purposes of this Agreement and all Financing Documents to be the Collateral Agent and such retiring agent shall be discharged from its duties and obligations under this Agreement. After any such retiring agent’s resignation, removal or replacement hereunder as Collateral Agent, the provisions of this Agreement shall continue in effect for its benefit and for the benefit of the Creditors in respect of any actions taken or omitted to be taken by the retiring agent while it was acting as Collateral Agent.

4.11     No Third Party Rights Established. No creditor of the Borrower or other Person which is not a party to this Agreement will derive any rights or benefits hereunder.

4.12     Waivers and Amendments. No party to this Agreement will, by any act or delay, be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of either party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by either party of any right or remedy hereunder on any one occasion will not be construed as a bar to any right or remedy which such party would otherwise have on any future occasion.

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4.13     Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of such prohibition or unenforceability and will be severed from the balance of this Agreement, all without affecting the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

4.14     Successors and Assigns. This Agreement and all rights and interests of the Creditors under the Security Documents will enure to the benefit of, and be binding on, the parties hereto and their successors and permitted assigns (as stipulated in the Tranche A Exit Facility Agreement, the Tranche B Credit Agreement or the Tranche C Credit Agreement, as applicable); provided, however, that as a condition precedent of any such assignment, the assignee must agree in writing to be bound by and act in accordance with the terms, provisions and intent of this Agreement. The parties hereto agree that any assignment by a Creditor in accordance with this Section 4.14 of any of its rights under this Agreement or any of the Security Documents shall be effective and binding on all the parties hereto and that the assignee of such rights and interests shall thereafter be and be treated as a Creditor hereunder and under the applicable Security Documents for all purposes hereof and thereof and shall, to the extent of the rights and interests assigned to it by the assignor, be entitled to the full benefits and subject to the full obligations of the assignor hereunder and thereunder to the same extent as if the assignee were an original party in respect of the rights and interests assigned to it.

4.15     Counterparts; Binding Nature. This Agreement may be executed in any number of counterparts, all of which will be deemed to be an original and such counterparts taken together will constitute one agreement and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when each party hereto has executed a counterpart and has delivered the same to the Collateral Agent. Delivery of an executed signature page to this Agreement by any party by facsimile transmission shall be as effective as delivery of a manually executed copy of this Agreement by such party.

4.16     Further Assurances. The parties hereto agree to execute and deliver such further and other documents and perform and cause to be performed such further and other acts and things as may be necessary or desirable in order to give full effect to this Agreement and every part thereof, including all acts, deeds and agreements as may be necessary or desirable for the purpose of enforcement of the Security Documents pursuant to the terms of this Agreement and registering or filing notice of the terms of this Agreement. No party to this Agreement will take any action whereby the pro rata sharing arrangements set out in this Agreement might be impaired or defeated.

4.17     Communication. Any communication required or permitted to be given under this Agreement will be in writing and will be effectively made and given if (i) delivered personally, (ii) sent by prepaid courier service, or (iii) sent prepaid by facsimile transmission or other similar means of electronic communication, in each case to the address or facsimile number of the relevant party set out opposite such party’s name in the execution pages of this Agreement. Any communication so given will be deemed to have been given and to have been received on the day of delivery if so delivered, or on the day of facsimile transmission or sending by other means of recorded electronic communication provided that such day is a Business Day and the communication is so delivered or sent prior to 4:30 p.m. (local time at the place of receipt). Otherwise, such communication will be deemed to have been given and to have been

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received on the following Business Day. Any party to this Agreement may from time to time change its respective address or facsimile number for notice by giving notice to the other parties hereto in accordance with the provisions of this Section 4.17.

4.18     Quebec Security. For greater certainty, and without limiting the powers of the Administrative Agent or the Collateral Agent, or any other Person acting as an agent or mandatary for such Agents hereunder or under any of the other Financing Documents, the Borrower and the Parent hereby acknowledge that, for purposes of holding any security granted by any Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of the Borrower or any other Credit Party under any bond or other title of indebtedness issued by the Borrower or any other Credit Party, the Collateral Agent shall be the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Quebec) for (i) all present and future Creditors, including any Tranche A Lender that makes available to the Borrower any Permitted Additional Exit Facility Debt, and (ii) any Affiliate of any Tranche A Lender that may from time to time enter into Swap Agreements with the Borrower and in particular, for all present and future holders of any such bond or other title of indebtedness. Each Creditor, for itself, and in respect of the Tranche A Lenders on behalf of any of its Affiliates that enter into Swap Agreements with the Borrower, hereby (i) irrevocably constitutes, to the extent necessary the Collateral Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any other Credit Party on property pursuant to the laws of the Province of Quebec to secure obligations of Borrower or any other Credit Party under any bond or other title of indebtedness issued by the Borrower or any other Credit Party; and (ii) appoints and agrees that the applicable Administrative Agent may act as the bondholder and mandatary with respect to any bond or other title of indebtedness that may be issued by any Credit Party and pledged from time to time for the benefit of the Creditors, (including any Persons that become Tranche A Lenders pursuant to the extention of any Permitted Additional Exit Facility Debt) and any Affiliates of the Tranche A Lenders that enter into Swap Agreements.

The constitution of the Collateral Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) and the applicable Administrative Agent as bondholder and mandatary with respect to any bond or other title of indebtedness that may be issued by any Credit Party and pledged from time to time for the benefit of the Creditors, the Persons (including any Tranche A Lenders) that make available Permitted Additional Exit Facility Debt and any Affiliates of the Tranche A Lenders that enter into Swap Agreements shall be deemed to have been ratified and confirmed as follows:

(i)	by any assignee of a Creditor, by the execution of an Assignment and Assumption under the relevant New Debt Instrument;
(ii)	by any Person that provides Permitted Additional Exit Facility Debt, by the execution of a supplemental agreement to the Tranche A Exit Facility Agreement; and
(iii)	by any Affiliate of a Tranche A Lender that enters into a Swap Agreement, by the execution of the relevant Swap Agreement.

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Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), the Administrative Agent or the Collateral Agent may purchase, acquire and be the holder of any bond or other title of indebtedness issued by the Borrower or any other Credit Party (i.e. the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Credit Party). The Borrower and each Credit Party hereby acknowledge that any such bond shall constitute a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.

The Collateral Agent herein appointed as fondé de pouvoir shall have the same rights, powers and immunities as the Agents as stipulated herein, including under this Section 4, which shall apply mutatis mutandis. Without limitation, the provisions of Section 4.10 shall apply mutatis mutandis to the resignation and appointment of a successor Collateral Agent acting as fondé de pouvoir.

4.19     Entire Agreement. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes any prior agreements, undertakings, declarations, representations and understandings, both written and verbal, in respect of the subject matter hereof, provided, however, that nothing in this Agreement is to be construed as effecting any novation of any of the rights of the Collateral Agent and the Creditors under any of the Security Documents and the security constituted thereby, all such rights being hereby expressly reserved. There are no restrictions, agreements, promises, warranties, covenants or undertakings relating to the subject matter hereof other than those set forth in this Agreement.

4.20     Trustee. The Parent, the Borrower, the Creditors, the Administrative Agent, the Collateral Agent and the Fondé de Pouvoir acknowledge that, notwithstanding the terms of this Agreement, (a) the First Units Trustee and the Second Units Trustee are not entering into this Agreement on the date hereof because the trust indentures governing the First Units and the Second Units (the “Unit Indentures”) have not been executed, (b) the Parent and the Borrower have undertaken to execute and deliver Unit Indentures satisfactory to the Parent, the First Units Trustee, the Second Units Trustee and the Collateral Agent on or before May 31, 2003 and, substantially contemporaneously with the execution and delivery of the Unit Indentures, to cause the First Units Trustee and the Second Units Trustee to enter into this Agreement, (c) until the Parent, the First Units Trustee and the Second Units Trustee enter into the Unit Indentures, the Parent will not take any steps to redeem the First Preferred Shares by issuing First Units, or to redeem the Second Preferred Shares by issuing Second Units. The Parent, the Borrower, the Creditors, the Administrative Agent, the Collateral Agent and the Fondé de Pouvoir acknowledge and agree that, notwithstanding the foregoing provisions of this Section 4.20, the provisions of this Agreement will nevertheless be effective and binding upon such parties, and that the First Units Trustee and the Second Units Trustee may become parties to this Agreement by executing a counterpart copy hereof, without the need for any further execution hereof by any of the Parent, the Borrower, the Creditors, the Administrative Agent, the Collateral Agent or the Fondé de Pouvoir.

[The balance of this page is intentionally left blank; signature pages follow.]

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
S 1

          IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

BORROWER	PARENT
MICROCELL SOLUTIONS INC.	MICROCELL TELECOMMUNICATIONS INC.
By:	By:
By:	By:

AGENTS

JPMORGAN CHASE BANK TORONTO
BRANCH, as Administrative Agent under the
Tranche A Exit Facility Agreement, the
Tranche B Credit Agreement and the Tranche
C Credit Agreement, and as Collateral Agent
and Fondé de Pouvoir

By:  

By:

TRUSTEES

COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee for the holders of the First Units	COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee for the holders of the Second Units
By:	By:

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
S 2

By: By:

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
S 3

TRANCHE A LENDERS
	Address: (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:	Postal/Zip Code:
	Country:
By:	Contact:
Name:	Phone:
Title:	Fax:
	E-mail:

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
S 4

TRANCHE B LENDERS
	Address: (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:	Postal/Zip Code:
	Country:
By:	Contact:
Name:	Phone:
Title:	Fax:
	E-mail:

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
S 5

TRANCHE C LENDERS
	Address: (Please complete)
(Type or print name of Lender)	Street Address:
By:	City:
Name:	Province/State:
Title:	Postal/Zip Code:
	Country:
By:	Contact:
Name:	Phone:
Title:	Fax:
	E-mail:

Schedule “A”

1.     Inukshuk Internet Inc. and Telcom Investments Inc. are “Unrestricted Subsidiaries” under the Tranche A Credit Agreement, the Tranche B Credit Agreement and the Tranche C Credit Agreement and therefore are not “Credit Parties”.

2.     Under federal Canadian law, a Lien cannot be granted in respect of the PCS license held by the Borrower.

3.     The Collateral Agent has not made any real estate filings against any cell sites or any retail locations.

4.     The Collateral Agent has not made any real estate filings against any leased premises to the extent that a consent of the relevant landlord is required under the relevant lease, and such consent has not been provided to the Collateral Agent (it being expressly acknowledged that the Collateral Agent is under no duty to seek such consent).

5.     See the other security qualifications in the opinion of counsel to the Credit Parties delivered on the Effective Date.

TABLE OF CONTENTS

		Page
INTRODUCTORY STATEMENTS			1
ARTICLE 1
	INTERPRETATION		2
	1.1       Definitions		2
	1.2       Other Usages		9
	1.3       Plural and Singular		10
	1.4       Headings		10
	1.5       Governing Law		10
	1.6       Time of the Essence		10
	1.7       Paramountcy		10
	1.8       No Rights Conferred on Borrower		10
	1.9       Currency		10
ARTICLE 2
	SUBORDINATIONS; PRO RATA SHARING; ACKNOWLEDGEMENTS		10
	2.1       Subordinations; Application of Proceeds of Realization		10
	2.2       Mandatory Prepayments		12
	2.3       Asset Sales		15
	2.4       Prohibited Payments		16
	2.5       Permitted Payments		16
	2.6       Consent of Creditors		17
	2.7       Application of the Agreement		17
	2.8       Payments Held in Trust		17
	2.9       Pledged Shares		18
ARTICLE 3
	ENFORCEMENT AND REMEDIES		18
	3.1       Enforcement		18
	3.2       Cooperation and Information		18
	3.3       No Challenge		19
	3.4       Notice		19
ARTICLE 4
	THE COLLATERAL AGENT; MISCELLANEOUS		19

-i-

TABLE OF CONTENTS
(continued)

		Page
4.1	Authorization of Collateral Agent		19
4.2	Reliance on Writings and Legal Advice		20
4.3	Costs and Expenses		20
4.4	Authority of Collateral Agent to Act		20
4.5	Disclaimer		21
4.6	Indemnification		21
4.7	Acknowledgement of Creditors		21
4.8	Duty of Collateral Agent to Deliver Documents		22
4.9	No Association among Creditors		22
4.10	Successor Collateral Agent		22
4.11	No Third Party Rights Established		23
4.12	Waivers and Amendments		23
4.13	Severability		23
4.14	Successors and Assigns		23
4.15	Counterparts; Binding Nature		24
4.16	Further Assurances		24
4.17	Communication		24
4.18	Quebec Security		24
4.19	Entire Agreement		26

-ii- EX-4.5 14 m10142orexv4w5.htm EX-4.5

Exhibit 4.5

STOCK OPTION PLAN

OF

MICROCELL TELECOMMUNICATIONS INC.

May 1, 2003

TABLE OF CONTENTS

1.	INTERPRETATION		1
	1.1.	Definitions	1
	1.2.	Headings and References	2
	1.3.	Extended Meanings	2
	1.4.	Currency	2
	1.5.	Governing Law	2
	1.6.	Schedules	3
2.	ESTABLISHMENT OF THE PLAN		3
	2.1.	Establishment	3
	2.2.	Purpose	3
	2.3.	No Employment Rights	3
3.	GRANT OF OPTION		3
	3.1.	Grant	3
	3.2.	Delegation	4
	3.3.	Limitations on Grant	4
	3.4.	Exercise Price	4
	3.5.	No Payment on Grant	4
	3.6.	Option Agreement	5
	3.7.	Changes in Shares	5
	3.8.	Fractional Shares	5
	3.9.	Designation of Subsidiary	5
4.	EXERCISE OF OPTIONS		6
	4.1.	Exercise of Options	6
	4.2.	Vesting of Options	6
	4.3.	Death of Participant	6
	4.4.	Termination of Service	6
	4.5.	Order of Exercise	7
	4.6.	Method of Exercise and Class of Shares	7
	4.7.	Option Not Transferable	7
	4.8.	Permitted Assignments	7
5.	TERMINATION OF OPTION		8
	5.1.	Expiration of Exercise Period	8
	5.2.	Bankrupt Participant	8
6.	GENERAL		8
	6.1.	Delivery of Shares, etc.	8
	6.2.	Issuance of Shares	8
	6.3.	Administration	8
	6.4.	Incapacity	8
	6.5.	Amendment and Termination	9
	6.6.	Approvals	9
	6.7.	Reorganization	9

1.	INTERPRETATION
1.1.	Definitions

(a)	Board means the board of directors of the Corporation.
(b)	Business Day means a day, other than Saturday, Sunday or a statutory holiday, on which banks are generally open for business in Montreal, Québec and Toronto, Ontario.
(c)	Canadian means a Canadian within the meaning ascribed to such term in the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time.
(d)	Change in Control means any of the following occurrences: (a) the acquisition by any one shareholder, or group of shareholders acting jointly or in concert, of more than 50% of the outstanding voting shares of the Corporation; (b) a sale by the Corporation of all or substantially all of its assets to an unrelated third party, or other liquidation or dissolution; (c) a change in the composition of the Board involving at least one-half of the Board which occurs at the same time or within a 60 day period; or (d) a merger, consolidation, or other reorganization of the Corporation which results in the Corporation’s shareholders owning less than 50% of the voting shares of the resulting entity.
(e)	Class A Shares means the Class A Restricted Voting Shares in the capital of the Corporation.
(f)	Class B Shares means the Class B Non-Voting Shares in the capital of the Corporation.
(g)	Corporation means Microcell Telecommunications Inc., a corporation existing under the laws of Canada and any successor corporation.
(h)	Employee means a person in the full-time or part-time employ of the Corporation or a Subsidiary, including an officer of the Corporation or a Subsidiary.
(i)	Exercise Price of an Option has the meaning given to it in Section 3.4(a).
(j)	Family Member means a Participant’s spouse, minor child or minor grandchild.
(k)	Market Price of an Option means the greater of the closing price of the Class A Shares or the closing price of the Class B Shares, as the case may be, on the TSX or any other stock exchange on which the shares are listed, on the last trading day immediately preceding the date of grant of the Option (or if no Shares of any particular class were traded, the average, rounded up to the nearest cent, of the bid and ask prices for the Shares of such class at the close of trading on such day).
(l)	Option means a right to subscribe for one or more Shares pursuant to this Plan.

- 2 -

(m)	Option Agreement means the written agreement between the Corporation and a Participant evidencing the grant and acceptance of an Option substantially in the form of Schedule A.
(n)	Participant means an Employee who has been granted an Option.
(o)	Plan means this stock option plan including the Schedules, as amended from time to time.
(p)	Service Termination Date means the date on which a person ceases to be an Employee. For greater certainty, a person ceases to be an Employee at the time he/she is no longer obligated to work under the direction or control of the employer even if he/she may continue to receive payments from the employer as indemnity in lieu of notice of termination or otherwise.
(q)	Shares means Class A Shares or Class B Shares, as determined by the Board in accordance with Section 4 of this Plan.
(r)	Subsidiary of the Corporation at a particular time means a corporation that is controlled, directly or indirectly, by the Corporation and is designated as a “Subsidiary” by the Board for the purpose of this Plan.
(s)	TSX means the Toronto Stock Exchange, a division of TSX Inc. through which the senior listing operations of TSX Group Inc. are conducted.

1.2.	Headings and References
	The division of this Plan into sections and the insertion of headings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Plan.
1.3.	Extended Meanings
	Unless otherwise specified, words importing the singular include the plural and vice versa and words importing gender include all genders.
1.4.	Currency
	All references to currency or dollar amounts in this Plan are to lawful currency of Canada.
1.5.	Governing Law
	This Plan shall be governed by and interpreted in accordance with the laws of Québec and the laws of Canada applicable therein, and the Corporation and the Participants irrevocably attorn to the non-exclusive jurisdiction of the courts of Québec.

- 3 -

1.6.	Schedules
	The following Schedules are annexed to this Plan and form part of this Plan:

Schedule A	Option Agreement
Schedule B	Notice
Schedule C	Residency Declaration

2.	ESTABLISHMENT OF THE PLAN
2.1	Establishment
	The Corporation hereby establishes this Plan, effective on May 1, 2003.
2.2.	Purpose
	The purpose of this Plan is to advance the interests of the Corporation by providing Employees with a financial incentive for the continued improvement in the performance of the Corporation and encouragement to continue employment with the Corporation or a Subsidiary, as the case may be.
2.3.	No Employment Rights
	Participation in this Plan does not give any Employee the right to continue as an employee of the Corporation or a Subsidiary or any right to, or interest in, any Option or Share, except as specifically provided in this Plan. Nothing in this Plan or in any Option shall be deemed, interpreted or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or a Subsidiary, to extend the employment of any Employee beyond the time at which such Employee would normally be required to retire in accordance with any applicable employment agreement, or retirement plan or policy of the Corporation or a Subsidiary, then in effect.
3.	GRANT OF OPTION
3.1.	Grant

(a)	Subject to the provisions of this Plan, the Board may, from time to time in its discretion, determine those Employees to whom Options are to be granted, the number of Shares which may be purchased pursuant to such Options, the time or times when such Options shall vest and become exercisable, and the duration of the exercise period.
(b)	The class of Shares which may be purchased pursuant to the exercise of Options will be determined as set forth in Section 4.6.

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3.2.	Delegation
	The Board may delegate any of its responsibilities or powers under this Plan to a committee of the Board. In such event, all references to the Board in this Plan in respect of such responsibilities or powers shall be deemed to be references to the committee.
3.3.	Limitations on Grant
	The number of Shares that may be issued pursuant to Options granted under this Plan shall not exceed 187,474 Class A Shares and 2,231,831 Class B Shares or such greater number as shall have been approved by the shareholders, the Board and the TSX or any other stock exchange on which the Shares are listed.
	No Option shall be granted under the Plan if such Option together with all previously established or proposed share compensation arrangements of the Corporation could result, at any time, in:

(i)	the number of Shares reserved for issuance pursuant to stock options granted to insiders exceeding 10% of the number of Shares outstanding on a non-diluted basis immediately prior to the time of such grant excluding Shares issued pursuant to share compensation arrangements over the preceding one-year period;
(ii)	the issuance to insiders within a one-year period of a number of Shares exceeding 10% of the number of Shares outstanding immediately prior to the time of issuance excluding Shares issued pursuant to share compensation arrangements over the preceding one-year period; or
(iii)	the issuance to any one insider and such insider’s associates within a one-year period of a number of Shares exceeding 5% of the Shares outstanding on a non-diluted basis immediately prior to the time of issuance excluding Shares issued pursuant to share compensation arrangements over the preceding one-year period.

3.4. Exercise Price

(a)	Subject to paragraph 3.4(b) and applicable rules of the TSX or of any other stock exchange on which the Shares are listed, at the time that it grants an Option, the Board shall fix the price per Share payable on the exercise of the Option (the “Exercise Price”).
(b)	The Exercise Price of an Option shall not be less than the Market Price.

3.5.	No Payment on Grant
	No payment to the Corporation shall be required or made on the grant of an Option.

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3.6.	Option Agreement
	The grant and acceptance of grant of an Option shall be evidenced by the execution of an Option Agreement between the Corporation and the Participant substantially in the form of Schedule A.
3.7.	Changes in Shares
	If the Shares are subdivided, consolidated, converted or reclassified or the number of Shares varies as a result of a stock dividend, the Board shall adjust one or more of:

(a)	the number or class of Shares that may be subject to Options at any particular time;
(b)	the number or class of Shares that are subject to outstanding Options; and
(c)	the Exercise Price of outstanding Options,

	in such manner as the Board considers appropriate in the circumstances and all Option Agreements executed in respect of outstanding Options shall be deemed to have been amended accordingly without any further action or consent of the Corporation and the Employees parties to Option Agreements.
	If any Option has terminated or expired without being fully exercised, any unissued Shares which have been reserved to be issued upon the exercise of the Option shall become available to be issued upon the exercise of Options subsequently granted under the Plan.
3.8.	Fractional Shares
	No fractional shares shall be issued upon the exercise of an Option nor shall any scrip certificates in lieu therefore be issuable at any time. Accordingly, if as a result of any adjustment under Section 3.7, a Participant would otherwise have become entitled to a fractional share upon the exercise of an Option, the Participant shall have the right to purchase only the next lower whole number of Shares and no payment or other adjustment will be made with respect to the fractional interest so disregarded.
3.9.	Designation of Subsidiary
	The Board may revoke the designation of a corporation as a Subsidiary, so long as such revocation does not have retroactive effect. For the purposes of section 4.4, the Service Termination Date of a Participant who is an Employee of such corporation shall be deemed to be the date of such revocation.

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4.	EXERCISE OF OPTIONS
4.1.	Exercise of Options
	A Participant may exercise an Option, in whole or in part, at any time after the Option vests and before its expiration.
4.2.	Vesting of Options
	Subject to the provisions of this Plan, at the time that it grants an Option, the Board shall fix the vesting period of such Option.
4.3.	Death of Participant
	If a Participant dies:

(a)	subject to paragraph (c) below, any unvested Option held by the Participant at the time of the Participant’s death shall immediately terminate;
(b)	any vested Option held by the Participant at the time of the Participant’s death shall continue in effect and be exercisable as if the Participant had remained an Employee until the earlier of (a) the expiration date of the Option or (b) 180 days after the death of the Participant; and
(c)	the Board may permit the exercise of an Option even though the Option is unvested at the time of the Participant’s death for such period of time, as may be determined by the Board, but which shall in any event not be later than the earlier of (a) the expiration date of the Option or (b) 180 days after the death of the Participant.

4.4.	Termination of Service
	If a Participant ceases to be an Employee for any reason other than death then:

(a)	subject to paragraph (c) below, any unvested Option held by the Participant at the Service Termination Date shall immediately terminate;
(b)	any vested Option held by the Participant at the Service Termination Date shall continue in effect and be exercisable only for a period of 30 days after the Service Termination Date. If it is not exercised within such 30 day period, the vested Option shall terminate; and
(c)	the Board may permit the exercise of an Option even though the Option is unvested at the Service Termination Date for such period of time as may be determined by the Board but which shall in any event not be later than the expiration date of the Option.

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4.5.	Order of Exercise
	A Participant may exercise Options in any order regardless of the date of grant of the Options.
4.6.	Method of Exercise and Class of Shares

(a)

A Participant or a Participant’s heirs, executors, administrators or personal or legal representatives may exercise an Option by delivering: (i) a written notice of exercise in the form attached as Schedule B together with payment in full of the Exercise Price for all Shares in respect of which the Option is being exercised to the Secretary of the Corporation at the registered office of the Corporation in the City of Montreal, Québec; and (ii) a residency declaration in the form provided in Schedule C whereby the Participant certifies whether he/she is a Canadian or a non-Canadian.

(b)

The Option shall be deemed to have been exercised upon actual receipt by the Secretary of the Corporation of the materials referred to in Sections 4.6(a) and payment in full of the Exercise Price for such Shares. A Participant who is a Canadian at the time of exercise will be issued Class A Shares and a Participant who is a non-Canadian at the time of exercise will be issued Class B Shares. Upon exercise, an Option shall be cancelled.

4.7.	Option Not Transferable
	Subject to Section 4.8, an Option granted under this Plan shall be transferable only by will or by the laws of intestacy and shall be exercisable, during the lifetime of the Participant to whom the Option is granted, only by the Participant (or, during any period in which the Participant lacks capacity, by the Participant’s personal or legal representatives) and, upon the death of the Participant, by the Participant’s heirs, executors, administrators or personal or legal representatives. No Option and none of the rights and privileges thereby conferred shall be transferred, assigned, pledged, hypothecated in any way or made the subject of any security of any kind whatever (whether by operation of law or otherwise), and no Option and none of the rights and privileges thereby conferred shall be subject to execution, attachment or similar process. Upon any attempt by a Participant to so transfer, assign, pledge, hypothecate, make subject to a security or otherwise dispose of an Option or any of the rights and privileges thereby conferred contrary to the provisions hereof, or upon the levy of any execution, attachment or similar process upon an Option or any of the rights and privileges thereby conferred, the Option and such rights and privileges shall immediately terminate and cease to be exercisable.
4.8.	Permitted Assignments
	Subject to the prior approval of the Board or, as the case may be, the committee of the Board, a Participant may transfer Options to his or her Family Member, (i) his or her registered retirement savings plan, which is established for the sole benefit of the Participant, (ii) a family trust (if he or she is a trustee and no person, other than the Participant or a Family Member of the Participant, is a beneficiary), (iii) a wholly-owned

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	corporation, or (iv) a corporation controlled by the Participant and all of the minority shareholders are Family Members of the Participant, provided, that, in any such case, the transfer is permitted by, and is effected in accordance with the then applicable policies of the Toronto Stock Exchange. Upon any such permitted transfer, the transferred Options shall be deemed, for purposes of the Plan, to continue to be held by the Participant, and shall continue to be subject to the terms and conditions of the Plan as if the Participant remained the sole holder thereof.
5.	TERMINATION OF OPTION
5.1.	Expiration of Exercise Period
	Options shall expire on the date specified in the Option Agreement or on the date specified in Section 4.3 or 4.4 and, in any event, the term of an Option shall not exceed 10 years from the date of grant.
5.2.	Bankrupt Participant
	If a Participant becomes bankrupt within the meaning of the Bankruptcy and Insolvency Act (Canada) or any other applicable bankruptcy legislation, any unexercised Option held by such Participant shall immediately terminate and cease to be exercisable.
6.	GENERAL
6.1.	Delivery of Shares, etc.
	Any Shares to be issued to a Participant pursuant to the exercise of an Option shall be issued not later than 30 days after the date of exercise of the Option.
6.2.	Issuance of Shares
	Any issue of Shares under this Plan shall be subject to applicable law and to prior receipt of all necessary or appropriate consents, if any, of any governmental or regulatory authorities or agencies.
6.3.	Administration
	Subject to Section 3.2, this Plan shall be administered by the Board which may prescribe rules and regulations respecting this Plan. The Board has the exclusive authority to interpret and construe this Plan and to determine all questions respecting this Plan or any Option. Any such interpretation, construction or determination shall be final, binding and conclusive for all purposes in respect of all persons affected thereby. The Board may take such other actions as it considers necessary or desirable in respect of this Plan.
6.4.	Incapacity
	If a person to whom Shares are to be delivered or a payment made under this Plan is a minor or is physically or mentally incapable of giving a valid receipt, delivery or

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	payment may instead be made to a person having the legal care or custody of the person to whom delivery or payment is to be made and any such delivery or payment constitutes a complete discharge of the obligation to make such delivery or payment. Any delivery or payment so made shall be deemed to be a delivery or payment made to the person entitled to such delivery or payment. Once such delivery or payment is made, no further claim may be made in respect of such delivery or payment by any person whatsoever against: (a) the Corporation, (b) any of the Corporation’s affiliates or subsidiaries, (c) any of the Corporation’s or any of its affiliates’ or subsidiaries’ directors, officers, employees or agents, or (d) this Plan.
6.5.	Amendment and Termination
	The Board may at any time by resolution amend, suspend or terminate this Plan in any manner whatsoever, except that, subject to the provisions of Section 6.7, no such amendment, suspension or termination shall adversely affect the terms of any Option previously granted and not yet exercised or expired, without the written consent of the affected Participants.
6.6.	Approvals
	This Plan and any amendments hereto shall be subject to the approval of the Board and any other approvals required by applicable law or the requirements of any stock exchange upon which the Shares are listed. Any Option granted prior to receipt of any such approval shall be conditional upon such approval being given and no Option may be exercised until such approval is given. Notwithstanding any other term of this Plan, the Corporation is not obliged to take any action or to refrain from taking any action if such action (or refraining therefrom) would result in a breach of any applicable law, regulation, judgment, directive, rule, consent, approval, authorization, guideline, order or policy of any governmental or other regulatory authority (including any stock exchange upon which the Shares are listed).
6.7.	Reorganization
	In the event of a Change in Control, a reorganization of the Corporation, an amalgamation of the Corporation, an arrangement involving the Corporation, a take-over bid (as that term is defined in the Securities Act (Québec)) for all of the Shares or the sale or disposition of all or substantially all of the property and assets of the Corporation, the Board may make such provision for the protection of the rights of the Participants as the Board in its discretion considers appropriate in the circumstances, including changing the date on which any Option vests and/or the date on which any Option expires.

SCHEDULE A

Form of Option Agreement

This option agreement is entered into between Microcell Telecommunications Inc. (the “Corporation”) and the Participant named below pursuant to the Stock Option Plan of the Corporation (the “Plan”).

This agreement evidences that on               the Participant has been granted an Option to purchase               Shares at an Exercise Price of $               per Share.

The Option vests in the Participant and, subject to early expiry in the event of death or termination of service, expires as follows:

Number of Shares Vesting Date Expiry Date

The Option is subject to the terms of the Plan. Capitalized terms used but not defined in this certificate have the meanings given to them in the Plan.

This agreement and all related documents have been drawn up in the English language at the specific request of the parties hereto. Ce contrat et tous les documents relatifs ont été rédigés dans la langue anglaise à la demande expresse des parties aux présentes.

     And the parties have signed as of               .

MICROCELL TELECOMMUNICATIONS INC.
By:
	Name:
	Title:
Acknowledged and accepted by:
Name of Participant

SCHEDULE B

Notice

TO:                Secretary of Microcell Telecommunications Inc.

I refer to the Option to purchase               Shares at an Exercise Price of $               per Share (the “Exercise Price”) pursuant to the Stock Option Plan of Microcell Telecommunications Inc. (the “Plan”) that was granted to me on               and is evidenced by a Stock option agreement executed as of               .

Capitalized terms used but not defined in this notice have the meanings given to them in the Plan.

I hereby exercise the Option in respect of               Shares (the “Exercised Shares”) thereby subscribing for the Exercised Shares at a subscription price per Exercised Share equal to the Exercise Price for an aggregate subscription price of $               (the “Subscription Price”).

Please register               Exercised Shares in my name and forward the share certificate evidencing such Exercised Shares to me at the address noted below. A cheque in the amount of $                on account of the Subscription Price is attached to this notice.

Address of Participant (PLEASE PRINT)	Name of Participant (PLEASE PRINT)
	Signature of Participant
	Date

SCHEDULE C

FORM OF RESIDENCY DECLARATION

TO:                Microcell Telecommunications Inc.

In connection with the Stock Option Plan of Microcell Telecommunications Inc., the undersigned, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered, hereby DECLARES and REPRESENTS that:

o  the undersigned is Canadian as defined herein, OR

o  if other than the undersigned is not Canadian as defined herein.

For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2(1) of the Citizenship Act (Canada) who is ordinarily resident in Canada; or
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship.

DATED the               day of 20               .

Name:
Address:

EX-4.6 15 m10142orexv4w6.htm EX-4.6

Exhibit 4.6

EMPLOYEE STOCK PURCHASE PLAN

OF

MICROCELL TELECOMMUNICATIONS INC.

May 1, 2003

TABLE OF CONTENTS

1.	DEFINITIONS AND INTERPRETATION		1
	1.1	Definitions	1
	1.2	Headings and References	2
	1.3	Extended Meanings	2
	1.4	Currency	2
	1.5	Governing Law	2
	1.6	Schedules	2
2.	ESTABLISHMENT OF THIS PLAN		3
	2.1	Establishment	3
	2.2	Purpose	3
	2.3	No Employment Rights	3
3.	PARTICIPATION		3
	3.1	Election to Participate	4
	3.2	Participant’s Contribution	4
	3.3	Modification of Contribution	4
	3.4	Discontinuance of Contribution	4
4.	CORPORATION’S CONTRIBUTIONS		5
	4.1	Level of Contribution	5
	4.2	Option of the Corporation	5
	4.3	Issue Price	6
5.	LIMITATIONS		6
	5.1	Maximum Number	6
	5.2	Fractional Shares	6
	5.3	Individual Limit	6
	5.4	Collective Limit	6
6.	PURCHASE OF SHARES		6
	6.1	Purchase Price	6
	6.2	Purchase of Shares	6
	6.3	Brokerage Fees	7
	6.4	Accounts and Statements	7
	6.5	Participant’s Rights in Shares Held by the Administrative Agent	7
7.	SALE OF SHARES OR WITHDRAWAL		7
	7.1	Election to Dispose	7
	7.2	Sale of Shares	7
	7.3	Withdrawals	8
	7.4	Brokerage Fees	8
	7.5	Fractional Shares	8

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8.	TERMINATION		8
	8.1	Death or Retirement of Participant	8
	8.2	Leave of Absence	9
	8.3	Loss of Eligibility	9
9.	GENERAL		9
	9.1	Rights not Transferable	9
	9.2	Administration	10
	9.3	No Liability	10
	9.4	Designation of Subsidiary	10
	9.5	Incapacity	10
	9.6	Amendment and Termination	10
	9.7	Approvals	11
	9.8	Income Taxes	11
	9.9	Offer for Shares	11
	9.10	Notice	11

1.	DEFINITIONS AND INTERPRETATION
	1.1	Definitions
		In this Plan, the following terms have the following respective meanings:

(a)	Administrative Agent means a person appointed by the Board with a view of assisting in the administration and record keeping required to be performed under this Plan.
(b)	Amendment to the Participation Agreement means the amendment to the Participation Agreement in the form annexed as Schedule C.
(c)	Board means the board of directors of the Corporation or the Human Resources Committee or any other committee designated by the board of directors to administer this Plan.
(d)	Calculation Date means for each Year, June 30 of the following year.
(e)	Canadian means a Canadian within the meaning ascribed to such term in the Telecommunications Act (Canada) S.C. 1993, c. 38 and the regulations thereunder, as amended from time to time.
(f)	Class A Shares means the Class A Restricted Voting Shares in the capital of the Corporation.
(g)	Class B Shares means the Class B Non-Voting Shares in the capital of the Corporation.
(h)	Corporation means Microcell Telecommunications Inc., a corporation existing under the laws of Canada and any successor corporation.
(i)	Employee means a person in the permanent full-time or permanent part-time employ of the Corporation or a Subsidiary, including an officer of the Corporation or a Subsidiary.
(j)	Notice of Discontinuance means a notice of discontinuance of contributions to this Plan in the form annexed as Schedule D.
(k)	Notice of Disposition or Withdraw means a notice of an election to dispose of Shares in the form annexed as Schedule E.
(l)	Participant means an Employee who, pursuant to Section 3.1, has elected to participate in this Plan and is eligible.
(m)	Participation Agreement means the agreement between the Corporation and a Participant in the form annexed as Schedule A, as amended from time to time.

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(n)	Participation Period means any one of the four periods of time consisting of the last fifteen days of the month of March, June, September and December of each Year.
(o)	Plan means this Employee Stock Purchase Plan, as amended from time to time including any Schedule thereto.
(p)	Residency Declaration means a declaration by Participant whether he is Canadian or non-Canadian in the form annexed as Schedule B.
(q)	Salary means the gross base annual salary actually agreed to be paid by the Corporation or a Subsidiary to the Employee.
(r)	Shares means Class A Shares or Class B Shares of the Corporation, as the case may be.
(s)	Subsidiary means a corporation that is controlled, directly or indirectly, by the Corporation and is designated as a “Subsidiary” by the Board for the purpose of this Plan.
(t)	Year means a calendar year.

1.2	Headings and References
	The table of contents and the headings have been inserted in this Plan for ease of reference and shall not be used to interpret, define or limit the scope, the meaning or the intention of this Plan.
1.3	Extended Meanings
	Unless otherwise specified, words importing the singular include the plural and vice versa and words importing gender include all genders.
1.4	Currency
	Every reference to currency shall be a reference to Canadian currency.
1.5	Governing Law
	This Plan shall be governed by and interpreted in accordance with the laws of the Province of Québec and the laws of Canada applicable therein, and the Corporation and each Participant irrevocably accepts the non-exclusive jurisdiction of the courts of Québec.

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1.6	Schedules
	The following Schedules are annexed to this Plan and form part of this Plan:

Schedule A	Participation Agreement
Schedule B	Residency Declaration
Schedule C	Amendment to the Participation Agreement
Schedule D	Notice of Discontinuance
Schedule E	Notice of Disposition or Withdraw

2. ESTABLISHMENT OF THIS PLAN

2.1	Establishment
	The Corporation hereby establishes this Plan effective May 1, 2003.
2.2	Purpose
	The purpose of this Plan is to advance the interests of the Corporation by giving Employees an opportunity to participate in the ownership of the Corporation with the following objectives:

(a)	to develop Employee awareness of, and responsibility for the Corporation’s financial results;
(b)	to enhance Employee involvement and entrepreneurship; and
(c)	to encourage Employees to think and act like shareholders.

2.3	No Employment Rights
	This Plan does not give any Employee, whether a Participant or not, the right to remain an employee of the Corporation or a Subsidiary or any right to, or interest in, any Shares, except as specifically provided in this Plan. Nothing in this Plan shall be deemed, interpreted or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or a Subsidiary, to extend the employment of any Employee beyond the time at which such Employee would normally be required to retire in accordance with any applicable employment agreement, or retirement plan or policy of the Corporation or a Subsidiary, then in effect.
2.4	Assumption of Obligations
The Corporation hereby assumes any and all outstanding obligations of 2861399 Canada Inc. (formerly, Microcell Telecommunications Inc.), a wholly-owned subsidiary of the Corporation, pursuant to and under the employee stock purchase plan of 2861399 Canada Inc. adopted on March 9, 2000, as amended, with such adjustments as may be necessary to give full effect to the assumption herein contemplated.

3.	PARTICIPATION
	Participation in this Plan is entirely voluntary and any decision not to participate will not affect an Employee’s employment with the Corporation.

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3.1	Election to Participate
	An Employee must be actively at work or on maternity/parental leave of absence in order to elect to participate in this Plan and in order to make contributions to this Plan.
	An Employee who elects to participate in this Plan must complete and execute a Participation Agreement and a Residency Declaration and deliver same to the Corporation during a Participation Period. When signed by the Corporation, the Participation Agreement governs the purchase of Shares by the Employee as a Participant.
	Based on the Residency Declaration provided by a Participant, contributions of a Participant under this Plan shall be used to purchase Class A Shares, if Canadian, or Class B Shares, if non-Canadian.
3.2	Participant’s Contribution
	Subject to Section 5, each Participant may contribute during each Year up to 10%, in whole percentages only, of his Salary for the Year to purchase Shares pursuant to this Plan.
	If an Employee has not been a Participant for an entire Year, the Salary will be adjusted in proportion to the number of days during the applicable Year during which the Employee was a Participant.
	A Participant’s contributions will be withheld at source by the Corporation by way of scheduled payroll deductions based on the percentage of Salary representing the Participant’s chosen level of contribution and will be remitted to the Administrative Agent for purchase of Shares pursuant to Section 6.
3.3	Modification of Contribution
	During a Participation Period, a Participant may modify his level of contribution by submitting to the Corporation a Participation Agreement Amendment. When signed by the Corporation, any Participation Agreement Amendment shall thereafter govern the purchase of Shares by the Participant. A Participant’s level of contribution may not be amended more than twice during the same Year.
3.4	Discontinuance of Contribution
	A Participant may, at any time, discontinue his contribution by submitting to the Corporation a Notice of Discontinuance. The Notice of Discontinuance must be received by the Corporation before the fifteenth (15th) of the month for discontinuance to be effective on the first pay period of the following month.
	Not later than ninety (90) days following the effective date of discontinuance, the former Participant will receive from the Administrative Agent all accumulated

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contribution amounts not yet used to purchase Shares and will receive from the Corporation all of the former Participant’s contributions not yet remitted to the Administrative Agent. All such payments will be made without interest.

A Participant who discontinues his contribution under this Plan ceases to be a Participant on the effective date of the discontinuance. A former Participant cannot elect to participate again in this Plan until six months following the effective date of the discontinuance. Any such election shall be made in accordance with the provisions of Section 3.1.

4. CORPORATION’S CONTRIBUTIONS

4.1	Level of Contribution
	The Corporation shall make a contribution in Shares for the benefit of the Participant under this Plan if (i) a Participant has made a contribution under this Plan in a Year and is still an Employee on the Calculation Date and (ii) if the Shares purchased with the Participant’s contributions during the Year are still held by the Administrative Agent for the benefit of the Participant-on the Calculation Date.
	If a Participant’s contribution was five percent (5%) or less of his Salary, the Corporation shall make a contribution in Shares for the benefit of the Participant equal to one-third (1/3) of the number of Shares purchased with the Participant’s contribution during the Year.
	If a Participant’s contribution was more than five percent (5%) of his Salary for the Year, the number of Shares purchased with the Participant’s contribution used to calculate the Corporation’s contribution will be reduced by multiplying it by five (5) and dividing it by the number of his percentage of Salary contribution. For example, if the Participant’s contribution is based on ten percent (10%) of his Salary and if the number of Shares purchased during the Year is ninety (90), the number of Shares used to calculate the Corporation’s contribution will be:
	90 x 5 ÷ 10 = 45 and the Corporation’s contribution will be 45 ÷ 3 = 15.
4.2	Option of the Corporation
	The Corporation may choose to make its contribution in Shares from treasury or to deposit with the Administrative Agent sufficient funds to enable the Administrative Agent to purchase the appropriate number of Shares in the market. In the latter case, the Administrative Agent shall purchase the Shares through a broker designated by the Corporation. If the Corporation’s contributions are used to purchase Shares at difference prices, the Shares shall be credited to each Participant’s account at their average purchase price.

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4.3	Issue Price
	If the Shares contributed by the Corporation are issued from treasury, they will be allocated to each Participant’s account at a purchase price determined by the Board on the basis of the average closing price of the Class A Shares or the average closing price of the Class B Shares, as the case may be, on the Toronto Stock Exchange for the five trading days preceding the Calculation Date

5. LIMITATIONS

5.1	Maximum Number
	The total number of treasury Class A Shares and Class B Shares that can be issued by the Corporation in order to make its contribution pursuant to this Plan will not exceed 250,000.
5.2	Fractional Shares
	No fractional treasury Shares can be issued by the Corporation and the Board may determine the manner in which any fractional Share value will be treated.
5.3	Individual Limit
	An Employee cannot, under the terms of this Plan together with any other stock purchase plan or stock option plan of the Corporation, acquire more than 5% of the issued and outstanding Class A Shares and Class B Shares of the Corporation.
5.4	Collective Limit
	Employees who are insiders of the Corporation cannot, under the terms of this Plan together with any other stock purchase plan or stock option plan of the Corporation, acquire more than 10% of the issued and outstanding Class A Shares and Class B Shares of the Corporation.

6. PURCHASE OF SHARES

6.1	Purchase Price
	The price paid for the purchase of Shares on the market will be equal to one hundred percent (100%) of the market price thereof at the time of purchase.
6.2	Purchase of Shares
	The Administrative Agent will use the Participant’s contributions to purchase Shares on the market every month. The Administrative Agent will purchase the Shares through the stockbroker designated by the Corporation. The Shares purchased during a period will be credited to the Participant’s account within the

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	first ten (10) calendar days following the said period at the average purchase price of all Shares purchased during such period.
6.3	Brokerage Fees
	The Corporation will pay all brokerage fees at the time of purchase of the Shares under this Plan. In all other circumstances, the Participant shall be responsible for the payment of any brokerage fees.
6.4	Accounts and Statements
	The Administrative Agent will maintain records indicating, for each Participant, the number of Shares purchased and the Corporation’s contributions. The Administrative Agent will furnish to the Participant periodical statements indicating thereon the number of Shares held by the Administrative Agent on his behalf, and all other relevant information at the discretion of the Corporation. Each of such statements will be deemed to have been accepted by the Participant as correct unless written notice to the contrary is received by the Administrative Agent within thirty (30) days after the mailing of such statements to the Participant.
6.5	Participant’s Rights in Shares Held by the Administrative Agent
	All funds and Shares held by the Administrative Agent pursuant to this Plan are held for the benefit of each Participant. A Participant will be the beneficial owner of Shares purchased on his behalf.
	The Administrative Agent will send to a Participant any dividend as well as any documentation received on his behalf.

7. SALE OF SHARES OR WITHDRAWAL

7.1	Election to Dispose
	Not more than twice a Year, a Participant may elect to have the Administrative Agent sell or withdraw all or a portion of the Shares (in whole numbers) held by the Administrative Agent on his behalf by giving to the Administrative Agent a Notice of Disposition or Withdraw.
	For the purpose of this Plan, all Shares sold by the Administrative Agent or withdrawn shall be deemed to be sold or withdrawn, as the case may be, on the basis that the first Shares purchased by the Participant are the first Shares sold or withdrawn.
7.2	Sale of Shares
	In the case of a sale, the Administrative Agent will sell the Shares through a stockbroker designated by the Corporation and remit the proceeds, less any applicable fees and expenses, to the Participant.

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7.3	Withdrawals
	In the case of a withdrawal, the Administrative Agent will remit to the Participant a certificate representing the Shares requested to be withdrawn.
7.4	Brokerage Fees
	The Participant shall pay all brokerage fees at the time of sale of Shares under this Plan.
7.5	Fractional Shares
	In the case of a sale or withdrawal of all of the Shares of an Employee as a result of the Employee ceasing to be a Participant, any fractions of Shares held by the Administrative Agent on his behalf will be paid in cash.

8. TERMINATION

8.1	Death or Retirement of Participant
	If a Participant dies or ceases to be an Employee by reason of mandatory retirement:

(a)	the Participant will immediately cease to be a Participant and payroll deductions will stop immediately;
(b)	the Participant or his beneficiaries shall be entitled to receive from the Corporation all accumulated amounts not yet remitted to the Administrative Agent without interest;
(c)	the Participant or his beneficiaries shall be entitled to receive from the Administrative Agent, all accumulated amounts not yet used to purchase Shares without interest;
(d)	the Participant or his beneficiaries shall be entitled to the Corporation’s contributions for the year preceding his death or retirement even if this event occurs before the Calculation Date;
(e)	the Participant or his beneficiaries shall be entitled to the Corporation’s contributions for the Year of his death or retirement. The calculation of the Corporation’s contribution will be adjusted in proportion to the number of days elapsed from the beginning of the Year until the day when he ceased to be a Participant. The issue price will be calculated in the manner determined in Section 4.3 but using the date when he ceased to be a Participant instead of the Calculation Date; and
(f)	the Participant or his beneficiaries will have (12) months following the date of death or retirement to request either a withdrawal or the sale of

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all Shares held by the Administrative Agent in the manner set forth in Section 7.

8.2	Leave of Absence
	A Participant on maternity/parental leave of absence may elect to continue his contributions under this Plan during the period of leave by sending a notice to the Corporation of such decision before he leaves or within a reasonable delay afterwards.
8.3	Loss of Eligibility
	If a Participant ceases to be an Employee for any reason other than the events mentioned in Section 8.1, then:

(a)	the Participant will immediately cease to be a Participant and payroll deductions will stop immediately;
(b)	the former Participant shall be entitled to receive from the Corporation all accumulated amounts not yet remitted to the Administrative Agent without interest;
(c)	the former Participant shall be entitled to receive from the Administrative Agent, all accumulated amounts not yet used to purchase Shares without interest;
(d)	the former Participant shall not be entitled to the Corporation’s contribution not yet made at the time of loss of eligibility; and
(e)	The former Participant will immediately withdraw all of his Shares in the manner set forth in Section 7.

9. GENERAL

9.1	Rights not Transferable
	The rights of a Participant under this Plan shall be transferable only by will or by the laws of intestacy and shall be exercisable, during the lifetime of the Participant, only by the Participant (or, during any period in which the Participant lacks capacity, by the Participant’s personal or legal representatives) and, upon the death of the Participant, by the Participant’s heirs, executors, administrators or legal representatives.
	Except as specifically provided in the preceding paragraph, none of the rights and privileges conferred under this Plan shall be transferred, assigned, pledged, hypothecated in any way or made the subject of any security of any kind whatever (whether by operation of law or otherwise), and none of the rights and privileges conferred under this Plan shall be subject to execution, attachment or

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	similar process. Upon any contravention to these provisions, such rights and privileges shall immediately terminate and cease to be exercisable.
9.2	Administration
	This Plan shall be administered by the Board, which may prescribe rules and regulations respecting this Plan. The Board has the exclusive authority to interpret and construe this Plan and to determine all questions respecting this Plan or any rights and privileges thereby conferred. Any such interpretation, construction or determination will be final, binding and conclusive for all purposes in respect of all persons affected thereby. The Board may take such other actions as it considers necessary or desirable in respect of this Plan.
	Except as otherwise provided for in this Plan or the agreement with the Administrative Agent, the Corporation shall pay all administrative costs of this Plan.
9.3	No Liability
	Neither the Corporation nor the Administrative Agent shall be liable to any Participant for any loss resulting from a decline in the market value of any Shares purchased by the Administrative Agent for a Participant or contributed by the Corporation.
9.4	Designation of Subsidiary
	The Board may revoke the designation of a corporation as a Subsidiary, so long as such revocation does not have retroactive effect. A Participant who is an Employee of such corporation shall be deemed to have ceased to be an Employee at the time of such revocation and the provisions of Section 8.3 will apply.
9.5	Incapacity
	If a person to whom Shares are to be delivered or a payment made under this Plan is physically or mentally incapable of giving a valid receipt, delivery or payment may instead be made to a person having the legal care or custody of the person to whom delivery or payment is to be made and any such delivery or payment constitutes a complete discharge of the obligation to make such delivery or payment. Once such delivery or payment is made, no further claim may be made in respect of such delivery or payment by any person whatsoever against: (a) the Corporation, (b) the Administrative Agent, (c) any of the Corporation’s directors, officers, or agents, or (d) this Plan.
9.6	Amendment and Termination
	The Board may at any time by resolution amend, suspend or terminate this Plan in any manner whatsoever, except that no such amendment, suspension or

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	termination shall retroactively adversely affect the rights of a Participant or former Participant, without the written consent of the affected Participants.
	If this Plan is terminated, all Shares and cash belonging to a Participant as shown in the Participant’s account shall be paid to the Participant.
9.7	Approvals
	This Plan and any amendments hereto shall be subject to the prior receipt of all necessary or appropriate consents, if any, of any governmental or regulatory authorities or agencies. Any rights granted prior to receipt of any such approvals shall be conditional upon such approvals being given and no Shares may be issued by the Corporation until such approvals are given. Notwithstanding any other term of this Plan, the Corporation is not obliged to take any action or to refrain from taking any action if such action (or refraining therefrom) would result in a breach of any applicable law, regulation, judgement, directive, rule, consent, approval, authorisation, guideline, order or policy of any governmental or other regulatory authority (including any stock exchange on which the Shares are listed).
9.8	Income Taxes
	Each Participant shall be responsible for paying all income and other taxes applicable to Share contributions made by the Corporation for his benefit and to transactions involving the Shares of the Participant.
9.9	Offer for Shares
	In the event that, at any time, an offer to purchase is made to all holders of Shares, notice of such offer shall be given by the Administrative Agent to each Participant.
9.10	Notice
	Any written notice or other communication which must be given or addressed under this Plan is deemed to have been validly given or received on the fifth (5th) day following the date of its mailing, at the address of the Corporation or of the Administrative Agent or of the Participant, as the case may be, mentioned hereafter or in the Participation Agreement or at any other address having been indicated, following a change of address made in accordance with this Section.
	Notices can be validly given by fax, by e-mail or by physical delivery in which case, they are deemed to have been received on the date of transmission or delivery. The address for notification of the Corporation and the Administrative Agent are the following:

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MICROCELL TELECOMMUNICATIONS INC. Attention: Human Resources Department
Postal address:	800 de la Gauchetière Street West Suite 4000
	Montreal, Quebec, H5A 1K3
Fax number: (514) 221-2232
E-mail address: compensation.benefits@microcell.ca
COMPUTERSHARE TRUST COMPANY OF CANADA
Attention: Mr. Ken Schaffer
Postal address:	Computershare Trust Company of Canada
	1500 University Street
	Suite 700
	Montreal, Quebec, H3A 3S8
Fax number: (514) 982-7895
E-mail address: ken.schaffer@computershare.com

SCHEDULE A

PARTICIPATION AGREEMENT

This agreement is entered into between Microcell Telecommunications Inc. (the “Corporation”) and the Employee (the “Participant”) pursuant to the Employee Stock Purchase Plan of the Corporation (the “Plan”).

The Participant elects to participate in the Plan and agrees to contribute          percent (maximum of 10%, in whole percentages only) of his Salary pursuant to the Plan.

The Participant understands that his contribution to the Plan shall be used to purchase Class A Shares if Canadian or Class B Shares if non-Canadian based on the Residency Declaration of the Participant provided by the Participant.

The Participant understands that he may change the level of his contribution only twice a year in accordance with the Plan and only by submitting to the Corporation an Amendment to the Participation Agreement.

The Participant understands that his contribution will be made by payroll deduction and will be remitted to the Administrative Agent for purchase of Shares pursuant to the Plan and hereby authorises the Corporation or the Subsidiary that employs him to make such deductions.

The Participant understands and agrees that no Shares will be issued to him until the purchase price of such Shares has been paid in full and that this agreement will terminate immediately if he ceases to be eligible. Subject to any other rights that the Participant may have pursuant to the Plan, upon termination of his participation to the Plan any cash balance remaining on account of proposed purchases of Shares that cannot be completed will be refunded to him.

This agreement is subject to the terms of the Plan. Capitalised terms used but not defined in this agreement have the meanings given to them in the Plan.

This agreement has been drawn up in the English language at the specific request of the parties hereto. Ce contrat a été rédigé dans la langue anglaise à la demande expresse des parties aux présentes.

Signed on	Acknowledged and accepted by the Corporation on
	Microcell Telecommunications Inc.
Name of Employee
Address:	By:
	Name:
	Title:

SCHEDULE B

FORM OF RESIDENCY DECLARATION

TO:	Microcell Telecommunications Inc.
	In connection with the Employee Stock Purchase Plan (the “Plan”) of Microcell Telecommunications Inc., the undersigned Participant under the Plan, being the person in whose name shares in the capital of Microcell Telecommunications Inc. (the “Shares”) are to be registered, hereby DECLARES and REPRESENTS that:
	o the undersigned is Canadian (as defined herein), OR
	o the undersigned is not Canadian (as defined herein).
	For purposes of this residency declaration “Canadian” means:

(a)	a citizen within the meaning of subsection 2(1) of the Citizenship Act (Canada) who is ordinarily resident in Canada; or
(b)	a permanent resident within the meaning of subsection 2(1) of the Immigration Act (Canada) who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship.

DATED the           day of           20   .

Name:
Address:

SCHEDULE C

AMENDMENT TO THE PARTICIPATION AGREEMENT

This amendment to the participation agreement is entered into between Microcell Telecommunications Inc. (the “Corporation”) and the Participant pursuant to the Employee Stock Purchase Plan of the Corporation (the “Plan”).

As indicated in the Participation Agreement entered into between the Participant and the Corporation, the Participant has elected to participate in this Plan and has agreed to contribute      percent of his Salary to purchase Shares of the Corporation pursuant to the Plan.

The Participant now elects to modify the level of his contribution to      percent of his Salary.

The Participant hereby authorises the Corporation or the Subsidiary that employs him to make the appropriate changes to the existing payroll deduction pursuant to the Plan.

This amendment to the participation agreement is subject to the terms of the Plan. Capitalized terms used but not defined in this amendment have the meanings given to them in the Plan.

This amendment has been drawn up in the English language at the specific request of the parties hereto. Cet amendement a été rédigé dans la langue anglaise à la demande expresse des parties aux présentes.

Signed on	Acknowledged and accepted by the Corporation on
	Microcell Telecommunications Inc.
Name of Participant
Address:	By:
	Name:
	Title:

SCHEDULE D

NOTICE OF DISCONTINUANCE

TO: Human Resources Department of Microcell Telecommunications Inc. (the “Corporation”)

The Participant hereby notifies the Corporation that it elects to discontinue his/her contributions to the Plan.

The Participant acknowledges that this notice of discontinuance is subject to the terms of the Plan, including, without limitation, the provisions of Section 3.4 of the Plan.

Signed on

Name of Employee

SCHEDULE E

NOTICE OF DISPOSITION OR WITHDRAW

TO: Computershare Trust Company of Canada (the “Administrative Agent”)

The undersigned is a Participant pursuant to the Employee Stock Purchase Plan of the Corporation (the “Plan”).

Check box to indicate applicable request.

o The Participant hereby instructs the Trustee to sell           Shares held by the Trustee for the benefit of the Participant and to remit the proceeds of the sale to the Participant in accordance with the provisions of the Plan.

o The Participant hereby instructs the Trustee to withdraw          Shares held by the Trustee for the benefit of the Participant and to deliver to the Participant a share certificate evidencing said Shares in accordance with the provisions of the Plan.

Signed on

Name of Participant

EX-4.7 16 m10142orexv4w7.htm EX-4.7

EXHIBIT 4.7

Industry Canada’s Licence Conditions for
Personal Communications Service (PCS) Licensees

The following conditions apply to all licensees for personal communications services in the 2 GHz range (PCS licensees).

1.0 Full National Coverage

1.1 In order to realize the Government’s objective of full national coverage, you must implement your system substantially in accordance with the full five-year plan contained in your detailed submissions to the Department notwithstanding any stated conditions therein. In addition, you and any entities with which you have submitted an application for 2 GHz PCS, must offer a reasonable level of service in all regions of Canada within two years of the date of this authorization.

2.0 Research and Development

2.1 You must substantially honour research and development commitments made in your detailed submission. As a minimum, you must invest an average of 2 per cent of your adjusted gross revenue resulting from your 2 GHz PCS operations on PCS-related research and development activities averaged over the next five years. Eligible research and development is that which meets the definition adopted by Revenue Canada.

Adjusted gross revenues are defined as total service revenues less inter-carrier payments, bad debt, third party commissions, and provincial and goods and services taxes collected.

3.0 Other Commitments

3.1 You must substantially honour all other commitments made in your detailed submission.

4.0 Ownership and Control

4.1 You must comply with the eligibility criteria as set out in section 16 of the Telecommunications Act and the Canadian Telecommunications Common Carrier Ownership and Control Regulations.

You must notify the Minister of any change which would have a material effect on your ownership or control in fact. Such notification must be made in advance for any of the proposed transactions within your knowledge.

5.0 Annual Reporting

5.1 You must submit an annual report for each of the first five years indicating your continued compliance with these licence conditions including:

- an update on the implementation of PCS in the areas outlined in your detailed submission including a summary of notices to displace incumbent microwave licensees, showing their respective status and proposed PCS in-service dates;

- an audited statement of research and development expenditures as required in condition 2.0 above for the fiscal year covered by the report;

- a description of research and development activities including their distribution in Canada’s regions;

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- an update on the number of subscribers and their distribution across your service area;

- an update on the actual direct and indirect jobs created with respect to PCS, including their distribution across Canada;

- a description of direct investments undertaken with respect to PCS;

- an update on any other commitments made in your detailed submission; and

- a copy of any existing corporate annual report for your fiscal year with respect to this authorization.

The reports are to be submitted, in writing within 120 days of your fiscal year end, to the Director, Spectrum Management Operations, Radiocommunications and Broadcasting Regulatory Branch.

6.0 Provision of Lawful Interception

6.1 You shall, from the inception of service, provide for and maintain lawful interception capabilities as authorized by law.

• The requirements for lawful interception capabilities are provided in the Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications (Rev. Nov.95). These standards may be amended from time to time following consultation with the Solicitor General of Canada and the licensees.

• You may request the Minister to forbear from enforcing certain assistance capability requirements for a limited period. The Minister following consultation with the Solicitor General of Canada, may exercise his power to forbear from enforcing a requirement or requirements where in the opinion of the Minister, the requirement(s) is (are) not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to requirement(s) can be expected.

7.0 Microwave Transition

7.1 You must comply with the transition policy and relocation procedure for the relocation of incumbent microwave stations.

8.0 Commencement of Service

8.1 If you are a cellular licensee, or its affiliate, you may only offer any PCS service to the public within each of the 25 Census Metropolitan Areas (CMAs) at such time as:

(i)  conditions 8.2 through 8.5 are met; and

(ii)  either:

PCS service at 2 GHz is available to the public within that CMA by a non-cellular PCS licensee; or

One year has elapsed following the fulfilment of conditions 8.2 through 8.5.

If you are a cellular licensee, or its affiliate, you may only offer PCS service to the public outside of the 25 CMAs at such time as conditions 8.2 through 8.5 are met.

For the purpose of paragraph 8.3 and 8.4 of this section, non-cellular PCS licensees shall only offer cellular services by means of handsets that are also capable of providing PCS in their chosen PCS standard.

2

Availability of Public-Switched Telephone Network (PSTN) Interconnection

8.2 Interconnection to the wireline PSTN is available for all PCS licensees in the market area.

Cellular Resale

8.3 You, and any entities with whom you have an operating and/or marketing arrangement for the provision of uniformly branded or jointly offered cellular service, offer analogue cellular resale throughout the respective cellular service area on a non-discriminatory basis to all PCS licensees who are not cellular licensees or affiliates of cellular licensees (non-cellular PCS licensees) on terms which are acceptable to at least one such non-cellular PCS licensee or as set out by the regulator.

In the event that both non-cellular PCS licensees accept an offer for cellular resale from only one cellular licensee, condition 8.3 would be deemed to have been met for the other cellular PCS licensees.

Cellular Roaming

8.4 You, and any entities with whom you have an operating and/or marketing arrangement for the provision of uniformly branded or jointly offered cellular service, offer a cellular roaming arrangement for analogue cellular service utilizing the standard you use for inter-system operation, on a non-discriminatory basis to all non-cellular PCS licensees on terms which are acceptable to at least one non-cellular PCS licensee or as set out by the regulator. However, other roaming arrangements for analogue cellular service utilizing the said standard in use for inter-system roaming may be offered to those entities with whom you have an operating and/or marketing arrangement for the provision of uniformly branded or jointly offered cellular service.

In the event that both non-cellular PCS licensees accept an offer for cellular roaming from only one cellular licensee, condition 8.4 would be deemed to have been met for the other cellular PCS licensees.

Relocation of Microwave Links

8.5 Microwave links operating within the band 1850 MHz to 1990 MHz for which you are authorized, are relocated to ensure that sufficient spectrum is available for any other PCS licensee to operate within that same market area.

9.0 PCS Resale

9.1 You must offer PCS resale throughout your service area to PCS licensees on a non-discriminatory basis.

10.0 Interim Sharing Arrangement

10.1 You must comply with the provisions set out in the Interim Sharing Agreement between Industry Canada and the Federal Communications Commission Concerning the Use of the Band 1850 MHz to 1990 MHz.

11.0 Site Specific Authority

11.1 You must obtain site specific authority, normally in the form of a radio licence, prior to installing or operating any 2 GHz PCS base stations.

3 EX-4.8 17 m10142orexv4w8.htm EX-4.8

EXHIBIT 4.8

     AGREEMENT OF LEASE entered into at the City of Montréal, Province of Québec, dated for reference as of August 1, 1998.

BETWEEN:	WPBI PROPERTY MANAGEMENT INC., a company duly incorporated under the laws of Canada, having its registered office at 600 de Maisonneuve O., Suite 2600, Montreal, Quebec H3A 3J2, herein acting on behalf of the owners of the property and represented by Irene Papavasil and Richard Hylands, both duly authorised as they respectively declare,
	hereinafter called the “Lessor”
AND:	MICROCELL TELECOMMUNICATIONS INC., a company duly incorporated under the laws of Canada, having its principal place of business at 1250 René-Lévesque Boulevard West, Suite 400, Montreal, Quebec, H3B 4W8, herein acting and represented by Alain Rhéaume, duly authorised as he so declares,
	hereinafter called the “Lessee”

1     NATURE OF LEASE

1.1     INTRODUCTION

Subject to the terms and conditions set forth in this agreement (hereinafter called the “Lease”), the Lease shall be net to the Lessor. Therefore, the Lessor shall not be responsible during the Term for costs, charges, expenses, taxes or disbursements of any nature whatsoever related to the Premises, their use, occupation, contents or business transacted therein or therefrom, save as otherwise expressly provided herein

2     DESCRIPTION OF PREMISES

2.1     LOCATION AND SQUARE FOOTAGE

The Lessor hereby leases to the Lessee certain space with a Usable Area (as defined in Section 42.28) of 210,492 square feet and a Rentable Area (as defined in Section 42.23) of 242,065.80 square feet, the whole as shown outlined on the plans attached hereto as Schedules “A”, “A-1” and “A-2” (hereinafter referred to as the “Premises”). The Usable Area has been measured and finalised by Lessor’s architect in accordance with BOMA standards for office space measurements and the Rentable Area was arrived at in conformity with the parties agreement by adding thereto 15% of such Usable Area, to account for the Lessee’s use and enjoyment of the Floor Common Areas and the Building Common Areas, and any amount payable on a per square foot basis shall be calculated accordingly. Included in the part of the Premises located on Floor A of the Building is a corridor containing a Usable Area of 2,518 square feet (the “E/W Corridor”)

The Premises comprise separate areas as indicated on the plans attached as Schedules “A”, “A-1” and “A-2” as follows:

q the CNX area, being Area “E” on Schedule “A”, comprising a Usable Area of 66,737 square feet and a Rentable Area of 76,747.55 square feet, (it is understood that said area comprises both the initial CNX area of approximately 43,250 of Usable Area and the Additional CNX Space of approximately 23,487 of Usable Area);

1

q	the Solutions Call Center area (identified in the Offer having preceded this Lease as the “CSR Premises”), being Area “F” on Schedule “A”, comprising a Usable Area of 54,389 square feet and a Rentable Area of 62,547.35 square feet;
q	the Solutions Expansion area, being Area “G” on Schedule “A”, comprising a Usable Area of 32,028 square feet and a Rentable Area of 36,832.20 square feet;
q	the Technical Space, being Area “I” on Schedule “A”, comprising a Usable Area of 8,242 square feet and a Rentable Area of 9,487.30 square feet;
q	the Storage Area, being Area “H” on Schedule “A”, comprising a Usable Area of 1,979 square feet and a Rentable Area of 2,275.85 square feet;
q	the Garage area, being the area shown on Schedule “A-2”, comprising a Usable Area of 1,363 square feet. and a Rentable Area of 1,567; and
q	the 2nd CSR Space, on Floor “B”, being Area “A” on Schedule “A-1”, comprising a Usable Area of approximately 45, 754 square feet and a Rentable Area of 52,617.10 square feet.

3     TERM

3.1     TERM

The term of this Lease (hereinafter called the “Term”) shall commence as of the 1^st day of February 1999 and shall end at 12:00 noon on the 31^st day of January 2010 (hereinafter referred to as the “Expiration Date”) unless sooner terminated under the provisions of this Lease. The foregoing Expiration Date shall apply to all portions of the Premises. However, the following specific commencement dates shall apply notwithstanding the above:

q	June 1, 1999 for the area known as the Solutions Expansion area (i.e. Area “G” on Schedule “A”);
q	June 1, 1999 for the approximately 23,487 square feet of Usable Area portion of the CNX area (known as the Additional CNX Space) marked on the floor plan attached hereto as Schedule “A”;
q	February 1st, 2000 for the 2nd CSR Space on Schedule “A-1” (the aforesaid date is based on the Lessor delivering such area with the demolition, the floor levelling and the window installation completed on or before December 17th, 1999, failing which such commencement date shall be delayed by the same number of days’ delay in Lessor delivering such area).

4     FIXTURING PERIODS

4.1     TECHNICAL SPACE-AREA

The Lessee shall have the right to occupy the portion of the Premises referred to as the Technical Space area I in Schedule “A” as of August 10, 1998 for the purpose of fixturing those premises. It is understood that by August 10, 1998 the Lessor shall have completed the demolition of the area to be occupied by the said Technical Space and the area will have a floor suitable to receive a raised floor for standard computer installations.

4.2     SOLUTIONS CALL CENTER-AREA F

The Lessee shall have the right to occupy the portion of the Premises referred to as the Solutions Call Center-Area F in Schedule “A” and the initial CNX Space (i.e. the portion of the Premises referred to as the CNX-Area E in Schedule “A” less the area known as the Additional CNX marked on Schedule A-2) as of October 2, 1998, for the purpose of planning and fixturing those premises. It is understood that the Lessor and the Lessee shall work together to plan and to complete the base building work outlined in Schedule “C” at the same time that the Lessee completes its leasehold improvements to the Premises. Both parties will work together with the objective of giving final occupancy of the Solutions Call Center and the said CNX areas to the Lessee on November 15, 1998.

2

4.3     SOLUTIONS EXPANSION-AREA G

The Lessee shall have the right to occupy the portion of the Premises referred to as the Solutions Expansion-Area G in Schedule “A” as of May 15, 1999, for the purpose of planning and fixturing those premises. It is understood that the Lessor and the Lessee shall work together to plan and to complete the base building work outlined in Schedule “C” at the same time that the Lessee completes its leasehold improvements to the Premises. Lessee shall assume half the cost of any corridors needed to meet laws, regulations, by-laws, rulings or other specifications required by appropriate governmental authority.

4.4     ADDITIONAL CNX SPACE AREA

The Lessee shall have the right to occupy the portion of the Premises comprising approximately 23,487 of Usable Area. referred to as the Additional CNX Space area in Schedule “A-2” as of April 1, 1999, for the purpose of planning and fixturing those premises. It is understood that the Lessor and the Lessee shall work together to plan and to complete the base building work outlined in Schedule “C” at the same time that the Lessee completes its leasehold improvements to the Premises.

In addition to the foregoing, the Lessor, at its cost, shall deliver the Additional CNX Space to the Lessee in the following condition by June 1, 1999:

q	The floor slab levelled and smooth, ready to receive carpet, the parties hereby acknowledging same had been completed at the time of the execution hereof
q	before June 1st, 1999, Lessor will have installed new white heating units to replace the existing ones along the St-Antoine street side border of the Additional CNX Space
q	The lobby of the freight elevators shall be cleaned, painted and with a new floor finish
q	In addition, the Lessor will provide and install battery operated infrared detectors in all men’s urinals in all washrooms located on Level A.
q	A clear path shall be painted on the floor slab and the path shall be illuminated (in lieu and until such time that a full corridor is built) in such a way that deliveries arriving at the freight elevator can easily find their way to the Additional CNX Space as well as to the corridor running East / West in the middle of the floor
q	A wall will be constructed to separate a shower room from the larger proposed room
q	In addition, the Lessor shall renovate the bathroom located in the corner of St-Antoine & Mansfield on Floor A to a similar standard as the other bathroom on the south-east corner of Floor A.

All costs incurred for these specific items shall be borne completely by the Lessor and shall not be paid for from the base building budget of $13.00 per square foot of Rentable Area or the leasehold improvement budget of $26.85 per square foot of Usable Area nor shall they be included in the Operating Expenses.

4.5     2^ND CSR SPACE

The Lessee shall have the right to occupy the area on Floor “B” known as the 2^nd CSR Space comprising approximately 45,000 square feet of Usable Area referred to on the floor plan attached as Schedule “A-1” hereto on or before October 1^st, 1999, for the purpose of planning and fixturing those premises. It is understood that the Lessor and the Lessee shall work together to plan and to complete the base building work outlined in Schedule “C” at the same time that the Lessee completes its leasehold improvements to the said 2^nd CSR Space. Both parties will work together with the objective of giving final occupancy of the said 2^nd CSR Space to the Lessee on or before February 1^st, 2000. All of the following work to be completed by Lessor no later than December 17 h,at its cost and not to be included as part of base building budget:

3

q	the floor slab levelled and smooth, ready to receive carpet,
q	all windows on the North side of the Building to be installed.

The demolition of all partitions and other structural elements to be done during the same period by the Lessor as part of the base building budget for that space. The parties shall also discuss in good faith the installation of the internal staircase so that the installation thereof shall commence during the same period mentioned above.

4.6     PAYMENTS DURING FIXTURING PERIODS

During said fixturing periods and up to the commencement date for each respective space, the Lessee shall not pay for any Minimum Rent, Operating Expenses or Real Estate Taxes. However the Lessee shall pay for any utilities consumed, including electricity and chilled water within the Premises, and the Lessee shall carry all required insurance.

5     EARLY OCCUPANCY

5.1     DATES OF OCCUPANCY

The Lessee shall take occupancy for purposes of carrying on its business, as of September 7^th, 1998 for the Technical Space and as of November 15, 1998 for the Solutions Call Center-Area F on Schedule A and the original CNX (i.e. Area E on Schedule A less the Additional CNX Space on Schedule A-2), the whole upon the understanding that if the space in question is ready sooner then the Lessee will have access accordingly.

5.2     PAYMENTS DURING FIXTURING PERIODS

During this early occupancy period and until the applicable commencement date, the Lessee shall pay for its consumption of utilities, including electricity and chilled water, and janitorial services and carry all required insurance and abide by all other terms and conditions of the Lease to be signed by both parties, except payment of Minimum Rent, Lessee’s Proportionate Share of Real Estate Taxes and the Operating Expenses Charge.

5.3     OCCUPATION OF PREMISES

During the Term, the Lessee shall not be required to physically occupy the Premises or any part thereof but will respect all other terms and conditions of the Lease.

6     BASE BUILDING PLANS AND BASE BUILDING BUDGET

6.1     PLANS

All architectural, plans related to the work to be performed by the Lessor to the base building and their revision (hereinafter referred to as the “Base Building Plans”) shall be provided by the Lessor at the Lessor’s cost. The mechanical, plumbing, and electrical drawings for the base building work shall be done by the applicable sub-trades and the cost thereof shall thereby form part of the Base Building. All Base Building Plans are subject to Lessee’s and Lessor’s written approval, which approval shall not be delayed or refused for more than five days. For clarification purposes, the major components of the Base Building budget are described in Schedule “C” herewith attached, (such components hereinafter referred to as the “Base Building”). It is agreed that the Tenant shall have no say or approval right of any kind with respect to any work to be done in connection with the exterior of the Building.

6.2     BASE BUILDING COSTS

Lessor’s share of the cost of the Base Building work described in Schedule “C”, shall be up to

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thirteen dollars ($13.00) per square foot of Rentable Area whether leased initially or subsequently via an expansion. Any amount attributable to the Goods and Services Tax or to any other similar tax shall be added to the Base Building budget and paid by the Lessor. Any additional base building costs over and above the Base Building budget shall be borne by the Lessee and shall include a 5% coordination fee to the Lessor for supervision on this additional work. It is agreed that the said excess costs, if any, shall be withheld by Lessor and setoff against amounts payable by it as part of the Leasehold Improvement Allowance contemplated in section 7.

6.3     SPECIFIC REQUIREMENTS

The parties acknowledge that the Base Building is to be constructed and modified to meet the specific requirements of the Lessee and shall be paid for with the Base Building budget.

6.4     COOPERATION

It is acknowledged that due to the specialized nature of the operations and of the tight schedule, the Lessor and the Lessee shall cooperate and consult with each other in respect of the schedule, the budgets and the plans.

6.5     BUDGETS

Before performing any of the construction work involved, Lessee’s contractor shall present to the Lessee budget estimates for the work to be carried out and the Lessee shall approve, or not approve, such costs. The budget for the Base Building work shall not be used to pay for any costs incurred on behalf of the Lessee or on the Lessor’s behalf unless the Lessee has specifically authorized such expenditure with his written signature.

6.6     PERMITS

It is agreed between the Lessee and the Lessor that the cost of the construction permit, the cost of utilities during the construction, the cost of insurance during construction, architects and/or engineering costs (other than plans prepared by sub-trades) as they relate to the Base Building shall be paid by the Landlord and shall not be paid for from the budget for Base Building work or the Improvement Budget.

6.7     COSTS TO BE MINIMIZED

The Lessee and the Lessor shall co-ordinate the construction of the Base Building in such a manner as to minimize the costs and maximize the utilization of the Base Building budget.

6.8     BASE BUILDING BUDGET FOR 2^ND CSR SPACE

It is agreed that the Base Building budget described in Schedule “C” which must be completed for the 2^nd CSR Space is estimated at an amount of approximately TWENTY DOLLARS (20.00$) per square foot of Rentable Area which will need to be set aside for such expenditure in 1999, it being understood that said amount of $20.00 excludes the cost of floor preparation and changes to the exterior of the Building but does include the cost of demolition of interior space and the Lessor’s contribution shall be equivalent to the amount indicated in section 6.2, with the excess being for Lessee’s account.

6.9     REMAINING AMOUNTS

Upon completion of each build-out contemplated by this Lease, any amount set in the Base Building budget which is not spent once the build-out is completed shall, at Lessee’s option, either be a] added to the Leasehold Improvement Allowance described in section 7 or b]deducted

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from the Minimum Rent using a 9% discount factor applied on a per square foot basis to the area for which it applies.

7     TENANT IMPROVEMENT ALLOWANCE

7.1     AMOUNT OF ALLOWANCE

The Lessor shall assume a cash allowance of up to $26.85 (or such allowance amounts as otherwise provided) per square foot of Usable Area of premises (hereinafter referred to as both the “Improvement Budget” and “Leasehold Improvement Allowance”) for the cost of the Lessee’s Leasehold Improvements to be made to the Premises by or for the account of the Lessee. Any amount attributable to the Goods and Services Tax or to any other similar tax shall be added to the Improvement Budget and paid by the Lessor. Any additional Lessee improvement costs over and above the Improvement Budget shall be borne by the Lessee. It is agreed that the Leasehold Improvement Allowance shall be used exclusively for fixed leasehold improvements (including engineering and related soft costs associated therewith) made to the Premises and shall not be utilized to purchase or install non-fixed or moveable improvements, furniture, equipment and fixtures. Payment of the Leasehold Improvement Allowance for each completed phase shall be made subject to setoff against same for any excess costs contemplated in section 6.2 together with any shortfalls contemplated in section 6.9 and shall also be conditional upon the Lessor having received all applicable signed leases from Lessee, proof of payment of all invoices by Lessee, estoppel certificates from all applicable contractors and suppliers, and a legal opinion to the effect that all periods for the valid registration or enforcement of legal hypothecs and related liens or rights against the Building stemming from this transaction have expired.

7.2     PLANS

All electrical, mechanical and plumbing plans related to the Lessee’s improvements are subject to Lessor’s & Lessee’s written approval, which approval shall not be unreasonably refused or delayed for more than five days.

7.3     COOPERATION

It is acknowledged that due to the specialized nature of the operations and of the tight schedule, the Lessor and the Lessee shall cooperate and consult with each other in respect of the Improvement Budget, the plans and the schedule.

7.4     BUDGET ESTIMATE

Before performing any of the construction work involved, Lessee’s contractor shall prepare budget estimates for the work to be carried out and the Lessee shall approve such cost. The Improvement Budget shall not be used to pay for any costs incurred on behalf of the Lessee or on the Lessor’s behalf unless the Lessee has specifically authorized such expenditure with his written signature.

7.5     COSTS TO BE MINIMIZED

The Lessee shall co-ordinate the construction of the Leasehold Improvements in such a manner as to minimize their costs and maximize the utilization of the Improvement Budget. However the Lessee will respect codes and industry norms for quality.

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7.6     REMAINING AMOUNTS

In the event that the entire amount set in the Improvement Budget is not spent once the project is completed, then such amount shall be deducted from the Minimum Rent using a 9% discount factor applied on a per square foot basis to the area for which it applies.

8     RENT

8.1     MINIMUM RENT

The Lessee shall pay to the Lessor during the Term, without demand, notice, setoff, compensation or deduction of any nature whatsoever, at the Lessor’s office or such other place in Canada as may be designated by the Lessor in writing to the Lessee, in lawful money of Canada, an annual minimum rent (hereinafter called the “Minimum Rent”) as follows:

8.1.1     First five year period

For the period commencing February 1, 1999 and terminating January 31, 2005, NINE DOLLARS AND FIFTY CENTS ($9.50) per square foot of Rentable Area per annum, payable in advance in equal, consecutive, monthly installments on the first day of each month;

8.1.2     Second five year period

For the period commencing February 1, 2005 and terminating January 31, 2010, TEN DOLLARS AND FIFTY CENTS ($10.50) per square foot of Rentable Area per annum, payable in advance in equal, consecutive, monthly instalments on the first day of each month.

8.1.3     Per Diem Adjustment

Rent for any partial month shall be adjusted on a per diem basis.

8.1.4     Free Minimum Rent

Notwithstanding the foregoing, Lessee shall not be required to pay Minimum Rent with respect to the Additional CNX Space of approximately 23,487 square feet of Usable Area marked on Schedule A-2 for the period between June 1, 1999 and January 31, 2000.

8.2     ADDITIONAL RENT

8.2.1     Real Estate Taxes

8.2.1.1     Payment of Proportionate Share of Real Estate Taxes

In addition to the Minimum Rent, in each Operating Year, Lessee shall pay Lessor in equal, consecutive, monthly instalments in advance on the first day of each calendar month throughout the Term, its Proportionate Share of Real Estate Taxes on the basis of Lessor’s reasonable estimate. Lessor will furnish the estimate to Lessee prior to the commencement of the period for which it is intended to apply or as soon as reasonably practical thereafter. Such estimate shall take into account the amount payable by Lessee for the immediately preceding Operating Year as well as any applicable assessment in any tax role which is prepared by the taxation authority and which covers periods which includes any Operating Year subsequent to the one for which such estimate is

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made by the Lessor. Should any situation occur within any Operating Year whereby the Lessor reasonably believes that the estimate provided to the Lessee may produce a deficit at the end of such Operating Year, Lessor shall have the right, acting reasonably, at any time during such period and upon notice to Lessee, to revise its estimate (which may be with retroactive effect to the date indicated in Lessor’s notice), in which event Lessee shall within 15 days of such revised estimate pay to Lessor any deficiency, and thereafter, its monthly instalments shall be based on the revised amount(s) specified in Lessor’s notice. Proportionate Share of Real Estate Taxes for any partial month will be calculated on a per diem basis.

8.2.1.2     Estimates

Until Lessor furnishes Lessee with a first revised estimate, the amount provisionally established for Tenant’s Proportionate Share of Real Estate Taxes is sixty-five cents ($0.65) per square foot of Rentable Area per annum. Thereafter, the latest estimate shall apply until replaced by another.

8.2.1.3     Periodic Adjustments

Within a reasonable delay after the end of the period for which such estimated payments have been made, Lessor will furnish Lessee with a statement certified by the Lessor’s auditors showing the actual amount required to be paid for the Proportionate Share of Real Estate Taxes, together with copies of the statements of account or invoices provided by the taxation authority. If Lessee’s provisional payments are less than the actual amount payable, the deficiency will become due on the last to occur of the following events: (i) the date of payment of the instalment of Minimum Rent next following receipt of Lessor’s statement or (ii) seven (7) days following the date of receipt of the statement. If Lessee’s provisional payments exceed the actual amount payable, Lessor will credit such excess against the amounts next due under the Lease.

8.2.1.4     Payment of Accounts Received from Taxation Authority

Notwithstanding anything contained herein to the contrary, as soon as an account for any portion of the estimated amount is received, Lessor may bill Lessee for its Proportionate Share thereof (less all amounts previously paid by Lessee on account thereof) and Lessee shall pay such amount no later than the last to occur of the following events: (i) the date that is seven (7) days following the date of receipt by the Lessee of such account, or (ii) the date that is twenty (20) days prior to the date such taxes are payable by the Lessor to the taxation authority.

8.2.1.5     Revision of Statement

Notwithstanding the foregoing and the receipt by the Lessee of any certified statement by the Lessor’s auditors of Real Estate Taxes for any Operating Year, any such certified statement shall be subject to revision to include in Real Estate Taxes for such Operating Year amounts properly chargeable to Real Estate Taxes for such Operating Year which are discovered anytime after the forwarding of such statement. In all such cases, any demand for additional payment shall be in writing and accompanied by appropriate certified statement(s) and supporting documentation.

8.2.1.6     Additional Documentation

Upon the specific written request of the Lessee, the Lessor shall furnish to the Lessee copies of all pertinent valuation and assessment notices and all pertinent tax bills not already provided by virtue of the above and notices received by the Lessor.

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8.2.1.7     Contested Real Estate Taxes

Real Estate Taxes which are contested by the Lessor shall nevertheless be included for purposes of the computation of the liability of the Lessee for its Proportionate Share of Real Estate Taxes provided, however, that in the event that the Lessee shall have paid its Proportionate Share of Real Estate Taxes and the Lessor shall, as a result of a final decision or judgement on said contestation, receive a refund of any portion of the Real Estate Taxes on which such payment shall have been based, the Lessor shall pay to the Lessee the appropriate portion of such refund after deduction of the expenses of securing and distributing the refund which have not previously been charged to the Lessee. The Lessor shall have no obligation to contest, object to or to litigate any valuation or the levying or imposition of any Real Estate Taxes and may settle, compromise, consent to, waive or otherwise determine in its discretion any valuation or Real Estate Taxes without notice to, consent or approval of the Lessee. Lessor undertakes to exercise its foregoing rights as would a prudent administrator in similar circumstances. The Lessee shall not contest Real Estate Taxes, and for this purpose, the Lessee hereby unequivocally, unconditionally and irrevocably renounces to any right which it may have to so contest. In the event that the Lessee breaches the foregoing provision and proceeds to contest or in any way institutes any form of proceedings or takes any action, legal or otherwise, the purpose of which is to challenge or dispute any valuation or the levying or imposition of any Real Estate Taxes, then the Lessee shall be liable to the Lessor on demand for the full amount of any increase in Real Estate Taxes attributable to the Lessee’s actions, the whole without prejudice to any other remedies which the Lessor may have as a result of such breach.

8.2.1.8     Change in Billing Period(s) for Real Estate Taxes

If the period(s) in respect of which Real Estate Taxes are levied or imposed is (are) changed in the future by the competent authority, the Lessor shall have the right, at its sole discretion, to make the appropriate adjustments with respect to its billings for the Lessee’s Proportionate Share of Real Estate Taxes.

8.2.2     Operating Expenses

8.2.2.1     Payment of Proportionate Share of Operating Expenses

In addition to the Minimum Rent, during each Operating Year, the Lessee shall pay to the Lessor as Additional Rent the Lessee’s Proportionate Share of Operating Expenses. In the cases where the first or last years of the Term do not coincide with an Operating Year, the Lessee’s Proportionate Share of Operating Expenses for such year(s) shall be prorated on a per diem basis.

8.2.2.1.1     Deemed Proportionate Share and CPI Increase

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The Lessor and Lessee have agreed that, unless and until Lessee opts for the Revised Method pursuant to section 8.2.2.1.2 the Lessee shall pay to the Lessor as its deemed Proportionate Share of Operating Expenses for the first Operating Year (1999), without demand, notice, setoff, compensation or deduction of any nature whatsoever, an amount of SEVEN DOLLARS AND FIFTY CENTS ($7.50) per square foot of the Rentable Area of the Premises to be paid in advance in equal, consecutive, monthly instalments (the “Operating Expenses Charge”). The parties agree that the Operating Expenses Charge includes, without limitation, the usual 15% administration fee payable to Lessor, capital tax, large corporation tax and common area electricity and fresh air cooling, heating and ventilation during normal business hours, and other expenses described in section 42.18.

For each subsequent Operating Year the Lessor shall have the right to increase the amount of this Operating Expenses Charge (with retroactive effect to the beginning of the Operating Year for which the calculation is being made) to an amount equal to the product obtained by multiplying the amount of SEVEN DOLLARS AND FIFTY CENTS ($7.50) per square foot of the Rentable Area of the Premises per annum by a fraction the numerator of which is the Current CPI (as hereinafter defined) and the denominator of which is the Base CPI (as hereinafter defined). In each Operating Year the latest amount payable as the Operating Expenses Charge shall continue to apply so long as Lessor has not carried out the adjustment mentioned above. For the purposes hereof “CPI” shall mean Statistics Canada’s Consumer Price Index - All items Regional Cities (Montreal) or failing which, the index most nearly corresponding thereto designated by Lessor. In the latter case, Lessor shall be entitled to make all necessary conversions for comparison purposes acting reasonably. The expression “Base CPI” shall mean the CPI for the month of January 1999 and the expression “Current CPI” shall mean the CPI for the month of January of the Operating Year for which an applicable increase is calculated.

To illustrate such CPI adjustment, assume the Base CPI (i.e. January 1999) to equal 106.2. The first adjustment to be carried out effective January 1^st, 2000, assuming the Current CPI (in this example January 2000) to equal 107.2, would yield the following: $7.50 X 107.7/106.2=$7.61, -the second adjustment to be carried out effective January 1^st, 2001, assuming the Current CPI (in this second example January 2001) to equal 109.4, would yield the following: $7.50 X 109.4/106.2=$7.73; and so on from Operating Year to Operating Year, until such time as Lessee opts for the Revised Method provided for herein below in section 8.2.2.1.2.

8.2.2.1.2     Redevelopment of Building & Revised Method

The Lessee acknowledges that the Lessor will be proceeding with a major redevelopment of the Building over the course of the next few years and that, consequently, among other changes, the ratio of the various types of uses by tenants in the Building may be changed. In so doing, a new method of apportionment and calculation of operating expenses for the Building (the “Revised Method”) shall be adopted by Lessor not before December 31, 2002 and no later than December 31, 2003 and accordingly Lessee may not be entitled to opt for the Revised Method earlier than with effect as of the year beginning January 1, 2004.

When the Revised Method is so adopted, the Lessor shall advise the Lessee in writing of the particulars of such Revised Method and the amount the Lessee would be paying as Operating Expenses under such Revised Method. The amount so indicated shall be presented in the form of audited certificates prepared by an independent accounting firm chosen by Lessor, it being agreed

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however, that if the firm so selected is not one of the ten largest accounting firms in the country, then the selection of such firm shall require Lessee’s prior approval. Said audited certificate shall include a breakdown for each element of Operating Expenses described in the definition of Operating Expenses in section 42.18 of this Lease. The Lessee shall then have the right at its sole discretion to cease paying the Operating Expenses Charge provided for herein above in section 8.2.2.1.1 and to opt for the Revised Method, such option to be exercised by written notice to the Lessor within sixty (60) days of receipt of the Lessor’s notice and audited certificate, with effect as and from the beginning of the Operating Year in which said audited certificate was received. The figure contained in such certificate shall serve as an estimate of the amount to be paid in respect of the Operating Year in which it is received and any adjustments between the amount actually paid by Lessee and the amount which should have been paid according to such certificate shall be made within sixty (60) days of Lessor’s receipt of a notice from Lessee advising that Lessee is opting for the Revised Method.¹ If Lessee does not so advise Lessor that it desires to convert to the Revised Method, Lessee will be presumed to have refused to change to the Revised Method for such year and the same procedure will be repeated the subsequent year and each year thereafter until the Lessee opts for the Revised Method or the initial term of the Lease expires. The intent of the foregoing is that Lessor shall be obliged to provide Lessee with a Revised Method for review each year so that if the actual Operating Expenses are lower than the Operating Expenses Charge payable by the Lessee for such year, then the Lessee shall have the right to benefit from such reduced costs by converting to the Revised Method.

Once the Lessee has opted for the Revised Method, such Revised Method shall, for the purposes of this Lease, remain in effect throughout the remainder of the Term.

8.2.2.1.3     Operating Expenses Procedures under Revised Method

The parties acknowledge that the provisions of this section 8.2.2.1.3 shall not apply unless and until Lessee opts for the Revised Method, in which event the following procedures and delays shall apply:

8.2.2.1.3.1     Estimate of Lessee’s Proportionate Share

On or before the commencement of each Operating Year, the Lessor will estimate the amount of the Lessee’s Proportionate Share of Operating Expenses for such Operating Year and bill the Lessee therefor in equal, consecutive, monthly instalments, in advance, which the Lessee shall pay in advance on the first day of each calendar month of such Operating Year. Such paid monthly instalments shall be applied (without interest) as a credit against the Lessee’s obligations to pay its Proportionate Share of Operating Expenses. From time to time during the course of an Operating Year, the Lessor shall have the right, exercisable by written notice to the Lessee, to modify such estimate and revise such billing to the Lessee accordingly.

8.2.2.1.3.2     Certified Statements of Operating Expenses

Within 90 days following the end of each Operating Year, the Lessor shall furnish the Lessee with a certified statement of the actual amount of Operating Expenses during such Operating Year and the amount of the

¹ For example, in March of Year 7 a certificate is received stating the amount payable in respect of the period ending December 31, Year 6. If Lessee opts for the Revised Method at that point, the figure in the certificate will serve as an estimate of the amount payable during Year 7. An adjustment will be made between that amount and the amount actually paid from January 1, Year 7 up to the point in Year 7 when Lessee opts for the Revised Method. When a certificate is issued in early part of Year 8 certifying the actual figure for Year 7, a further adjustment will be made at that time between the amount paid for Year 7 and the amount which should have been paid according to such certificate.

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Lessee’s Proportionate Share thereof, showing in reasonable detail the information relevant to the calculation and determination thereof. If such amount is greater or less than the payments on account thereof made by the Lessee hereunder, appropriate adjustments shall be made within thirty (30) days after the delivery of such statement.

8.2.2.1.3.3     Revisions to Certified Statements

Notwithstanding the foregoing and the receipt by the Lessee of any certified statement by the Lessor’s auditors of Operating Expenses for any Operating Year, any such certified statement shall be subject to revision to include in Operating Expenses for such Operating Year amounts properly chargeable to Operating Expenses for such Operating Year which are discovered anytime after the forwarding of such statement. In all such cases, any demand for additional payment shall be in writing and accompanied by appropriate certified statement(s) and supporting documentation.

8.2.3     Payment of Rent

Nothing contained in sections 8.2.1 and 8.2.2 shall be construed at any time as reducing Minimum Rent or Additional Rent.

9     USE OF PREMISES

9.1     PERMITTED USE

The Premises shall be used and occupied by the Lessee only as general office space, a computer centre, storage, and/or for the purposes of operating telephone equipment and a call centre. Except as otherwise permitted by this Lease, the Lessee shall not use, permit or suffer the use of the Premises by the Lessee or any assignee, subtenant, licensee, or any other person for any other purpose.

9.2     CONDUCT OF BUSINESS

Subject to section 5.3, the Lessee shall use the Premises throughout the Term in a reputable manner befitting a first class commercial building in downtown Montreal.

9.3     SIGNS, ADVERTISING, IDENTIFICATION, ELECTRONIC BOARDS

Upon occupancy, the Lessor shall place and maintain at its cost, the Lessee’s various corporate designations onto the Building’s directory boards. No other signage or identification of the Lessee shall be permitted outside the Premises except that the Lessee shall have the right throughout the Term to install, at its cost, one exclusive podium with its name and/or logo on the outside of the Building near the lobby on de la Gauchetière street closest to the corner of Mansfield street. The Lessee shall be entitled to have use of a second podium near University and de la Gauchetière which Lessee shall use in common with other tenants of the Building and will share in the maintenance costs thereof, it being understood that Lessee shall not, however, be entitled to identification on STCUM’s podium. Nothing herein shall prohibit Lessor from placing other exclusive or non-exclusive podiums and related identification items in the same area as those identifying Lessee and, in such event the Lessor, acting reasonably, shall be entitled to require the Lessee to modify its identification in the area from time to time by incorporating same into Lessor’s podium(s) and related identification items. Such modification shall be at Lessor’s cost if Lessee has already produced a podium at its expense prior to being notified of the changes required by Lessor, failing which such changes shall be at Lessee’s cost. In making such modifications, Lessor shall use Lessee’s logo (if Lessee requests same) and shall use reasonable efforts to accommodate any reasonable requests made by Lessee in connection with such modifications, it being understood however that the visibility of Lessee’s identification in the area shall be at least similar to that attributed to the STCUM, it being understood that if the STCUM ceases being a tenant of the Building, then Lessee’s identification in the area shall be at least

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similar to that attributed to the STCUM on August 1, 1998. The Lessee shall have the right, subject to all applicable laws, by-laws and regulations governing such matters and provided the electronic boards exist and are used for such purpose, to advertise its products and services on the two outdoor electronic boards of the Building. The Lessee shall use Lessor’s boards without obligation to pay rental therefor but the Lessee shall pay all costs to produce the advertisements, to adapt the advertisements to Lessor’s boards, to program applicable computers, Lessor’s out of pocket expenses and all other related costs. The amount of time that the Lessee will be allowed to use the boards without paying rental will be a function of the area the Lessee occupies in the Place Bonaventure complex, that is the proportionate share of the Lessee shall be calculated by dividing the square footage of Usable Area of the Premises by 1,954,233. The Lessee’s advertisements shall appear in such proportionate share on a repeating basis 24 hours per day, 7 days per week unless the sign is not operated.Should the Lessee wish to utilize the electronic boards more often, it may do so provided they are available and upon payment to the Lessor of a rental fee to be negotiated in good faith for such purpose from time to time. The Lessor intends to identify the retail tenants of the Building on the exterior of the Building as part of a redevelopment of the Building. If the Lessor implements a similar identification program for the office tenants of the Building, then the Lessee shall, along with other office tenants, have the right to identification on the Building as part of the redevelopment plan, the whole subject to approval by municipal authorities of multiple office identifications as part of said redevelopment plan and provided it is agreed that the Lessee’s foregoing rights shall in no way restrict or prohibit Lessor from placing any other form of signage in or on the Building.The location, installation, configuration, size and style of any and all signs or podiums shall be subject to approval by the Lessor’s architect and all applicable governmental authorities.

10     UTILITIES & SERVICES

10.1     HEATING, AIR CONDITIONING

The Lessor shall cause the Premises to be heated, air conditioned and ventilated 24 hrs per day, 7 days per week at the Lessee’s expense. Fresh air shall be provided at no additional cost during “normal business hours” only, “normal business hours” being from 8 am to 6 pm from Monday to Friday, excluding legal holidays. The cost of operating the HVAC systems (including the cost of electrcity necessary for chilled water) during said normal business hours within the Premises shall be borne by the Lessor as part of Operating Expenses and beyond said normal business hours they shall be borne entirely and exclusively as extra charges by Lessee, the whole as described in greater detail in section 10.2.1 and in Schedule “D” hereto. Notwithstanding the foregoing, Lessee recogonizes that until further notice, Lessor is unable to provide the south side of the Premises on a 24 hours per day, 7 days per week basis except that the areas located in the south side which are commonly known as the NCC Room and the War Room shall be supplied on a 24 hours per day, 7 days per week basis from the northern side of the floor.

The Lessor shall also maintain (such maintenance to include, without limitation, the changing of filters at regular intervals), operate and regulate, and the cost thereof shall form part of Operating Expenses, those portions of the heating, ventilating and air conditioning system located within or accessible from the Premises to the extent same is related to normal wear and tear use during the said normal business hours, it being understood however, that anything to be done as a result of wear and tear resulting from Lessee operating beyond said normal business hours shall be done entirely and exclusively as an extra charge at Lessee’s expense.

10.2     ELECTRICITY

10.2.1     The consumption of electricity, chilled water and related utilities and services for the Premises shall be separately monitored by check meters to be installed as part of the Base Building budget described in the Offer to Lease. The cost of any other sub-meters (if required by Lessee) and the installation thereof shall be at the Lessee’s expense.

10.2.2     The Lessee shall pay the Lessor for all such consumption at the same total cost incurred by Lessor to supply such electricity from time to time. The Lessor confirms that it is currently being charged Hydro-Québec’s “L” rate and a description of the application

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of said rate and calculations for the purposes hereof is attached as Schedule “D” hereto. Such consumption shall not include electricity consumed in connection with heating, ventilating, and air-conditioning the Premises during normal business hours as described in section 10.1 hereto.

10.2.3     There will not be any administrative fees whatsoever charged by the Lessor for the consumption of electricity except for a charge of fifteen cents ($0.15) per square foot of Rentable Area per annum. Said amount shall be added to the Operating Expenses and shall be subject to the same increases throughout the Term or those described in the second paragraph of section 8.2.2.1.1 of this Lease.

10.2.4     Lessor shall be entitled, from time to time, to estimate and adjust billings for electricity in accordance with expected and actual consumption patterns and Lessee shall pay same in advance on the first day of each month. Lessor shall make said adjustments at least once every four months and not more than once per month.

10.2.5     When necessary, the Lessor shall, at Lessee’s expense, replace any fluorescent tubes, ballasts, bulbs or fixtures in the Premises.

10.2.6     The obligations of the Lessor hereunder shall be subject to any rules or regulations to the contrary of the authority providing electricity or any other municipal or governmental authority.

10.3     COMMON AREAS

The Lessor shall operate and maintain the Common Areas (defined in Section 42.4).The Lessor, in its sole and absolute discretion, may permit the Common Areas to be used reasonably by such persons as the Lessor may choose, including persons other than tenants of the Building, and the Lessor may reduce, extend or otherwise alter the Common Areas without indemnification or compensation of any nature whatsoever to the Lessee, and without any setoff, compensation or deduction of any nature whatsoever against any amounts payable by the Lessee to the Lessor hereunder except that if any such area is actually rented, then the space in question will not be treated as Common Area for the purpose of determining Lessee’s Proportionate Share of Real Estate Taxes (and Operating Expenses if and when Lessee opts for the Revised Method pursuant to section 8.2.2.1.2 of this Lease).

10.4     ELEVATORS AND LOADING DOCKS

The Lessee shall have the right to use the Building’s passenger and freight elevators and loading docks in common with others. The Lessor shall not be liable for any damage caused to the Lessee, its officers, agents, employees, servants or visitors or the Lessee’s property caused by the operation of said facilities or the use thereof by others.

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10.5     CLEANING

10.5.1     The Lessor shall cause the Premises (excluding the area known as the Technical Space) to be maintained and cleaned daily in accordance with the Building’s standards. The cost of such services is included in the Operating Expenses as defined in this Lease.

10.5.2     The Lessor shall not allow the cleaning and maintenance personnel to enter into the machine room located inside the Technical Space. Should the Lessor obtain a reduction in the cost of cleaning and maintenance for this area, then any savings directly related to this area shall be passed on to the Lessee. If cleaning and maintenance personnel are required on weekends, such services shall be provided at Lessees cost.

10.5.3     Lessor shall cause all bistros located in the Premises to be cleaned on a 7-days per week basis and Lessee shall, in addition to all other amounts payable by Lessee pursuant to his Lease, pay to Lessor the cost of all such cleaning service which is over and above the Building’s standard cleaning service for regular office space.

10.6     REFUSE DISPOSAL

The Lessee shall not leave or place any debris or refuse outside the Premises, except as allowed by the Lessor at specific times of pick-up in areas designated by the Lessor in suitable containers provided and placed for that purpose by the Lessee, at its expense. All ordinary refuse or debris shall be removed by the Lessor. The Lessor reserves the right to charge the Lessee for the cost of removal of extraordinary refuse or debris.

10.7     VENTILATION AND ELECTRICAL CAPACITIES OF PREMISES

10.7.1     The ventilation and electrical capacities of premises in the Building are normally designed to meet the following performance specifications:

(a)	one (1) cubic foot of air per minute per square foot, with no more than seven (7) persons for each 1,000 square feet of Usable Area of the Premises; and
(b)	four (4) watts of electricity per square foot of Usable Area of the Premises.

The aforesaid capacities as well as any and all improvements thereto brought about by the provisions of Schedule “C” shall be termed for the purposes hereof the “Microcell Performance Specifications” (it being understood, however, that the Technical area shall be supplied with 200 cubic foot of air per minute).

10.7.2     The Lessee shall not, without the prior written consent of the Lessor, use the Premises in any manner which will exceed the foregoing Microcell Performance Specifications. Without limiting the generality of the foregoing, nothing contained herein shall be construed as to create any obligation on the Lessor to furnish electricity, heating, air-conditioning or any other services to the Lessee which exceed the foregoing Microcell Performance Specifications due to the use in the Premises of any type or number of equipment not usually found in general office premises. If the Lessee requests additional performance specifications and same are within the capacity of the Building’s existing equipment, and the Lessor consents to provide same, the Lessee shall pay all costs including, without limitation, all design, engineering, electrical and cooling equipment costs which may be incurred in order to respond to Lessee’s additional requirements for ventilation and/or electricity. It is understood that Lessor shall not refuse Lessee’s requests without reasonable motive.

10.8     DISCONTINUATION OR MODIFICATION

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The Lessor shall have the right, without liability or obligation to the Lessee, to discontinue or modify any services required of it under this Lease during such time as may be necessary, or as the Lessor may deem advisable by reason of accident, or for the purpose of effecting repairs, replacements, alterations or improvements, the whole provided reasonable advanced notice of same is given to Lessee except where prior notification is unfeasible due to reasons beyond Lessor’s normal control. Without limiting the foregoing, the Lessor shall not be liable to the Lessee for failure for any reason to supply said services or any of them, the Lessor however undertaking to correct any such failure with reasonable diligence. If non-urgent but necessary repairs need to be done to the Building and that such work requires the Lessee to be temporarily dispossessed of part of the Premises, the Lessor and Lessee shall fully co-operate and negotiate together, acting in good faith, to minimize to the extent possible, the impact and inconveniences of the repairs for the Lessee.

10.9     LOCKS

The Lessee shall provide the Lessor with keys for every door lock in the Premises (with the exception only, for security reasons, of the area known as the Technical Area, which the Lessee considers to be an area restricted to authorised personnel only) and no additional locks may be placed by the Lessee upon the doors of the Premises without the prior written consent of the Lessor, which consent may not be unreasonably withheld. No lock may be altered without the prior consent of the Lessor, which consent may be conditional on Lessee furnishing to Lessor keys to any such altered lock. At the termination of this Lease, the Lessee shall immediately surrender to the Lessor all keys to all (including those of the aforementioned Technical Area) in the Lessee’s possession, and all such locks shall remain the property of the Lessor.

10.10     FORCED ENTRY

If the Lessor is unable to access the Premises using keys provided for that purpose by the Lessee, then the Lessor shall have the right to enter the Premises by force and break any glass on the exterior of the Premises in order to gain such entry in the event of a situation which, in the opinion of the Lessor, may result in death or injury to persons or loss or damage to the Premises, the Building or the property of the Lessor. Such forcible entry shall be undertaken only if the representatives of the Lessee are not able to be contacted and give access to the Premises to the Lessor’s representatives in a sufficiently short delay as may be considered necessary under the circumstances by the representatives of the Lessor. The Lessor shall repair any damage to the Premises caused by such forcible entry and charge the cost thereof to Operating Expenses, unless such forcible entry is necessitated by the act or fault of the Lessee, in which event all such damage shall be repaired by the Lessor at the Lessee’s expense.

11     SPECIAL PROVISIONS

11.1     FINISHING OF PREMISES

Subject to the completion of all construction and build-out requirements contemplated in this Lease and to the adjustment of any seasonal defects which may be experienced with the first cycles of seasonal changes during the first year of occupancy of each area of the Premises, the Lessee declares that it has examined the delivered areas of the Premises and has found same to be in good condition and in a good state of repair in all respects, and the Lessee accepts the Premises in such condition and state.

12     PAYMENT OF MONIES

12.1     PAYMENT

All monies owing by the Lessee hereunder shall be payable when due without notice or demand and shall be paid to the Lessor or its nominees at the head office of the Lessor or at such place in Canada as shall be designated from time to time by the Lessor in writing to the Lessee.

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12.2     CURRENCY

All monies payable hereunder by the Lessee to the Lessor shall be payable during the Term in legal currency of Canada.

12.3     INTEREST ON ARREARS

The Lessee shall pay interest compounded monthly on all Minimum Rent or Additional Rent under the terms of this Lease and not paid when due, calculated from the due date to the date of payment, at a rate per annum of two percentage points (two hundred basis points) in excess of the prime rate of Bank of Nova Scotia. For greater certainty, such prime rate means the prime lending rate of interest, expressed as a rate per annum, which Bank of Nova Scotia establishes as a reference rate of interest in order to determine the interest rate that it will charge on any particular day for loans in Canada in Canadian dollars to its commercial borrowers. This provision for interest shall not affect any other remedy which the Lessor may have in respect of any failure by the Lessee to pay any amount owing hereunder when due.

12.4     LESSOR’S LEGAL FEES

The Lessee shall also pay any reasonable legal fees which the Lessor incurs in collecting from the Lessee any overdue sums of money prior to the institution of legal proceedings, which pre-litigation fees are hereby stipulated and agreed to be not less than two hundred and fifty dollars ($250.00).

12.5     WAIVER OF RIGHT TO SET OFF

Should the Lessee wish to assert any right of any nature whatsoever against the Lessor, whether or not in connection with this Lease, it shall pursue the matter independently of the performance of its obligations under the Lease. Accordingly, the parties agree that under no circumstance will the Lessee have any right to set off, compensate or deduct any amount against the Minimum Rent or Additional Rent unless the Lessor is held liable to pay an amount to Lessee pursuant to a judgement or arbitration ruling which is final and without appeal.

12.6     TERMINATION OF LEASE

Upon any termination of this Lease and up to the termination of this Lease, the Lessee shall, in addition to all other amounts which it is obliged to pay hereunder, pay to the Lessor such amount as is estimated by the Lessor to represent that portion of the aggregate amount of the Lessee’s Proportionate Share of Real Estate Taxes and of Operating Expenses payable and to become payable by the Lessee hereunder, and which have not yet been paid pursuant to the terms of the Lease.

13     BUSINESS, WATER AND IMPROVEMENTS TAXES

13.1     LESSEE’S RESPONSIBILITY

The Lessee shall pay all business taxes, water taxes and similar rates and taxes which may be levied or imposed on the Premises or the business carried on therein, and all other rates and taxes which are or may be payable by the Lessee as lessee and occupant thereof or which may be levied or unpaid on the Lessee’s fixtures, equipment and machinery or any alterations or improvements to the Premises made by the Lessee.

13.2     REIMBURSEMENT OF LESSOR

If by law, regulation or otherwise, any of the foregoing taxes or rates are made payable by the Lessor or proprietors, or if the mode of collecting same is altered as to make the Lessor liable therefor instead of the Lessee, the Lessee shall pay to the Lessor prior to the due date, but in any event within seven (7) days after demand upon the Lessee, the amount which the Lessor is required to so pay, and the Lessee shall hold the Lessor harmless and indemnified against any reasonable cost or expense in respect thereof.

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14     INSURANCE

14.1     INCREASE IN LESSOR’S INSURANCE

The Lessee shall not do or permit to be done in or about the Premises, or bring into or keep upon the Premises, anything which will in any way affect the fire risk or increase the rate of fire or other insurance on the Building. Should the rate of any type of insurance on the Building be increased by reason of any violation of this Lease by the Lessee, the Lessor, in addition to all other remedies, may pay the amount of such increase and the amount so paid shall become payable by the Lessee as Additional Rent on demand. Should any insurance policy on the Building be cancelled by the insurer by reason of the use and/or occupation of the Premises or any part thereof by the Lessee or by anyone permitted by the Lessee to occupy or be upon the Premises, same shall constitute a default under, and be sanctionable in accordance with the provisions of section 17. In addition, the Lessor may, at its option, and at the expense of the Lessee, enter upon the Premises and remedy the cause of such insurance cancellation.

14.2     FIRE FIGHTING EQUIPMENT

The Lessee shall, at its expense, install and maintain in the Premises such fire extinguishers and other fire fighting equipment, including without limitation, emergency lighting, as is deemed reasonably necessary or desirable by the Lessor or any authority or insurance body. If so required by the Lessor or any such authority or body, the Lessee shall appoint a warden to co-ordinate with the fire protection facilities and personnel of the Lessor.

14.3     REQUIRED COVERAGE

The Lessee shall, at its expense, take out and maintain in force and in favour of each of the Lessor and the Lessee as named insureds during the Term:

14.3.1     general public liability insurance against claims for bodily injury, death or property damage arising out of the Lessee’s operations hereunder. The limits of said liability insurance, which may be increased from time to time to amounts determined by the Lessor acting reasonably, shall not be less than five million dollars ($5,000,000) combined single limits for death, bodily injuries and property damage arising from any one occurrence;

14.3.2     all-risks insurance including the perils of fire, extended coverage in respect of furniture, equipment, mechanical or electrical systems, inventory, stock in trade, fixtures and leasehold improvements located in the Premises and in respect of such other property located in or forming a part of the Premises, as the Lessor may reasonably require from time to time, in amounts not less than the full replacement cost in each case, such insurance policy to contain a provision that any right of subrogation which the insurer might otherwise have against the Lessor, its officers, agents or employees, is waived;

14.3.3     plate glass insurance for the plate glass of the Premises. The Lessee shall, at its expense, repair or replace all glass and plate glass of the Premises in the event of damage thereto, unless such damage is caused by the Lessor, its employees or agents, in which event such glass or plate glass shall be repaired or replaced by the Lessor; and

14.3.4     any additional insurance as the Lessor, acting reasonably, may require from time to time.

14.4     FAILURE TO INSURE

The insurance required hereunder shall be placed with insurers and upon terms and conditions satisfactory to the Lessor. Certificates of the required insurance shall be furnished to the Lessor by the Lessee promptly upon issuance of such insurance policies. In the event that the Lessee

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fails to so insure or fails to furnish to the Lessor certificates of insurance as herein required, the Lessor may, without prejudice to its other remedies, place such insurance for a period not exceeding one (1) year, and any premium therefor paid by the Lessor shall be recoverable from the Lessee as Additional Rent on demand.

15     ALTERATIONS, REPAIRS, IMPROVEMENTS

15.1     CARE OF PREMISES

15.1.1     Notwithstanding the provisions of the Civil Code of Quebec or any other legislation concerning maintenance or repairs, the Lessee shall, at its expense throughout the Term, maintain, repair, replace and generally keep in good repair, order and condition the Premises, as would a prudent and diligent owner, including all improvements, furniture, fixtures, equipment, glass and plate glass located in the Premises, but excluding, however, any structural portion and other major systems and components of the Building which may be located in the Premises. The Lessee shall give the Lessor prompt written notice of any damage whatsoever to the Premises or Building. Should the Lessee fail to so maintain and repair the Premises, the Lessor, after giving written notice of not less than ten (10) days to the Lessee (it being understood that in the event of an emergency, the delay for any notice which may be required shall be dictated by the circumstances at hand), shall have the right, without prejudice to its other remedies, to effect such maintenance or repair, and all costs so incurred by the Lessor shall be payable by the Lessee as Additional Rent on demand. At the termination of this Lease, the Lessee shall deliver the Premises to the Lessor in as good order and condition as at the commencement of this Lease, broom clean and trash free.

15.1.2     The Lessee shall be solely responsible for and shall pay the cost of all repairs of every nature and kind whatsoever to the Premises other than repairs and rebuilding thereof which constitute structural repairs to the Building or its other major systems and components.

15.1.3     So long as Lessor maintains the required personnel and services in the Building, Lessee may, provided it agrees to pay the then applicable charges for same, utilise any such available services in common with other tenants of the Building in order to fulfill its obligations to repair and otherwise maintain its Premises.

15.2     IMPROVEMENTS, REPAIRS, ALTERATIONS, INSTALLATIONS BY THE LESSEE

15.2.1     The Lessee shall not make any improvements, repairs, alterations or installations to the Premises or any other part of the Building, without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. Except for components of the plumbing, piping, electrical, mechanical, heating, ventilation and air conditioning systems and similar base-building items which shall become the property of Lessor upon installation, all improvements, repairs, alterations and installations to the Premises (save any trade fixtures) which in any manner are attached in, to, or under the floors, walls or ceilings, including, without limitation, lighting installations such as, without restriction, spotlights and tracks, floor finishes and carpets of whatever nature placed upon the floor of the Premises, doors, shall become the property of the Lessor at the expiry of the Lease without compensation therefor, and shall be surrendered to the Lessor upon the termination of this Lease. All such improvements, repairs, alterations and installations shall be done at the Lessee’s expense by such contractor(s) as the Lessee may select and the Lessor approve, such approval not to be unreasonably withheld. The Lessor shall also have the right to have any such work supervised by its architects, contractors and workmen, in which case the Lessee shall pay to the Lessor, as Additional Rent on demand, an amount equal to the greater of:

(i)	the cost of such supervision and co-ordination, as determined by the Lessor, acting reasonably; and
(ii)	five percent (5%) of all construction costs.

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No such costs or fees shall be payable in connection with all work carried out in the building and installation of the initial improvements to any portion of the Premises.

15.2.2     In the event that any contractor is not fully unionized, or is causing, or in the Lessor’s reasonable opinion is likely to cause, labour trouble in the Building, the Lessor shall have the right to require that such contractor cease or refrain from doing any work in the Premises, and upon receipt of written notice from the Lessor, the Lessee shall prevent such contractor from entering the Building. The Lessor shall also have the right to require that any contractor carry property damage and public liability insurance in the amount of not less than five million dollars ($5,000,000.00) in respect of its activities in the Building.

15.2.3     The Lessee shall use the base-building blinds or similar window coverings installed by the Lessor at all times so as to prevent exterior views of unsightly items or areas located within the Premises such as boxes, storage areas, and related items or areas. The Lessee shall also use said blinds or coverings during hot or sunny periods so as to prevent solar heat build-up within the Premises which may result in undue strain on the air-conditioning system of the Premises and/or the Building.

15.2.4     Upon termination of the Term or of any renewal thereof or upon any prior termination, the Lessee shall not have the right nor the obligation to remove any or all of the improvements constructed or installed upon the Premises.

15.2.5     Notwithstanding the above, it is understood and agreed, however, that anything installed or constructed in the Premises by or on behalf of Lessee for its own specific requirements and which is of a type not usually found in office premises (such as but not limited to vaults, staircases, atriums and raised floors), the removal of which requires work over and above the usual demolition work required for premises not so equipped, shall be removed by Lessee, if Lessor so requests, and any damage occasioned by the installation or removal of any and all such items be made good, the whole at Lessee’s sole cost and expense. Without limiting the foregoing, it is understood and agreed that the Lessor may, as a condition of any consent sought by virtue of 15.2.1 above, demand that anything of the type specified in the preceding sentence to be installed or constructed in the Premises during the Term be, upon termination of the Term or of any renewal thereof or upon any prior termination, removed by the Lessee and that all damage to the Premises occasioned by the installation or removal of any and all such items be made good, the whole at Lessee’s sole cost and expense.

15.2.6     Any moveable property left for a period of more than five (5) days in the Premises by the Lessee at the end of the Term or in the case of a prior termination, shall be presumed to have been abandoned by the Lessee and the Lessor shall be entitled to dispose of same at its sole discretion without any compensation being payable therefor.

15.3     LEGAL HYPOTHECS

The Lessee shall promptly pay or cause to be paid all charges incurred by it or on its behalf for any work, materials or services which may give rise to a legal hypothec against any portion of the Building or Land and shall obtain from each architect, engineer, supplier of materials, contractor and subcontractor, prior to commencement of their respective work, a full and unconditional renunciation of its rights of legal hypothec, in form and substance satisfactory to the Lessor. Should said renunciations not be furnished to the Lessor prior to commencement of work, or should any such legal hypothec be registered, the Lessee shall deposit with the Lessor (without interest) an amount equal to one hundred and twenty-five percent (125%) of the claims secured thereby within ten (10) days after registration thereof, failing which, the Lessor, without in any way limiting its other rights and recourses, may order the immediate cessation of any work in the Premises, and/or cancel the present Lease, and/or obtain the radiation of such hypothec and be reimbursed by the Lessee on demand, as Additional Rent, an amount equal to the full cost of such radiation.

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15.4     ALTERATIONS TO BUILDING AND LAND BY LESSOR

The Lessor shall have the right, at any time and from time to time, to install and maintain in the Premises whatever is necessary or useful for the equipment, use or convenience of the Building or its tenants, to renovate, modify, convert, alter or redevelop or otherwise vary the layout, composition, nature or use of the Building or Land or any part thereof, including the Premises, which work may include the replacement, addition or deletion of windows or exterior or interior walls in the Building, including the Premises, and the expansion or reduction of the various categories of space in the Complex contemplated in Section 42.21. If any such work is carried out in the Premises, the Lessor shall have the right, together with its agents and representatives, to access the Premises to the extent required for the performance of such work provided same affects the Premises in a minor fashion and in such event, the Lessor shall work with the Lessee so as to minimise the impact of any such changes on the Premises.

Notwithstanding the foregoing, Lessor warrants that the Premises may be used as general office space and that it shall use reasonable efforts to provide Lessee with prior notice of expected noise disruptions, it being understood that Lessor shall also use reasonable efforts to control such disruptions during the current re-development of the Building.

16     ASSIGNMENT AND SUBLETTING

16.1     CONSENT REQUIRED

Lessee shall have the right, at any time and from time to time during the Term, to assign its rights by virtue of this Lease as they apply to the whole of, or to any part of, all of the areas, any one or any combination of the areas enumerated in section 2.1 or to sublet the whole of, or any part of, all of the areas, any one or any combination of the areas enumerated in section 2.1 to a different company or to different companies within the Microcell group of related companies without the Lessor’s further consent, provided Lessee always remains responsible for all the tenant’s obligations under the Lease, no guarantee or covenant in Lessor’s favour is negatively affected by any such assignment or sublet and that Lessor is not, directly or indirectly, in any way, manner or form in a worse off position than before any such assignment or sublet takes place.

Except as provided for in the preceding paragraph, the Lessee shall not, on pain of nullity, effect any Transfer (as such term is hereinafter defined in section 16.6) without the prior written consent of the Lessor, which consent shall not be unreasonably withheld. The consent of the Lessor to any such Transfer shall not constitute a consent to any further Transfer and the all other terms and conditions of this section 16 shall apply to all Transfers, subject at all times, however, to Lessee’s rights provided for in the first paragraph of this section 16.1.

16.2     LESSEE TO FURNISH INFORMATION

At least thirty (30) days prior to the date any Transfer is to become effective, the Lessee shall provide the Lessor with:

16.2.1     copy of the written documentation evidencing the proposed Transfer;

16.2.2     the name and legal composition of the proposed Transferee(as defined in section 16.6); and

16.2.3     the usual credit information reasonably required in the circumstances to assess the business and financial responsibility and standing of the proposed Transferee.

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The effective date of the giving of the aforementioned notice by the Lessee requesting such consent to the Transfer shall not occur until such time as the Lessee has provided the Lessor in writing with all information required under this section 16.2.

16.3     LESSOR’S RIGHTS

16.3.1     The Lessor shall within 15 days of receipt of the Lessee’s written request for consent and of all of the information required under section 16.2, notify the Lessee in writing that:

16.3.1.1     it grants its consent to the proposed Transfer; or

16.3.1.2     it refuses to grant its consent to the proposed Transfer; or

16.3.1.3     it elects to terminate this Lease, without penalty to Lessee, in preference to granting or refusing its consent to the proposed Transfer, and without having to justify its election, in which event the termination shall be effective on the date stated in the Lessor’s notice of termination, which date shall be the last day of a month and not less than thirty (30) days, nor more than one hundred twenty (120) days, following the delivery of such notice. Notwithstanding the foregoing, the Lessee shall be entitled to withdraw its request for Lessor’s consent within three days of Lessor’s notification to Lessee that it elects to terminate the Lease and, in such event, the request shall be deemed to never have been made; or

16.3.2 Should the Lessor consent to the Transfer, the consent shall, in addition to any other conditions stipulated by the Lessor, be subject to the following:

16.3.2.1     the Lessee shall remain solidarily liable (within the meaning of Article 1523 and following of the Civil Code of Quebec) with the Transferee for the fulfilment of all obligations of the Lessee under this Lease and any renewal thereof (notwithstanding the provisions of Articles 1873 and 1881 of the Civil Code of Quebec, which provisions are hereby unconditionally, unequivocally and irrevocably waived by the Lessee), the whole without novation or delegation of any kind, and without benefit of subrogation;

16.3.2.2     the documents effecting the Transfer shall be prepared by the Lessor’s attorney, and all costs of processing the application for consent, which cost is presently estimated at two hundred and fifty dollars ($250.00), including any credit reports, preparation and/or negotiation of any documentation, shall be paid for by the Lessee at the time of execution of the Transfer;

16.3.2.3     all amounts owing by the Lessee hereunder and due as at the effective date of the Transfer shall be paid in full on or prior to such date. Where any such amounts cannot be fully determined at that time, the Lessee shall deposit with the Lessor an amount reasonably estimated by the Lessor to cover such estimated amounts, to be held by the Lessor, without any liability for interest thereon, until the estimated amounts become fully determined by the Lessor, at which time the appropriate adjustments will be made;

16.3.2.4     the Lessee shall have a period of thirty (30) days in which to complete the Transfer in accordance with the terms and conditions stipulated by the Lessor. In the event that the Lessee does not effect such Transfer within said thirty (30) day period, the Lessor’s consent to such Transfer shall be deemed null and void and the Lessee shall not be permitted to effect a further Transfer without again conforming to all of the provisions hereof.

16.4     Lessor’s Conditions

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	16.4.1   If the Lessor consents to any such Transfer, the Lessor may require that any and all rent paid by the Transferee, including but not limited to any rent in excess of the rental to be paid under this Lease, shall be paid directly to the Lessor at the time and place specified in this Lease.
	16.4.2   Under no circumstance will: (i) the mere occupation of all or part of the Premises by any proposed Transferee or third party or the Lessor’s tolerance thereof, (ii) the payment of rent or other amounts by any proposed Transferee to the Lessor, or (iii) the consent to any previous Transfer, constitute a waiver of any obligation of the Lessee to obtain prior formal written consent to any Transfer, nor will any of the foregoing be construed as constituting a consent to the proposed Transfer.
	16.4.3   Nevertheless, whether or not the Lessor consents to any Transfer, it may collect rent or other amounts from any Transferee or proposed Transferee and apply the net amount collected to Minimum Rent and Additional Rent, without in any manner prejudicing any of its rights under this Lease.
16.5	REFUSAL OF CONSENT BY LESSOR

Without limiting the grounds upon which consent to a Transfer may be refused, any of the following shall be deemed reasonable grounds which the Lessor may invoke to refuse consent:

	16.5.1   the proposed Transferee is then a lessee of the Building;
	16.5.2   there is a history of defaults under commercial leases by the proposed Transferee or by companies or partnerships in which the proposed Transferee was a principal shareholder or partner, as the case may be, at the time of the defaults;
	16.5.3   the Lessor has reasonable grounds to believe that the proposed Transferee does not intend to bona fide physically occupy and carry on business from the Premises, or the effective date of the proposed Transfer will predate the date upon which the Lessee commences to physically and bona fide occupy and carry on business from the Premises;
	16.5.4   the Lessor will be in default under the provisions of any other lease, offer to lease, deed of hypothec or other instrument of financing or any other agreement with a third party in connection with the Building if it consents to the Transfer.
16.6	DEFINITION OF TRANSFER AND TRANSFEREE
	16.6.1   For the purposes of this section the following definitions shall apply:

	16.6.1.1   “Transfer”: any assignment of the Lease or any subletting of any part of the Premises howsoever termed or qualified, or, if Lessee is a joint-stock company (other than any company whose voting securities are publicly traded on any recognised stock exchange in Canada or the United States), any change in its effective voting control from that existing on the date Lessee first incurred any obligation to Lessor for the leasing of the Premises, or, if Lessee is a partnership, any change in its composition from that existing on the date Lessee first incurred any obligation to Lessor for the leasing of the Premises.
	16.6.1.2   “Transferee” any person to whom a Transfer is made.
16.7	ADVERTISING

The Lessee shall not print, publish, post, mail, display, broadcast or otherwise advertise or offer the whole or any part of the Premises for any purpose and shall not permit any broker or other party to do any of the foregoing, unless the complete text and format thereof is previously approved in writing by the Lessor.

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17	DEFAULT OF LESSEE AND REMEDIES OF LESSOR
17.1	EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute a default under this Lease:

	17.1.1   if the Lessee fails to pay any installment of Minimum Rent or Additional Rent when due and such failure continues for more than three business (3) days after Lessee receives a written request to remedy such failure;
	17.1.2   if the Lessee becomes insolvent or commits an act of bankruptcy within the meaning of the Bankruptcy and Insolvency Act (Canada) or makes a general assignment for the benefit of its creditors, or if the Lessee is declared bankrupt, or if a petition for a receiving order or bankruptcy petition is filed against the Lessee, or if the Lessee files an assignment in bankruptcy, a notice of intention or a proposal under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), or takes or attempts to take advantage of any legislation for the relief of bankrupt or insolvent debtors, or if any execution is levied against the Lessee, or if any encumbrancer of the Lessee’s interest shall take any action to enforce its security, unless such execution or enforcement proceeding be set aside, discharged or abandoned within seven (7) days;
	17.1.3   if any order shall be made for the dissolution, liquidation or winding-up of the Lessee or other termination of the corporate existence of the Lessee;
	17.1.4   if a receiver, trustee, or any official having similar power is appointed with respect to the Lessee or any portion of its business affairs or property; or if the estate of the Lessee is transferred, passes to, or devolves upon any other person by operation of law;
	17.1.5   if the Lessee fails to perform any other material obligation under this Lease and such failure continues for ten (10) business days after written notice thereof from the Lessor to the Lessee specifying such failure.
17.2	REMEDIES OF THE LESSOR
	17.2.1   In the event of any default by the Lessee under section 17.1, the Lessor shall have, unless the Lessee has cured its default, the right to terminate this Lease by written notice to the Lessee, whereupon this Lease shall terminate at noon on the tenth (10th) day following the date such notice is given, without the necessity of any other “mise en demeure” or legal process whatsoever. The Lessee shall thereupon quit and surrender the Premises to the Lessor, or if not yet in possession, the Lessee shall no longer have any right to possession of the Premises. The Lessor shall have the right to enter the Premises and dispossess the Lessee and remove any persons or property therefrom and/or may bolt the Premises or change the locks thereon, any legislation to the contrary notwithstanding, without the necessity of any legal proceeding whatsoever and without being liable to the Lessee therefor in damages, or otherwise. As of the tenth day after the date the Lessor notifies the Lessee that it has terminated this Lease, the Lessor shall ipso facto and automatically have the absolute right to treat as abandoned and to discard, destroy, sell or otherwise dispose of all property then remaining within the Premises, including all stock in trade, furniture, and any other effects of any nature whatsoever, the whole without compensation to the Lessee or any other party having any claim or interest in the property which Lessee fails to remove from the Premises within the delay provided for herein above.
	17.2.2   In the event of such termination, Minimum Rent and Additional Rent for the then current month and for the lesser of twelve months or each subsequent month thereafter through to the expiry date of this Lease or any valid renewal hereof, shall, ipso facto, as of and from the occurrence of said default, become due and payable to the Lessor, the whole without notice, demand or delay and without prejudice to the Lessor’s right to claim from the Lessee all other costs, expenses and damages suffered or to be suffered by

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	the Lessor as a result of the Lessee’s default or the premature termination of this Lease.
	17.2.3   In the case of termination where the Lessee is bankrupt or insolvent, the Lessor shall, in addition to all its other rights, remedies and recourses, be entitled to the equivalent of three (3) months’ Minimum Rent and Additional Rent as accelerated rent.
17.3	LESSOR’S CUMULATIVE RIGHTS

Neither the stipulation nor the exercise by the Lessor of any right it may have hereunder or in law shall preclude the exercise by the Lessor of any other right it may have hereunder or in law. Without limiting the generality of the foregoing, the rights of termination stipulated in favour of the Lessor under this section 17 and elsewhere in this Lease shall not prevent the Lessor from exercising its rights to claim any penalty stipulated hereunder and/or to petition for a provisional, interlocutory or permanent injunction or specific performance, and/or to claim for damages.

17.4 CROSS-DEFAULTS

Lessee acknowledges that it has or will, directly or indirectly through other entities of the Microcell group of companies, enter into other leases and guarantees in connection with the tenant’s obligations under such leases with Lessor, the whole for other premises in the Building known generally as follows:

q	Switch room comprising approximately 7,376 square feet of Usable Area on Floor “A” together with certain spaces on the loading dock and roadway levels
q	All other spaces which may be eventually occupied as a result of expansion, option, first refusal, or similar rights affecting the parties

Lessee hereby accepts and agrees that any default under any of the aforesaid leases or guarantees shall also constitute a default under the present lease and the other leases and guarantees and that any default under the present Lease shall also constitute a default under the other said leases and guarantees, it being understood that the Lessor, in any such case, may exercise any right or recourse under any of the aforesaid leases and guarantees against any party or parties independently or in any combination it may choose.

18	DAMAGES
18.1	ACTS OF LESSEE

The Lessee shall be responsible for all damages or injury suffered by the Lessor, its officers, employees, servants, agents, or co-tenants and for all damages to the Building or Premises, caused by the act or neglect of the Lessee, its officers, employees, servants or any other person for whom the Lessee is legally responsible. Any such damage may be repaired by the Lessor at the Lessee’s expense immediately in the event of an emergency or, in non-emergency situations, if such damage remains unrepaired five (5) business days after Lessor requests Lessee to repair same.

18.2	LIMITATION OF LESSOR’S LIABILITY
	18.2.1   The Lessor shall not, under any circumstances except in the case of its own negligence, be liable in respect of any loss, injury or damage suffered by the Lessee or any other person as a result of any of the following occurrences:

18.2.1.1   loss or damage to property of the Lessee by theft, accident or any other cause;

18.2.1.2   injury or damage to persons or property resulting from fire, explosion, falling plaster, escaping steam or gas, electricity, water (including sewer back-up), rain, snow or leaks from any part of the Premises or the

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Building, or from any pipes, appliances or plumbing work therein, or from dampness;

18.2.1.3   provided that the Lessor has taken all reasonable steps within its control to alleviate same, any damage to the property of the Lessee or any reduction in the Lessee’s enjoyment of the Premises caused by the acts or activity of any third person including any other tenant in the Building, or by any person in the Premises, or by the construction of any private or public work; or

18.2.1.4   loss or damage arising out of any delay in the finishing of the Premises, or the interruption or modification of any service or facility to be provided by the Lessor under the terms of this Lease, caused or required by maintenance, repairs, strikes, riots, labour controversies, accidents, fuel shortages, acts of God or the Queen’s enemies, fire or other casualty, force majeure, cas fortuit or other cause beyond the Lessor’s reasonable care and control. The Lessor undertakes, however, to take all reasonable steps to remove the cause of such interruption with due diligence.

19	DAMAGE AND DESTRUCTION
19.1	TOTAL DESTRUCTION
	19.1.1   If the Premises are totally destroyed or rendered substantially or wholly untenantable by fire or other cause and the Lessor shall decide not to rebuild or restore the Premises, or if the Building is so damaged that the Lessor shall decide not to rebuild or restore same (whether or not the Premises are damaged), the Lessor shall have the right within ninety (90) days after such fire or other cause of destruction, to cancel this Lease by written notice to the Lessee. If the Lessee is not then in default or otherwise liable towards the Lessor hereunder, the Lessee’s liability for Minimum Rent and Additional Rent shall cease as of the day following the casualty.
	19.1.2   If the Lessor elects to restore or rebuild the Premises, the Lessor shall so notify the Lessee within ninety (90) days after such fire or other cause of destruction.
	19.1.3   If the Lessor notifies the Lessee that a period longer than one hundred and eighty (180) days from the date of the casualty is required to effect such restoration or rebuilding of the Premises, then either the Lessor, or the Lessee if it is not then in default hereunder, shall have the right to cancel this Lease as of the date of damage or destruction, by means of a written notice to that effect to the other party within fifteen (15) days of receipt by the Lessee of said notice by the Lessor of the estimated period of restoration or rebuilding.
	19.1.4   The Lessor’s notice of cancellation of this Lease may, however, be included in the Lessor’s notification to the Lessee that it has estimated that a period longer than one hundred and eighty (180) days from the date of the casualty will be required to effect such restoration or rebuilding.
	19.1.5   If the Lessor notifies the Lessee that it estimates that the period required to effect restoration or rebuilding of the Premises will be longer than one hundred and eighty (180) days from the date of the casualty and that it does not intend to proceed therewith, it shall be deemed to have given to the Lessee notice of cancellation of this Lease.
	19.1.6   If neither the Lessor nor the Lessee exercises its right to cancel the Lease as aforesaid, the Lease shall, subject to section 19.2 below, remain in full force and effect, and the Lessor shall proceed diligently with the necessary restoration or rebuilding.
	19.1.7   In the event of the cancellation of this Lease pursuant to any of the provisions of this section 19.1, the Term shall expire and the Lessee shall immediately vacate the Premises and deliver same to the Lessor upon such cancellation, and the Lessee shall pay all Minimum Rent and Additional Rent up to the date of fire or other cause of

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	destruction. In the event of restoration or rebuilding pursuant to any of the provisions of this Section 19.1, those provisions of Article 1865 of the Civil Code of Quebec which would require Lessor to obtain court approval prior to doing any such work are hereby waived by the Lessee and shall not apply to this Lease.
19.2	RECONSTRUCTION OR REPAIR AND LIABILITY

In the event of such restoration or rebuilding, Minimum Rent and Additional Rent shall abate in proportion to the part of the Premises which have been rendered untenantable during the period commencing on the day following the fire or other cause of destruction and ending on the day the Lessor delivers the Premises to the Lessee for the Lessee’s finishing and fixturing work.

20	EXPROPRIATION
20.1	EXPROPRIATION

The Lessor and the Lessee shall co-operate with each other in respect of any expropriation of all or any part of the Premises or the Building, so that each may receive the maximum award to which it is entitled by law. If the whole or any part of the Premises, or the whole of the Building, or so much thereof as shall, in the opinion of the Lessor, render it commercially undesirable to continue operation of the Building, is expropriated, condemned or taken by any competent authority for any purpose whatsoever, the Lessor shall have the right at its discretion to terminate this Lease upon notice in writing to the Lessee of not less than thirty (30) days, it being understood that if Lessor is able to give a longer notice as a result of the length of notice Lessor receives from the applicable government authority, then it will do so. The Lessee shall have no claim in damages or otherwise against the Lessor relating to or arising out of such expropriation, condemnation or taking, or arising out of such cancellation of this Lease, nor shall the Lessor be obliged to contest any expropriation proceedings.

21	TERMINATION OF LEASE
21.1	EFFECTIVE DATE OF TERMINATION

Notwithstanding any present or future legislation to the contrary, including without limitation Article 1879 of the Civil Code of Quebec, should the Lessee remain in occupation of the Premises after the expiration of the present Lease without having executed a new written Lease with the Lessor, such holding over shall not constitute a renewal of this Lease. In such event the Lessee shall, unless Lessor expressly authorises anything else to the contrary in writing, be deemed to be occupying the Premises as a tenant from month to month, at a monthly rental payable in advance on the first day of each month equal to one-twelfth (1/12) of the aggregate of two (2) times the Minimum Rent (at the rate in force during the final month of the preceding term), plus Additional Rent, the whole without prejudice to all other rights and recourses of the Lessor as a result of the Lessee’s failure to vacate the Premises. In addition to the foregoing, the Lessor shall be entitled at the expiration of the Lease to enter into and recover possession of the Premises by any means whatsoever.

21.2 ABANDONMENT OF PROPERTY

Subject to the provisions of sections 15.2 and 17.2, the Lessee shall remove all of its property from the Premises at the expiration or earlier termination of this Lease. Any property belonging to the Lessee or any other person which is left in the Premises after the termination date shall be deemed to have been abandoned without compensation unless other arrangements have been agreed to in writing by the parties hereto. In such event, the Lessor shall have the right, after ten (10) days written notice to Lessee to that effect, to declare itself owner of such property and to dispose of same in whatever manner it considers appropriate. The Lessee shall not have any right to any compensation, nor shall the Lessee be entitled to make any claim against the Lessor as a result of such disposition, the whole without prejudice to the Lessor’s right to claim from the Lessee all expenses, losses and damages caused by the Lessee’s failure to remove such property as required herein.

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22	ACCESS TO PREMISES
22.1	TO EXAMINE OR EXHIBIT PREMISES
	22.1.1   The Lessor may, at any time and without any liability to the Lessee, provided prior notice of a duration which is reasonable in the circumstances is given to Lessee, enter the Premises to effect alterations or repairs or for any purpose which the Lessor considers necessary for the operation or maintenance of the Building or its equipment or to examine same or have its contractors examine same for any of the aforesaid purposes.
	22.1.2   During the last twelve (12) months of the Term, the Lessee shall, upon at least twenty-four hours’ prior notice, allow the Premises to be exhibited by the Lessor and its agents to persons interested in leasing same. The foregoing shall prevail over the provisions of Article 1885 of the Civil Code of Quebec.
22.2	TO INSTALL EQUIPMENT

The Lessee shall permit the Lessor to install and maintain in the Premises whatever is necessary or useful for the equipment, use or convenience of the Building or its tenants, provided the Lessee’s enjoyment of the Premises is not unduly interfered with. The Lessee shall have no claim against the Lessor therefor.

23	COMPLIANCE WITH LAWS AND INDEMNIFICATION
23.1	COMPLIANCE

The Lessee shall, at its expense, throughout the Term, promptly comply with all laws, regulations, by-laws, ordinances and requirements of any authority having jurisdiction over the Premises or the business conducted therein, including without limitation the requirements of the fire, police and health departments.

23.2 INDEMNIFICATION OF LESSOR

Unless same results from the fault or negligence of the Lessor, the Lessee shall indemnify and hold the Lessor fully harmless and indemnified against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgements, reasonable costs and expenses (including reasonable attorneys’ fees and court costs) arising directly or indirectly, in whole or in part, out of a breach by the Lessee of its obligations under section 9.1, 23.1 or of any of its other obligations under this Lease, or out of any accident or occurrence on or about the Premises causing injury or death to any person, or damage to property.

23.3 LESSEE’S OPERATING PERMITS

If any equipment, installation or apparatus to be used or installed by the Lessee in the Premises requires a permit from any governmental authority, the Lessee shall secure the required permit before installation and file a copy of such permit with the Lessor. In addition, notwithstanding the provisions of Article 1854 of the Civil Code of Quebec, the Lessee shall be responsible, at its expense, for obtaining any occupancy, business or similar permits which it may require in order to use the Premises for the purposes provided for in this Lease and any failure by the Lessee to obtain any of such permits shall not entitle the Lessee to cancel this Lease or obtain a reduction of Minimum Rent or Additional Rent.

24	ALIENATION BY THE LESSOR
24.1	THE LESSOR’S RIGHT TO ASSIGN

Without in any way limiting the right of the Lessor to assign this Lease, the Lessor or the owner(s) of the Building shall have the right to assign or hypothecate this Lease in favour of a

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lending institution as security for any obligation. In the event of any such assignment or hypothecation and notification thereof to the Lessee, this Lease shall not be cancelled or its financial conditions modified for any reason whatsoever, without the written consent of the creditor, except as provided for, anticipated, or permitted by the terms of this Lease or by law. The Lessee shall, if and whenever reasonably required by the Lessor, at the Lessor’s expense subordinate this Lease to such hypothec or assignment.

24.2 SALE OR TRANSFER OF BUILDING

In the event of any sale or transfer of the Building, or the making of any lease thereof, or the sale, transfer or assignment of any such lease, and provided that the transferee, acquirer or lessee assumes all of the obligations of the Lessor under this Lease arising from and after the effective date of such sale, transfer, lease or assignment, then without further agreement between the parties, or between the parties and the transferee, acquirer or lessee, the Lessor shall be released from all of the obligations so assumed, and the Lessee shall thereafter be bound to such transferee, acquirer or lessee, as the case may be, with the same effect as though the latter had been the Lessor under this Lease.

25	PRIOR OCCUPANCY
25.1	PRIOR OCCUPANCY

Should the Lessee occupy or gain access to the Premises prior to the commencement date of the Term, all terms and conditions of this Lease, including the free rental periods contemplated in this Lease, shall have effect and apply to such occupation or access.

26	UNAVOIDABLE DELAY
26.1	NON-RESPONSIBILITY OF LESSOR OR LESSEE

Notwithstanding anything in this Lease to the contrary, if any party is bona fide delayed or hindered in or prevented from performing any obligation hereunder by reason of Unavoidable Delay (as defined hereinafter) then performance of such obligation is excused for the period of the delay and the delay to perform such obligation shall be extended by the same period. However, the foregoing shall not operate to excuse Lessee from promptly remitting any payment required by this Lease. For the purposes hereof “Unavoidable Delay” shall mean the following: any delay occasioned by cas fortuit, force majeure, strike, lockout, labour trouble, inability to procure materials, restrictive government rules, regulations or orders, bankruptcy of contractors or any other condition whether of the foregoing nature or not (other than the financial condition of either party) which is beyond the reasonable control of the party invoking it.

27	RELOCATION
27.1	RELOCATION OF LESSEE

After the execution of this agreement and during the Term, the Lessor shall not have the right to relocate the Premises in whole or in part within the Building. Notwithstanding the foregoing, it is agreed that Lessor shall in no way be prohibited from reclaiming or relocating portions of the Premises when making modifications to the Building which may affect the Premises in a minor fashion and that in such event, Lessor shall work with Lessee so as to minimize the impact of any such changes on the Premises.

28	NOTICES
28.1	NOTICES

Any notice or demand contemplated by or pertaining to this Lease shall be in writing and shall be

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given by either party hereto to the other by registered or certified mail, telecopier, bailiff, private messenger service or hand delivered to the address of the party to whom notice is being given or when left upon the Premises. Any notice sent by registered or certified mail shall be deemed to have been received three (3) business days following the date of mailing (provided that at such time no postal strike is in progress or has been announced). Any party may change its address for notice by advising the other party in writing of such change in the manner provided in this section 28.1.

28.2 ADDRESSES FOR PURPOSES OF NOTICE

The Lessor:	825 St. Antoine West, Level 2 Post Office Box 1000, Place Bonaventure, Montreal, Quebec H5A 1G1 Attention: General Counsel
The Lessee:	The Premises with copy to the attention of the Chief Financial Officer and Vice-President, Legal Affairs which are located at the address indicated on the first page of this Lease.

28.3 ADDRESS FOR SERVICE

For purposes of service of all notices, writs and/or other legal documents in any suit at law, action or proceeding which the Lessor may take to enforce its rights under this Lease, the Lessee elects domicile at the Premises or, if the Lessee no longer occupies the Premises, then at its head office at 1000 de la Gauchetiere W., 25^th Floor, Montreal, Quebec.

29	INTERPRETATION
29.1	REPRESENTATIONS, WARRANTIES, PRIOR AGREEMENTS, OFFER TO LEASE

This Lease constitutes the entire agreement between the Lessor and the Lessee, and supersedes all prior agreements (including offers to lease), representations and warranties, verbal or written, in respect of the Premises. This Lease may only be modified by agreement in writing duly signed by the Lessor and the Lessee.

29.2 EXCLUSIVITY

The Lessor shall not be precluded from leasing any other space in the Building to any other person carrying on the same or similar business to that of the Lessee.

29.3 BROKERAGE COMMISSION

Except for the commission payable pursuant to any agreement between the Lessor and the Lessee’s authorised broker, the Lessee shall pay, to the entire exoneration of the Lessor, any commission or other form of consideration which may be owing to any agent or broker in connection with this Lease or any offer to lease which may have preceded this Lease. The Lessee shall indemnify and hold the Lessor fully harmless and indemnified against any and all other claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgements, costs and expenses (including reasonable attorneys’ fees and court costs) arising directly or indirectly, in whole or in part, out of any claim for any such commission or other consideration.

29.4 GOVERNING LAW

This Lease shall be governed and interpreted in accordance with the laws of the Province of Quebec and the laws of Canada applicable therein. Should any clause or part of a clause be illegal or unenforceable under the laws of Quebec, it shall be considered severable, and the remainder of the Lease shall remain in full force and effect, to the extent permitted by Article 1438 of the Civil Code of Quebec.

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29.5 SUCCESSORS AND ASSIGNS

Subject to the provisions of section 16, the obligations of the Lessee hereunder shall be binding upon the permitted successors and assigns of the Lessee.

29.6 INTERPRETATION, CAPTIONS

29.6.1   This Lease shall be read with such changes in number and gender as are appropriate, according to whether the Lessee is an individual male or female, or a partnership, corporation or association. If there is more than one person comprising the Lessee, each such person shall be solidarily liable (within the meaning of Articles 1523 and following of the Civil Code of Quebec) for the performance of all of the obligations of the Lessee hereunder, and unequivocally, unconditionally and irrevocably waives the benefits of subrogation.

29.6.2   All captions and headings appearing in this Lease have been inserted for ease of reference only and in no way define, limit or enlarge the scope or meaning of any provision of this Lease.

29.7 WAIVER

Failure of the Lessor to insist upon the performance of any covenant or condition of this Lease or to exercise any right or option contained in this Lease shall not be construed as a waiver or relinquishment of any such covenant, condition, right or option. No such waiver or relinquishment shall be valid unless in writing and signed by duly authorised persons on behalf of the Lessor. The acceptance of Minimum Rent or Additional Rent from or the performance of any obligation by a person other than the Lessee, shall not be construed as an admission by the Lessor of any right, title or interest of such person as sub-lessee, assignee, transferee or otherwise in the place of the Lessee.

29.8 DEROGATION FROM LAW

In each instance where a provision of this Lease derogates from the Civil Code of Quebec or any other statute, regulation or by-law, such derogation shall operate notwithstanding the absence of any express reference herein to such statute, regulation or by-law.

30 RULES AND REGULATIONS

30.1 ACTS OF NUISANCE

30.1.1   The Lessee shall not perform any act or carry on any practice which may cause damage to the Premises or Building, or which may cause damage or constitute a nuisance to other tenants, occupants or users of the Building. The Lessee shall discontinue any such act or practice forthwith upon receipt of written notice from the Lessor.

30.1.2   The Lessee shall not do, or permit anything to be done on or about the Premises, the Building or the Land which will injure or obstruct the rights of the Lessor or of tenants or other occupants of the Building or of owners or occupants of adjacent or contiguous property, or do anything which is a nuisance. Lessee shall not do or permit to be done on or about the Premises, the Building or the Land or maintain anything therein or thereon which will in any way conflict with the laws, regulations, by-laws, ordinances or requirements or any authority having jurisdiction over the Premises, the Building or the Land or the business conducted therein or thereon including, without limitation, the requirements of the fire, police and health departments.

30.1.3   Without restricting the generality of the foregoing, the Lessee shall, upon receipt of written notice from the Lessor, eliminate the source or cause of any noise or vibration emanating from the Premises which in the Lessor’s reasonable opinion is objectionable.

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	No loud-speakers, televisions, phonographs, radios or other similar devices shall be used in such a manner as to be heard outside the Premises.
30.2	SIGNS, ADVERTISING

Subject to section 9.3, the Lessee shall not, without the prior written consent of the Lessor, display, inscribe or print any sign, notice, advertisement or lettering in or on any part of the Building, outside the Premises, upon the exterior of the doors of the Premises, or within the Premises when such sign, notice, advertisement or lettering is visible from outside the Premises. The Lessor shall have the right to require the Lessee to remove any such sign, notice, advertisement or lettering which, in the Lessor’s reasonable opinion is objectionable, and the Lessee shall effect such removal within twenty-four (24) hours of receipt of written notice from the Lessor. If the Lessee fails to comply with the Lessor’s written request, the Lessor shall have the right, without prejudice to any other rights and recourses which the Lessor may have in respect of such failure, to remove, at the Lessee’s expense, any such sign, notice, advertisement or lettering, and the Lessee shall not have any claim whatsoever against the Lessor as a result of such action by the Lessor. The Lessor shall also have the right to prohibit any advertising by the Lessee, which, in the Lessor’s opinion, tends to impair the reputation of the Building or any tenant of the Building, and upon receipt of written notice from the Lessor, the Lessee shall immediately refrain from or discontinue any such advertising.

30.3 DIRECTORIES LISTINGS

Subject to Section 9.3, the number and style of all listings of the Lessee on all directories in the Building shall be at the discretion of the Lessor. Any change in said number and style of a listing(s) of the Lessee which are requested by the Lessee shall be subject to the approval of the Lessor (which approval shall not be unreasonably withheld) and shall be at the Lessee’s expense.

30.4 REMOVAL OF FURNITURE, FIXTURES

The Lessee shall not move out of the Premises any of the furniture placed or the equipment installed therein without having given Lessor at least 24 hours notice of such move. Lessee shall abide by all reasonable directives given by Lessor in relation with the manner in which any such move is to be carried out. Without limiting the generality of the foregoing, any moving of furniture or equipment shall be carried out through the truck dock and only by way of the doors, corridors and elevators and during such times as are designated from time to time by Lessor.

30.5 INSTALLATION OF FLOOR COVERING

Other than any floor coverings which are approved by Lessor and installed as part of the original build-out of the Premises, the Lessee shall not lay any floor covering which comes in direct contact with the floor of the Premises. If the Lessee wishes to use linoleum or any other floor covering, an interlining of builder’s deadening felt shall be first affixed to the floor of the Premises by a paste or other material soluble in water. The use of cement or other similar adhesive material is prohibited. All carpeting shall be installed only by means of water soluble adhesive or tackless strip method.

30.6 RECEIVING OF SUPPLIES

All loading and unloading of merchandise, supplies, materials, furniture and equipment shall only be made through or by means of such doorways, passageways and elevators as the Lessor may designate from time to time. It is understood, however, that Lessee shall have access to such designated facilities 24 hours per day, 7 days per week, for purposes of shipping and receiving said items.

30.7 PASSAGES, ELEVATORS

The passageways, elevators, lobbies and stairways of the Building shall not, unless approved by Lessor, be obstructed or used by the Lessee, its employees, agents, visitors or licensees for any purpose other than the ingress to or egress from the Premises or Building.

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30.8     COOKING ON PREMISES PROHIBITED

Except for the use of microwave ovens and coffee machines which present no risk of fire, and further provided no unpleasant cooking odours result from such use, the Lessee shall not cook or prepare food on the Premises, including in the “Bistro” areas.

30.9     HEAVY OBJECTS

Safes and other unusually heavy objects shall be placed by the Lessee only in such places as may be approved by the Lessor. Any damage caused by overloading the floor shall be repaired at the Lessee’s expense.

30.10     CANVASSING, SOLICITING

All canvassing, soliciting and peddling in the Building is strictly prohibited, and the Lessee shall co-operate with the Lessor to prevent same.

30.11     ANIMALS

No animals may be brought into the Building without the prior written consent of the Lessor.

30.12     FURTHER RULES AND REGULATIONS

The Lessee shall observe such further reasonable rules and regulations as the Lessor may from time to time adopt for the operation, good order, reputation, safety, care or cleanliness of the Building or Premises. Such rules and regulations shall not, however, be inconsistent with the terms of this Lease nor unduly interfere with the Lessee’s enjoyment of the Premises.

30.13     WAIVER, MODIFICATION

The Lessor shall have the right to waive or vary selected rules or regulations in respect of any one or more tenants of the Building, and the Lessor shall not be responsible to the Lessee for the non observance or violation of any of said rules and regulations by any other tenant. The Lessee hereby unequivocally and unconditionally waives all of its rights against the Lessor under Article 1861 of the Civil Code of Quebec, so that Lessor shall not be liable for the actions of other lessees in the Building, provided Lessor has taken reasonable measures within its control in an attempt to assist Lessee in the circumstances. The provisions of the rules and regulations shall not be deemed to limit any covenant or provision of this Lease to be performed or fulfilled by the Lessee.

30.14     PUBLICATION OF LEASE

The Lessee shall not publish its rights under this Lease otherwise than by memorial and then only after receiving the prior written approval of the contents thereof by the Lessor.

31     OFFER TO LEASE

The parties hereto declare that the rights under any Offer to Lease or any amendment thereto which preceded this Lease have been validly assigned to them respectively and that they shall hold the other party harmless from and against damages of any nature whatsoever arising from any claim or legal proceedings, howsoever termed or qualified, which may be made or instituted by the respective assigning party or parties whose name(s) appears on any such Offer to Lease or any amendment thereto and take up the defence of the other party in the event such applicable declaration is alleged or declared to be untrue.

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32     ANTENNAS

32.1     LICENSE AGREEMENT

Microcell Connexions Inc. shall, so long as it is an affiliate corporation of Lessee, have the right, throughout the Term and any renewal periods, to install all equipment, radio-antennas and cables, (hereinafter collectively called the “Equipment”) necessary to operate its PCS services and the internal network of Microcell Connexions Inc. in the Premises and common areas of the Building. Such right shall be without cost to the Lessee pursuant to the terms and conditions stipulated under an agreement to be entered into by the parties in accordance with the provisions of this section 32 (hereinafter called the “License Agreement”), the whole except for direct costs incurred by the Lessor in supervising, advising, and coordinating the installations and any special taxes applicable, if such is the case, and the actual cost of electricity consumed by such equipment, which cost shall be estimated and invoiced in the same fashion as indicated in section 10.2 of this Lease. Notwithstanding anything in said License Agreement or herein to the contrary, nothing in said License Agreement or in this Lease or the other leases to be entered into by the parties hereto shall entitle Lessee to place any antenna or related equipment by any manner or in any place not previously approved by Lessor in writing, which consent shall not be unreasonably withheld. Without limitation, same shall not be installed in any place so as to render the equipment visible from either any restaurant, room or other portion of the Bonaventure Hotel premises or from any location on the streets and sidewalks of any area near the Building. All such installations shall respect the architectural integrity of the Building and shall not interfere with any other tenant, occupant or user of any portion of the Building and they must not interfere with or obstruct the operation of any other antenna, dish, or similar operation in the complex. All such installations made to the Premises or in any part of the Building outside the Premises for the benefit of the Lessee’s antennas, fibre optic connections, and related installations, shall, at the option of Lessor, be removed by the Lessee at its cost at the expiry of the lease or any renewal period.

32.2     RIGHTS AT EXPIRY OF TERM

The Lessor hereby agrees that at the expiration of the Term or any renewal periods, Microcell Connexions Inc. shall have the right to extend the Term of the License Agreement under the same terms and conditions for a term equal to the lesser of a] five (5) years or b] the duration of Lessee’s occupancy of the Premises prior to the said expiration of the Term for whatever reason. However at such expiration, Microcell Connexions Inc. shall begin to pay to the Lessor a fee based on comparable fees paid by Microcell Connexions Inc. or its competitors for the installation of similar equipment in other buildings at that time in the Montreal region.

32.3     USE OF RISERS

The Lessor hereby authorizes Microcell Connexions Inc. to use the risers available in the Building in order to connect its Equipment. It is agreed that Lessor shall at all times retain absolute control of said risers and the manner of use thereof by Lessee shall be at Lessor’s complete discretion. Lessee agrees to pay Lessor all reasonable expenses Lessor incurs to supervise, aid, or which otherwise result from Lessee’s use of said risers, it being understood that use of said risers shall be rent-free.

32.4     APPROVAL OF PLANS & SPECIFICATIONS

All plans and specifications shall be prepared by Microcell Connexions Inc. and sent to the Lessor for its approval, which approval shall not be unreasonably withheld.

32.5     NON EXCLUSIVE RIGHT

The License Agreement shall reflect and give effect to the Lessor’s concern that this right is not exclusive, and that the Lessor and the Lessee shall work together to identify the best locations for the Equipment. The Lessee also understands the Building will undergo major renovations in the next years and this may force the Lessee to re-locate some or all of its Equipment from time to time at its cost. Said relocations shall be done upon thirty (30) days prior written notice. If more than two relocations are required by Lessor within a given twelve (12) month period, the third

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and all subsequent relocations during such twelve month period shall be at Lessor’s cost. The parties confirm that all such installations shall respect the architectural integrity of the Building and shall not interfere with any other tenant, occupant or user of any portion of the Building and they must not interfere with or obstruct the operation of any other antenna, dish, or similar device or operation in the Complex.

32.6     UTILITIES FOR EQUIPMENT

The Lessee shall be responsible for any and all utilities and other costs related to the operations of its Equipment.

33     VIDEOTRON FIBRE OPTIC SERVICE

33.1     COMPLIANCE WITH RULES

The corporate group commonly known as “Videotron” shall, provided it respects Lessor’s rules and regulations relating to the Building as same may be established by Lessor from time to time, have the right to install and connect its fibre optic network into the Building for the sole purpose of servicing the requirements of the Lessee in the Premises. Lessor’s prior written approval (which approval shall not be unreasonably withheld) of Videotron’s installations shall be obtained prior to the performance of any work in that regard by Videotron or Lessee and Videotron shall reimburse all reasonable costs incurred by Lessor to study, evaluate, and supervise all such work or installations. Except for the granting of approval in accordance with the foregoing, nothing herein shall be interpreted so as to impose any obligation, liability or responsibility whatsoever on Lessor with respect to such installations or for the operation and delivery of fibre optic or related services contemplated by this article and to be provided by Videotron or any other such supplier.

33.2     APPROVAL OF PLANS

Prior to the commencement of any such work, all plans and specifications shall be prepared by Videotron and sent to the Lessor for its approval, which approval shall not be unreasonably withheld.

33.3     OTHER USERS OF COMPLEX

In the event that Videotron requests to service other users in the Building, then Videotron and the Lessor shall negotiate an agreement based on normal terms and conditions for this type of service, it being understood however that neither Videotron nor Lessor shall be under any obligation to conclude any arrangement which is not for the sole purpose of serving Lessee or which is intended to service other users of the Building besides Lessee.

34     INTERIOR PARKING

34.1     NUMBER OF SPACES

As of September 1, 1998 and throughout the Term and any extension thereof, the Lessor shall provide the Lessee, at its request, with up to twenty (20) unreserved interior parking spaces at prevailing rates as same may be established from time to time. In addition to the foregoing and to the space contemplated in section 34.2, the Lessor shall provide the Lessee, at its request, with one (1) reserved parking space and up to one (1) unreserved interior parking space for every 4000 square feet of Rentable Area of the Additional CNX Space marked on Schedule A which is occupied, the whole at prevailing rates as same may be established from time to time.

34.2     FENCED SPACE

As of the commencement date and throughout the lease Term and any extension thereof, the Lessor shall provide the Lessee, at its request, with one reserved interior parking space at prevailing rates as same may be established from time to time. The Lessor hereby agrees that the Lessee may, at its cost, build a fence around said reserved parking space. Upon cancellation of

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said reserved space, the Lessee shall remove said fence and completely restore the area to its original state entirely at its cost.

34.3     CANCELLATION PROCEDURE

From time to time throughout the Term, the Lessee will give the Lessor at least a thirty (30) day prior written notice of any changes in connection with its parking space additions or cancellations.

35     STORAGE SPACE AND BISTROS

35.1     RENTAL RATE

The Lessee shall have a right to lease, in “as is condition”, up to four (4) separate storage areas of up to one thousand (1000) square feet of Usable Area each at a cost of ten dollars ($10.00) per square foot of Rentable Area per annum, all included. The exact locations of same in the Building shall be determined by the Lessor and the Lessee acting reasonably within thirty (30) days of Lessor’s reception of a written notice from the Lessee requesting such space.

35.2     CANCELLATION PROCEDURE

Thereafter, should the Lessee not need all or part of said storage areas, then it will inform the Lessor in writing and the lease for such storage space(s) will be cancelled within 30 days of such notice to the Lessor, it being agreed that Lessee will, at the time of such cancellation, reimburse Lessor the unamortized cost incurred by Lessor, if any, to build or create the said storage space. In all cases, said cost shall be disclosed by Lessor to Lessee at the time such space is originally leased in accordance with section 35.1 hereof. Notwithstanding the foregoing, Lessee shall not be entitled to cancel the lease for any such storage area if the space in question would not comply with applicable building codes, laws, and regulations.

35.3     APPROVAL OF PLANS

All plans for the entrances to the bistros to be created by Lessee at various places on Floor “A” which shall be accessible from a common area of the Building (as opposed to from within the Premises) shall require the prior written approval of Lessor, which approval may not be unreasonably withheld.

36     LEASE AMENDMENTS FOR EXPANSIONS AND REDUCTIONS

If and when the Lessee exercises any of the cancellation or expansion rights described in sections 37, 38, 39 and 41, the Lessor shall prepare, at its cost and expense, an applicable amendment to this Lease and the area in question shall accordingly be added or deleted from the Premises.

37     OPTION TO EXPAND CSR ON FLOOR “A”

37.1     OPTION TO EXPAND

The Lessee shall have the option to expand the area of the Premises known as Area “G” (Solutions Expansion), at anytime between April 1st, 1999 and December 31st 1999, by the area of 3,720 square feet of Usable Area (hereinafter known as the “Third CSR-A Space”). The Third CSR-A Space shall be located on Floor “A” of the Building in the area identified as Area “B” on Schedule “A” attached hereto. In order to exercise its right to expand, the Lessee shall provide the Lessor with at least four (4) months prior written notice stipulating the area required and the proposed occupancy date. The Third CSR-A Space shall be subject to the same rates, terms and conditions as contained in this Lease, including a Leasehold Improvement Allowance of twenty-six dollars and eighty-five cents ($26.85) per square foot of Usable Area.

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37.2     CONFIGURATION OF THIRD CSR-A SPACE

This right may be exercised only once and shall be configured approximately as indicated on the floor plan attached as Schedule “A” hereto.

37.3     THIRD CSR-A SPACE IMPROVEMENTS

The Third CSR-A Space shall be delivered to the Lessee with the improvements outlined in Schedule “C” herewith attached, the whole at the Lessor’s cost in accordance with the $13.00 per square foot of Rentable Area budget for base building work described in the said schedule and the $26.85 per square foot of Usable Area leasehold improvement allowance described in the said schedule. In the event that the base building work cost exceeds $13.00 per square foot of Rentable Area, the excess shall be deducted from the leasehold improvement allowance; in the event such base building work is less, the provisions of 6.9 shall apply.

38     OPTION TO EXPAND CSR ON FLOOR “B”

38.1     OPTION TO EXPAND (THIRD CSR-FLOOR “B”)

The Lessee shall have the option to expand the area of the Premises known as the 2nd CSR Space at anytime between April 1st, 1999 and February 28, 2000 by an area of up to 13,500 square feet of Usable Area (hereinafter known as the “Third CSR-B Space”). The Third CSR-B Space shall be located on Floor “B” of the Building in the areas identified as being Area “B”, Area “C” and Area “E” on Schedule “A-1” attached hereto. In order to exercise its right to expand, the Lessee shall provide the Lessor with at least two (2) months prior written notice to be received by Lessor at its offices by no later than 4 p.m. on February 28, 2000, with said notice clearly stipulating the area required and the proposed occupancy date, it being agreed however that the commencement of the term for this area shall in no event be later than May 1, 2000. The Third CSR-B Space shall be subject the expansion modalities in the second paragraph and the fourth to the eighth paragraphs of section 39.1 and the first indented paragraph of section 39.2 and shall also be subject to the same rates, terms and conditions as contained in this Lease, including a leasehold improvement allowance of twenty-six dollars and eighty-five cents ($26.85) per square foot of Usable Area which will be prorated based on the remaining length of the Term.

38.2     CONFIGURATION OF THIRD CSR-B SPACE

This right may be exercised once, the whole to be configured in a manner having the same ratio of windowed to non-windowed space as the balance of the space occupied by the Lessee on the floor in question. It is agreed that the precise area shall be designated by Lessor and Lessee taking into account Lessee’s preferences and space availability and that if Lessee exercises all its expansion rights it will have all of the area shown on the said plan. However, if said area is not available at the time such right is exercised by Lessee due to the exercise of this option prior to the time the existing tenant must return the area in question, Lessor will have discretion in allocating the exact area, it being agreed that Lessee will nevertheless be allocated vertically or horizontally contiguous space.

38.3     THIRD CSR-B IMPROVEMENTS

The Third CSR-B Space shall be delivered to the Lessee with the improvements outlined in Schedule “C” herewith attached, the whole at the Lessor’s cost in accordance with the $13.00 per square foot of Rentable Area budget for base building work described in the said schedule and the pro rated $26.85 per square foot of Usable Area leasehold improvement allowance described in the said schedule. In the event that the base building work cost exceeds $13.00 per square foot of Rentable Area, the excess shall be deducted from the leasehold improvement allowance; in the event such base building work is less, the provisions of 6.9 shall apply.

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39     OPTION TO EXPAND CNX ON FLOOR “A”

39.1     OPTION TO EXPAND

The Lessee shall have the option to expand at any time between June 1st, 1999 and February 28, 2000. The expansion shall take place into the area marked for that purpose on Schedule “A” and shall be up to approximately 17,989 square feet of Usable Area, with the Rentable Area thereof being determined by calculating the Usable Area in accordance with BOMA standards for office space measurements and adding thereto 15% for common areas (hereinafter referred to as the “CNX Expansion Space”). The Usable Area shall be calculated by the Lessor’s architect before the commencement date.

The right to expand shall be exercised by increments of at least four thousand (4000) square feet of Usable Area each, beginning with the areas closest to the CNX area at the corner of St-Antoine and University of the Building cross-hatched in green on Schedule “A” and referred to as the Additional CNX area of 25,740 square feet of Usable Area and expanding westward therefrom, and shall be subject to the ratio and configuration conditions expressed in section 38.2 of the this Lease.

In order to exercise said right to expand, the Lessee shall provide the Lessor with a minimum thirty (30) days prior written notice stipulating the area required, the proposed fixturing period and the commencement date. The commencement date for this CNX Expansion Space shall be no more than 90 days following such written notice and shall in no event be later than May 1, 2000.

During such fixturing period and up to the commencement date for the CNX Expansion Space, the Lessee shall have access to the CNX Expansion Space but it shall not pay for any Minimum Rent or Additional Rent, it being understood however, that utilities (such as electricity and chilled water) consumed in the space during such period shall be paid for by Lessee. Representatives of both the Lessee and the Lessor shall have concurrent access to the CNX Expansion Space during said build-out periods in order to plan and execute their respective construction, fixturing and related tasks, the parties hereto hereby undertaking to be fully co-operative with each other so as to facilitate the accomplishment of such tasks.

This right to expand shall be exercised one or more times until such CNX Expansion Space has been entirely occupied or, at the latest, by February 28, 2000, after which date said right to expand shall cease to apply.

It is understood that the term for the CNX Expansion Space shall be co-terminus with the Premises as provided in section 3.1 of this Lease.

Except as otherwise provided herein, the CNX Expansion Space shall be subject to the same rates, terms and conditions as contained in this Lease, including the Leasehold Improvement Allowance of TWENTY SIX dollars and EIGHTY FIVE cents ($26.85) per square foot of Usable Area. Should this right to expand be exercised after October 1, 1999, then such amount of 26.85$ per square foot of Usable Area shall be prorated based on the remaining length of the Term.

In the event that the entire amount set in the Improvement Allowance is not spent once the CNX Expansion Space is completed, then such amount shall be deducted from the Minimum Rent using a 9% factor applied on a per square foot basis to the area for which it applies.

39.2     CONDITION OF THE CNX EXPANSION SPACE

The CNX Expansion Space shall be delivered to the Lessee in the condition described in Schedule “C” and with the following items completed:

q	the floor slab levelled and smooth, ready to receive carpet; and
q	installation of new white heating units to replace the existing ones along the St-Antoine street side border of the Additional CNX Space.

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39.3     CORRIDOR

In the event that Lessee does not exercise this option to lease the CNX Expansion Space in its entirety as shown on Schedule “A-2” and a corridor must be built to provide access from the freight elevators to the exit corridor CNX Expansion Space, Lessor shall determine the location of such corridor and Lessee and Lessor shall share the cost thereof equally, it being understood that Lessor shall construct same when required. Lessor may subsequently relocate said corridor from time to time without the consent of Lessee and all costs regarding same shall be solely at Lessor’s expense.

39.4     EXPIRY OF OPTION AND SUBSEQUENT RIGHTS

In the event that by February 28^th, 2000, the Lessee has not exercised the expansion rights granted pursuant to section 39, the Lessee shall have a right of first opportunity on the CNX Expansion Space or any portion thereof which then remains available. Said right of first opportunity shall expire on June 30th, 2000. By virtue of such right of first opportunity the Lessor agrees to offer, in writing, to the Lessee on or about March 1st, April 1st, May 1st June 1st and June 25th, 2000 any such space that is then available for leasing. Upon receipt of each of Lessor’s notice the Lessee shall have a maximum of five (5) business days therefrom to advise Lessor of its interest in leasing any or all of such space (the minimum area that Lessee may exercise such right upon being four thousand square feet (4,000 sq. ft.) of rentable area). Failure by the Lessee to exercise its right for any such space on any prior date will not prejudice its right over that same space if it is still available on any subsequent date, it being understood that Lessor’s notice shall include all space in the above mentioned area available on each one of the given dates provided for herein above, including that over which the Lessee has not previously exercised its right. Leasing of any such space shall be upon the same terms and conditions as provided for under this Offer (except for the leasehold improvement allowance which shall be pro-rated to the shorter term). In any interim period between the five (5) periods of exercise of this right of first opportunity provided for herein above, Lessor may dispose of any space not leased by the Lessee without consulting the Lessee in any way. However, should Lessor fail to advise Lessee on or about any one of the given dates provided for herein above, Lessor shall, prior to accepting during the relevant period any offer from a third party for any such space of a minimum of four thousand square feet (4,000 sq. ft.) of rentable area, provide notice of such offer stating the essential terms and conditions of the proposed offer, including rent and additional rent, and Lessee shall then have a period of three (3) business days to lease such space on the terms and conditions stated in the notice, failing which the rights granted to Lessee by the present section shall become null and void and of no effect whatsoever as it applies to the space indicated in such notice. The aforesaid right of first opportunity shall also avail as provided for herein above in the case of the expansion rights granted by virtue of section 38, as they apply to any remaining portion of the Third CSR-B Space.

40     OPTION TO RENEW THE LEASE

40.1     FIVE-YEAR OPTION

Provided the Lessee is not in default under this Lease or any other lease with the Lessor and further provided that Microcell Telecommunications Inc. or a company which it controls still bona fide occupy the Premises at the time this option is exercised, the Lessee shall have an option to renew the Lease for all or part of the then existing Premises for an additional term of five (5) years. The Lessee shall exercise this option to renew by giving Lessor a written notice of its intent to renew on or before midnight on January 31, 2009, it being agreed however that Lessee may withdraw such notice at any time within sixty (60) days after it is given and, in the event of such a withdrawal, the notice shall be deemed to never have been given.

40.2     RENEWAL RENTAL

The terms and conditions of the renewal shall be the same as those contained in this Lease except for the Minimum Rent. Said Minimum Rent shall be negotiated in good faith once the notice contemplated in section 40.1 is given by Lessee to Lessor and shall be based on then applicable market values calculated so that Lessee benefits from leasehold incentives then available in the Montreal office leasing market. Notwithstanding the foregoing, it is agreed that the net effective rental rate for the Lessor shall in no way be less than eight dollars ($8.00) per leaseable square

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foot with said rate to take into consideration, among other matters usually considered in calculating net effective rates in such circumstances, all costs to be incurred by Lessor in connection with the transaction and a discount rate equal to the interest then chargeable by Lessor’s bank on a mortgage having the same term as the renewal period in question.

40.3     ARBITRATION

In the event that the Lessor and the Lessee have not reached an agreement as to the Minimum Rent for the renewal term by October 1, 2009 and also provided that the renewal notice has not been withdrawn pursuant to section 40.1, then such matter shall be submitted to arbitration in accordance with Quebec’s Code of Civil Procedure. Such arbitration shall set the net effective rental rate and the leasing incentives and shall be binding upon both parties. Each party shall pay for its own arbitration expenses and the cost of the arbitrator shall be shared equally by Lessor and Lessee. Said arbitrator shall be selected by the parties hereto and if they cannot agree on the selection of a single arbitrator then each party shall appoint one arbitrator and the two arbitrators so appointed will proceed in accordance with the Code of Civil Procedure to appoint a third arbitrator.

41     RIGHT TO CANCEL

41.1     NOTICE & PAYMENT REQUIRED

The Lessee shall have the right to vacate the whole of, or any part of, all or any one or any combination of the areas enumerated in section 2.1 and to cancel the Lease as it applies to any such area or areas as of April 30, 2002, April 30, 2005 or April 30, 2007 by giving a twelve (12) month prior written notice to that effect to the Lessor. Six (6) months prior to the Lessee vacating all or any part of the Premises pursuant to this right to cancel, the Lessee shall pay to the Lessor a penalty, with all interest on said sum to be credited to Lessee as provided for herein below, calculated as follows:

41.1.1      if the right of cancellation is exercised on or before April 30th, 2001 to be effective on April 30, 2002, the Lessee shall pay a penalty in an amount equal to thirty two dollars ($32.00) per square foot of Rentable Area so cancelled;

41.1.2      if the right of cancellation is exercised on or before April 30th, 2004 to be effective on April 30, 2005, the Lessee shall pay a penalty in an amount equal to nineteen dollars ($19.00) per square foot of Rentable Area so cancelled; and

41.1.3      if the right of cancellation is exercised on or before April 30, 2006 to be effective on April 30, 2007, the Lessee shall pay a penalty in an amount equal to twelve dollars ($12.00) per square foot of Rentable Area so cancelled.

All interest for the six month period up to the effective date of cancellation shall be calculated on the amounts paid by the Lessee by virtue of the above at the rate then quoted by the Royal Bank of Canada for guaranteed investment certificates for a fixed six (6) month term. The amount of such interest shall be credited by Landlord against any amount due under this Lease or, if no such amount is due at such time and all of the Premises are vacated by the Lessee such that the Lease is terminated, reimbursed to the Lessee.

Notwithstanding the foregoing, it is agreed that the penalty provided for herein-above shall not apply to the Storage Area identified in section 2.1 nor to any additional area leased by virtue of section 35.1, without prejudice, however, to the payment by Lessee, if applicable, of any amount provided for in section 35.2.

41.2     CONFIGURATION OF REMAINING PREMISES

In the event that the Lessee exercises this right to cancel for part of the Premises only, then the cancelled space must be returned to the Lessor approximately square or rectangular in shape and

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the ratio of linear feet of exterior windows to the square footage of Usable Area of the portion to be cancelled must be greater than or equal to that found in the Premises occupied by the Lessee at the time of the notice. The cancelled space must also have access to an elevator lobby and comply with all then applicable building codes and related laws and regulations. Should Lessee exercise this right to cancel for any part of the Premises which would require the surrendered area to benefit from an access to and from the E/W Corridor, as of the date of cancellation of such space, the following shall apply:

q	Lessee shall have the right to return part of the E/W Corridor required to comply with the criteria provided for herein above for the space so returned;
q	Lessee’s obligation to pay Minimum Rent and Additional Rent as it applies to the portion of the E/W Corridor so returned shall cease;
q	Lessee shall pay to Lessor the applicable cancellation penalty in accordance with the applicable provisions of section 41.1 of this Lease computed on the area of the part of the E/W Corridor so returned; and
q	no area of the E/W Corridor shall be used in the calculation of the ratio of linear feet of exterior windows provided for herein above.

42     DEFINITIONS

In this Lease, the following defined terms have the meanings indicated:

42.1     “ADDITIONAL RENT”

“Additional Rent” means all amounts or monies, other than Minimum Rent, payable by the Lessee to the Lessor hereunder.

42.2     “BASE BUILDING PLANS”

“Base Building Plans” has the meaning ascribed thereto in section 6.1.

42.3     “BUILDING” OR “COMPLEX”

“Building” or “Complex” means the entire complex (together with the Land where the context requires it) known as “Place Bonaventure”, bearing civic address 900 de la Gauchetière West, Montreal, Quebec, erected generally in the quadrant bounded by de la Gauchetière West, University, St-Antoine and Mansfield, the whole comprising all structures and improvements, whether above or below ground, and consisting principally, without limiting the generality of the foregoing, of the main Place Bonaventure structure located mainly on lot 1,288,918 of the Cadastre of Quebec — a shopping concourse, the Hotel where the context requires it, an indoor parking garage, exhibition halls, the structure situated above St-Antoine Street, the loading dock and the access ramp thereto, as well as the underground passage located under de la Gauchetière Street and known as “Le Passage”, but excluding the areas used as part of the Canadian National Railway’s transportation network, the whole as shown on the site plan attached hereto as Schedule “B”. The terms “Building” or “Complex” shall also include or exclude, as the case may be, any area which may be acquired or disposed of from time to time and which is logically, economically or physically related or connected to the Building, Complex, or Land. Lessor shall supply Lessee with a photocopy of the most recent cadastral description of the Building within 10 business days of being requested to do so by Lessee.

42.4     “COMMON AREAS”

“Common Areas” mean any and all areas, services, and facilities of the Building not intended for the exclusive use or benefit of any individual party or lessee, including without restriction, all non-leaseable areas, service and administration areas, roof, floor slabs, exterior walls, and exterior and interior structural portions of the Building, public lavatories, truck docks, common loading areas, electrical, music and public address systems, plumbing and drainage systems, the heating, ventilation and air-conditioning system, customer and service stairways, escalators and

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elevators and all other areas, services and facilities and the space such equipment occupies, which are provided or designated from time to time by the Lessor as part of the Common Areas (and which may be reduced, extended or otherwise altered by the Lessor, at its entire and absolute discretion, from time to time).

42.5     “CNX EXPANSION SPACE”

“CNX Expansion Space” has the meaning ascribed thereto in section 39.

42.6     “CPI”

“CPI” has the meaning ascribed thereto in section 8.2.2.1.1.

42.7     “EXPIRATION DATE”

“Expiration Date” has the meaning ascribed thereto in section 3.1.

42.8     “HOTEL”

“Hotel” means the top portion of the Building, including the southern side of “F” floor, used as a hotel presently known as “Hotel Bonaventure”.

42.9     “IMPROVEMENT BUDGET”

“Improvement Budget” has the meaning ascribed thereto in section 7.

42.10     “LAND”

“Land” means mainly lot 1,288,918 of the Cadastre of Quebec as well as certain other lots on which the Complex, including its connections and accessories, is erected, including without limitation the land on, over or under which are erected the “Exhibition Hall South” and truck dock, the truck ramp, the underground garage and the underground passage and shops known as “Le Passage” under de la Gauchetière Street, the whole as shown on the site plan attached hereto as Schedule “B”. Upon request by the Lessee the Lessor shall provide the Lessee with a copy of a technical description of the Land prepared by a Quebec Land Surveyor, provided that the Lessee pays the Lessor for the costs of reproducing such copy. In addition to the foregoing, the term “Land” shall also include or exclude, as the case may be, any land which may be acquired or disposed of from time to time and which is logically, economically or physically related or connected to the Building, Complex, or Land.

42.11     “LEASE”

“Lease” means this agreement and all schedules hereto as described in section 1.1.

42.12     “LEASEHOLD IMPROVEMENT ALLOWANCE”

“Leasehold Improvement Allowance” has the meaning ascribed thereto in section 7.

42.13     “LEASE YEAR”

“Lease Year” means successive periods of twelve (12) calendar months commencing on the first day of the first full calendar month of the term hereof, with the exception of the first Lease Year, which may be for a maximum period of thirteen (13) months, and the last Lease Year which may be for a period of less than twelve (12) months. The Lessor shall have the right to change the Lease Year from time to time, provided that the Lessee is not materially prejudiced thereby.

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42.14     “LESSOR”

“Lessor” means the party first herein above described, and includes its successors and assigns. Furthermore, where the context permits, “Lessor” will also include all servants, employees, mandataries and contractors of the Lessor, as well as any other person under the Lessor’s control or for whom the Lessor is responsible in law.

42.15     “LESSEE”

“Lessee” means the person executing this Lease and named as the “Lessee”. Where the context permits, “Lessee” will also include all servants, employees, mandataries and contractors of the Lessee, as well as any person under the Lessee’s control or for whom the Lessee is responsible in law. “Lessee” shall also include any permitted assignee or sublessee in accordance with this Lease.

42.16     “MINIMUM RENT”

“Minimum Rent” means the rent payable pursuant to section 8.

42.17     “OFFER TO LEASE”

“Offer to Lease” means the offer to lease dated July 14, 1998 signed by Place Bonaventure Inc. on July 14, 1998 and by Microcell Telecommunications Inc. on July 15, 1998, together with any amendments thereto.

42.18     “OPERATING EXPENSES” DEFINITION

“Operating Expenses” mean the aggregate of any and all expenses incurred or to be incurred by the Lessor in any Operating Year, without duplication thereof, which are attributable, in accordance with the Recommended Accounting Practices for Real Estate and Development Companies produced by CIPREC (Canadian Institute of Public Real Estate Companies) and generally accepted accounting principles, to the maintenance, operation, repair, supervision, or replacement of the Building or the maintenance, operation or supervision of the Land and will include, if applicable and without limiting the generality of the foregoing:

42.18.1 Building Services

(i)	Cleaning;
(ii)	Electrical Power and Services;
(iii)	Heating, Ventilation and Air-Conditioning;
(iv)	Plumbing;
(v)	Elevator Service;
(vi)	Security and Hostesses;
(vii)	Material Handling; (viii) Water Taxes and Rates;
(ix)	Building operations, Building administration, general overhead, administrative expenses and the cost of operating the Building administration offices;
(x)	General Services;
(xi)	a 15% administration charge to be added over and above all other Operating Expenses and Real Estate Taxes;

42.18.2 Repairs and Modifications — Short Life

The cost of any repairs, modifications or additions to the Building and/or machinery and equipment therein and thereon where, in the reasonable opinion of the Lessor, such expenditure may reduce Operating Expenses, and the cost of any additional

43

equipment or improvements required by law or, in the Lessor’s reasonable opinion, for the benefit or safety of Building users, provided that said cost may properly be expensed in accordance with generally accepted accounting principles.

42.18.3      Repairs, Replacements, Modifications and Improvements — Long Life

The total annual amortisation of capital at rates determined from time to time by the Lessor on the basis of sound accounting principles, and interest on the unamortized capital at a rate equivalent to the lending rate actually charged or chargeable by the Lessor’s bankers from time to time, of the cost of all machinery, equipment, supplies, repairs, replacements, modifications and improvements of a non-structural nature which in the Lessor’s reasonable opinion have an estimated useful life longer than one (1) fiscal year of the Lessor and the cost whereof has not previously been charged to the Lessee.

42.18.4      Corporate and Financial Expenses

(i)	Insurance: The actual cost of all insurance that may be carried by the Lessor in respect of, or attributable to, the Building and the Land or related thereto including without limitation: all-risk insurance against fire and other perils, and liability regarding casualties, injuries and damages, boiler and machinery insurance and rental income insurance;
(ii)	Taxes: Capital tax or any tax being calculated with reference to a capital base, large corporation tax, and place of business, water and business taxes on the Lessor’s administration offices and on Common Areas;
(iii)	Legal and Audit: Reasonable legal and audit expenses incurred in connection with Building operations;
(iv)	Adversarial Expenses: All expenses incurred to contest, litigate, appeal, negotiate, settle, evaluate, analyse, dispute or in any way challenge the nature, quantum, appropriateness or any other aspect of any amount claimed by any party, public or private, in connection with the Building or the operation thereof, including, without limitation, legal, accounting, audit, expert, architectural, engineering, medical, consulting, arbitration and any other costs which are incurred as a necessary part of any dispute to which the Lessor is a party, acting in good faith;
(v)	Miscellaneous Expenses: Any other expense of a miscellaneous nature not properly attributable to any other category of expense provided such expense has been reasonably incurred and does not result from Lessor’s negligence.

It is expressly understood and agreed that Operating Expenses shall reflect deductions from the gross operating expenses of the Building of any and all costs actually recovered by the Lessor from the tenants of the Building by means of a direct charge back to such tenants.

42.19     “OPERATING YEAR”

“Operating Year” means a year commencing on January first of a calendar year and terminating on December thirty-first of that calendar year. The Lessor shall have the right to change the Operating Year from time to time, provided that the Lessee is not materially prejudiced thereby.

42.20     “PREMISES”

“Premises” has the meaning ascribed thereto in section 2.1.

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42.21     “PROPORTIONATE SHARE”

42.21.1      “Proportionate Share” of the Lessee means that part of the Real Estate Taxes and Operating Expenses payable by the Lessee to the Lessor as Additional Rent pursuant to this Lease. The Lessee’s Proportionate Share shall be calculated in accordance with the following rules and principles.

42.21.2      The Complex shall be divided into different categories of space, based on the use assigned to each such space by the Lessor from time to time. Without limiting the generality of the foregoing, and by way of example only and subject to the provisions of Section 0, presently, the Complex is divided into the following space categories:

(i)	office space;
(ii)	retail space;
(iii)	exhibition hall space;
(iv)	storage space;
(v)	parking areas; and
(vi)	the Hotel (where the context requires it);

It is understood that Lessor’s foregoing allocations of space to the various space categories of the Building shall not be done in a manner which would be less favourable for Lessee than the manner of so allocating which resulted in the estimate of $0.65 per square foot of Rentable Area as Lessee’s Proportionate Share of Real Estate Taxes described in section 8.2.1. In addition, said allocations of space shall not have the effect of either increasing or decreasing the 15% common area factor agreed to by the parties hereto in section 2.1 of this Lease.

42.21.3      The Lessor shall allocate or assign Operating Expenses and Real Estate Taxes to the different space categories of the Complex in accordance with generally accepted accounting principles using, to the extent possible, the quantitative criteria which are most relevant to, and which will result in an equitable allocation of, the type of expense in question among the occupants of the Complex. In the case of certain expenses which vary in accordance with the occupancy rate of the Complex, the Lessor shall apply a compensatory factor to such expenses in order to take into account unoccupied space. Said allocation or assignment by the Lessor shall be final and binding on the parties and without appeal once same is approved by the Lessor’s external auditors and if Lessee has not contested the validity of same by formal court proceedings to be instituted within thirty (30) days of having received written notice of same.

Without limiting the generality of the foregoing, whenever less than ninety-five percent (95%) of the square footage of the Rentable Area of the Building is occupied, the Lessor shall be entitled to allocate those expenses, which are attributable to the use and occupancy of the Building (such as but not limited to heating, air-conditioning and ventilating expenses, electricity, cleaning and cleaning supplies) to the rented space in the Building only and the Lessee shall pay a proportion of such expenses, same to be the ratio that the square footage of the Rentable Area of the Premises bears to the square footage of the Rentable Area of all rented space in the Building, excluding the hotel, exhibition halls, parking and storage areas. In no event will the Lessee be obliged to pay an amount in virtue of the foregoing which is greater than the amount the Lessee would have paid as the Lessee’s Proportionate Share had ninety-five percent (95%) of the square footage of the Rentable Area of the Building been rented and such expenses been included in Operating Expenses. It is understood that this paragraph shall not apply to Lessee’s Proportionate Share of Real Estate Taxes.

42.21.4      Once the Operating Expenses and Real Estate Taxes are so allocated or assigned, the total amount allocated or assigned to each category of space shall be divided by the number of square feet of Usable Area which comprises said category in order to

45

determine the rate per square foot of Usable Area of Operating Expenses or Real Estate Taxes, as the case may be.

42.21.5      At the end of each Operating Year, the Lessor shall provide the Lessee with a statement, certified by the Lessor’s external auditors, setting out the Operating Expenses and Real Estate Taxes applicable to the category of space to which the Premises belong, as well as the total number of square feet of Usable Area assigned to such category.

42.22     “REAL ESTATE TAXES” DEFINITION

42.22.1      “Real Estate Taxes” mean all taxes, including surtaxes, rates and assessments, general and special, levied or imposed with respect to the Building (including any accessories and improvements thereto) and the Land, including where applicable all taxes, rates, assessments and impositions, general and special, levied or imposed for municipal, inter-municipal, urban community, school or Olympic purposes, including public betterment or general or local improvements. Any credit, reimbursement, abatement or other form of relief in respect of real estate surtaxes shall be entirely for the benefit of the Lessor, and the amount thereof shall not, under any circumstance, be used to reduce Real Estate Taxes as defined herein. The Lessor shall have the right to pay any special assessment by instalments and, in such event, “Real Estate Taxes” shall include the amount of any such instalment paid including interest on the unpaid balance of the special assessment.

42.22.2      Real Estate Taxes shall also include any expenses (including legal, appraisal, administrative and overhead expenses) incurred by the Lessor in attempting to obtain a reduction of any Real Estate Taxes or valuation.

42.22.3      If the system of real estate taxation shall be altered or varied and any new tax or levy shall be levied or imposed on the Building and/or Land and/or the gross revenues therefrom, and/or the Lessor in substitution for and/or in addition to Real Estate Taxes presently levied or imposed on immoveables in the city, town or municipality in which the Building and Land are situated, then any such new tax or levy shall be included within the term “Real Estate Taxes” and the provisions of this Section 42.22 shall apply, mutatis mutandis. If the competent authority shall at any time eliminate any tax, rate, assessment or imposition which composed part of Real Estate Taxes for an Operating Year, the Lessor shall eliminate same from the Real Estate Taxes for such Operating Year for purposes of application of this clause.

42.22.4      The amount of the Real Estate Taxes which shall be deemed to have been levied or imposed with respect to the Building and the Land shall be such amount as the legal authority imposing Real Estate Taxes shall have attributed to the Building and the Land respectively or, in the absence of such attribution, or, if such legal authority shall include immoveables other than the Building and the Land in imposing such Real Estate Taxes, such amount as the Lessor in the exercise of its reasonable judgement shall establish.

42.23     “RENTABLE AREA”

“Rentable Area” shall mean the Usable Area to which is added fifteen percent (15%) of such Usable Area to account for a tenant’s use and enjoyment of the Floor Common Areas and the Building Common Areas (as these two last terms are defined in the current BOMA Standards of office space measurement) and commonly known as the gross square footage.

42.24     “REVISED METHOD”

“Revised Method” has the meaning ascribed thereto in section 8.2.2.1.2.

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42.25     “TERM”

“Term” has the meaning ascribed thereto in section 3.1.

42.26      “THIRD CSR-A SPACE”

“Third CSR-A Space” has the meaning ascribed thereto in section 37.1.

42.27      “THIRD CSR-B SPACE”

“Third CSR-B Space” has the meaning ascribed thereto in section 38.1.

42.28     “USABLE AREA”

“Usable Area” means the square footage of the Premises or other area calculated in accordance with current BOMA Standards of office space measurement, and commonly known as the net square footage.

IN WITNESS WHEREOF Lessor and Lessee have duly executed these presents as of the date and at the place first mentioned.

LESSOR
	WPBI PROPERTY MANAGEMENT INC.
WITNESSES:	PER:
		Irene Papavasil
		Date:
	PER:
		Richard Hylands
		Date:
LESSEE
	MICROCELL TELECOMMUNICATIONS INC.
WITNESSES:	PER:
		Alain Rhéaume
		Date:

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SCHEDULE “A” — PLAN OF PREMISES ON FLOOR “A” and EXPANSION RIGHTS ON FLOOR “A”

SCHEDULE “A-1” — PLAN OF PREMISES ON FLOOR “B” and EXPANSION RIGHTS ON FLOOR “B”

SCHEDULE “A-2” — PLAN OF PREMISES IN GARAGE

SCHEDULE “B-2” — SITE MAP

SCHEDULE “B” — SITE MAP

SCHEDULE “C” — WORK TO BE DONE IN VARIOUS AREAS

BASE BUILDING DESCRIPTION-
(Solutions Call Center Area & Initial CNX)

1	CEILING
a	Open ceiling with new ductwork, no cable tray for telephone and data (by Tenant)
b	Open ceiling with apparent structure and equipment
c	Open ceiling cleaned and painted
d	Ceiling and ductwork to be painted white in its entirety
2	HVAC
a	HVAC system controlled by zones or by bay
b	Complete HVAC system including thermostats Design criteria: 25 to 30% humidity in winter, 50 to 60% in summer Assume 4.5 watts per sq.ft. for connected load
3	ELECTRICITY
a	Indirect fluorescent lighting, 30 foot-candle, electronic ballasts, T-8 lamps, no glare, RP-1 norm
b	4.5W per sq. ft. of connected load distribution panels included (max. 200 ft from loads) and one empty conduit 1.5” diameter to each column wiring from panels to workstations will be done by tenant including circuit breakers
	Connected load as follows:             100% of call center and training rooms on the generator             engineers (CNX) from normal power             no workstations on UPS panels technical rooms will be connected by the tenant
c	600 Volt supplied in the rooms with a switch, final distribution to the equipment by tenant
d	Individual lighting controls for closed rooms
e	For electrical panel space planning, assumed a maximum of 4 workstations per circuit; Include an additional 42 circuit electrical panel on normal power for misc. loads
	Check meter for Microcell space and equipment
4	SPRINKLERS
a	Sprinklers as per codes for open area concept as well as for closed rooms, if we have a final layout before we build, if not, for one open area with no demising walls
5	FIRE PROTECTION
a	Fire hose cabinets relocated as per codes for one open area with no demising walls
b	Exit signs, PA loudspeakers, fire detectors, and pull stations as per codes for one open area with no demising walls
6	COLUMNS
a	Existing columns painted Surface conduits for wiring to be supplied by Tenant
	42.28.1
7	WINDOW COVERING
a	Solar shades on windows
8	STAIRCASES
a	NONE
9	ACOUSTICS
a	Acoustic treatment and consultant provided by Tenant
b	Mechanical equipment to meet NC-40 standard
10	DEMISING WALLS
a	Standard demising walls (prime coat painted) to separate tenant's premises from other tenant and from vacant spaces
11	DEMOLITION
a	Demolition of all existing partitions, equipment and finishes

BASE BUILDING DESCRIPTION
2nd CSR SPACE ON FLOOR “B” (45,754 of Usable Area.)

1	CEILING
a	Open ceiling with new ductwork, no cable tray for telephone and data (by Tenant)
b	Open ceiling with apparent structure and equipment
c	Open ceiling cleaned and painted
d	Ceiling and ductwork to be painted white in its entirety
2	HVAC
a	HVAC system controlled by zones or by bay
b	Complete HVAC system including thermostats Design criteria: 25 to 30% humidity in winter, 50 to 60% in summer Assume 4.5 watts per sq.ft. for connected load
3	ELECTRICITY
a	Indirect fluorescent lighting, 30 foot-candle, electronic ballasts, T-8 lamps, no glare, RP-1 norm
b	4.5W per sq. ft. of connected load distribution panels included (max. 200 ft from loads) and one empty conduit 1.5” diameter to each column wiring from panels to workstations will be done by tenant including circuit breakers
c	Individual lighting controls for closed rooms
d	For electrical panel space planning, assumed a maximum of 4 workstations per circuit;
4	SPRINKLERS
a	Sprinklers as per codes for open area concept as well as for closed rooms, if we have a final layout before we build, if not, for one open area with no demising walls
5	FIRE PROTECTION
a	Fire hose cabinets relocated as per codes for one open area with no demising walls
b	Exit signs, PA loudspeakers, fire detectors, and pull stations as per codes for one open area with no demising walls
6	COLUMNS
a	Existing columns painted Surface conduits for wiring to be supplied by Tenant
7	WINDOW COVERING
a	Solar shades on windows
8	STAIRCASES
a	Two(2) internal steel staircase with industrial steel deck steps, steel railings painted
9	ACOUSTICS
a	Acoustic treatment and consultant provided by Tenant
b	Mechanical equipment to meet NC-40 standard
10	DEMISING WALLS
a	Standard demising walls (prime coat painted) to separate tenant's premises from other tenant and from vacant spaces
11	DEMOLITION
a	Demolition of all existing partitions, equipment and finishes

EXPANSION OPTION — Third CSR-B Space
(Floor B — 13,500 square feet of Usable Area)

1	CEILING
a	Open ceiling with new ductwork, no cable tray for telephone and data (by Tenant)
b	Open ceiling with apparent structure and equipment
c	Open ceiling cleaned and painted
d	Ceiling and ductwork to be painted white in its entirety
2	HVAC
a	HVAC system controlled by zones or by bay
b	Complete HVAC system including thermostats Design criteria: 25 to 30% humidity in winter, 50 to 60% in summer Assume 4.5 watts per sq.ft. for connected load
3	ELECTRICITY
a	Indirect fluorescent lighting, 30 foot-candle, electronic ballasts, T-8 lamps, no glare, RP-1 norm
b	4.5W per sq. ft. of connected load distribution panels included (max. 200 ft from loads) and one empty conduit 1.5” diameter to each column wiring from panels to workstations will be done by tenant including circuit breakers
c	Individual lighting controls for closed rooms
d	For electrical panel space planning, assumed a maximum of 4 workstations per circuit;
4	SPRINKLERS
a	Sprinklers as per codes for open area concept as well as for closed rooms, if we have a final layout before we build, if not, for one open area with no demising walls
5	FIRE PROTECTION
a	Fire hose cabinets relocated as per codes for one open area with no demising walls
b	Exit signs, PA loudspeakers, fire detectors, and pull stations as per codes for one open area with no demising walls
6	COLUMNS
a	Existing columns painted Surface conduits for wiring to be supplied by Tenant
7	WINDOW COVERING
a	Solar shades on windows
8	STAIRCASES
a	NONE
9	ACOUSTICS
a	Acoustic treatment and consultant provided by Tenant
b	Mechanical equipment to meet NC-40 standard
10	DEMISING WALLS
a	Standard demising walls (prime coat painted) to separate tenant's premises from other tenant and from vacant spaces
11	DEMOLITION
a	Demolition of all existing partitions, equipment and finishes

BASE BUILDING DESCRIPTION
SOLUTIONS EXPANSION ON FLOOR “A” (32,028 square feet of Usable Area)
and
SOLUTIONS EXPANSION OPTION ON FLOOR “A” (3,720 square feet of Usable Area)

1.     CEILING

The CSR Space shall have:

• Open ceiling with new ductwork

• Open ceiling with apparent structure and equipment

• Open ceiling cleaned and painted with repairs with same standards as in the First CSR

• All equipment in the ceiling space to be co-ordinated with the Tenant and designers to insure that maximum heights are obtained where possible.

2.     HVAC

• HVAC system controlled by zones or by bay

• Complete HVAC system including thermostats for open space concept

• Design criteria: as per initial CSR premises

• New stickers to be installed after painting.

3.     ELECTRICITY

• Indirect fluorescent lighting, as per initial CSR premises including all lighting switches (low voltage and in-line) and emergency lighting as per code.

• Distribution panels included (Max. 200 ft. from loads).

• Wiring and conduits from panel to ceiling junction boxes as per Tenant’s layout and requirements.

• Lighting control panels for open space and closed rooms.

• 120-volt circuits are to be provided in ceiling junction boxes.

• For electrical panel space planning assume a maximum of 4 workstations per circuit, separate circuits for printers.

• All data cable trays by Tenant.

• Tenant shall have access to the technical floor below for routing of data and electrical conduits.

• Accent lighting including wiring to control panel for switches will be provided by the Tenant.

4.     SPRINKLERS AND PLUMBING

• Sprinklers as per codes for open area concept as well as for closed rooms, as per Tenant’s layout and co-ordinated to special ceilings.

• Drains relocated to locations acceptable to Tenant

5.     FIRE PROTECTION

• Exit signs, wall mounted where possible, PA loudspeakers, fire detectors and pull stations as per codes for one open area and closed rooms as per Tenant’s layout.

• Fire hose cabinets relocated to locations acceptable to Tenant.

6.     COLUMNS

• Existing columns sanded and cleaned where necessary, to the same standards as the First CSR.

• Preparation, plastering, painting and gypsing of square column by Tenant

7.     WINDOW COVERING

• Solar shades on windows.

8.     ACOUSTICS

• Mechanical equipment to meet NC-40 Standard

9.     DEMISING WALLS

\

• Standard demising walls (prime coat painted) to separate Tenant’s Premises from other tenant and from vacant space.

10.     DEMOLITION

• Demolition of all existing partitions, equipment and finishes. Notwithstanding the foregoing, this work shall not exceed a rate of $1.75 per square foot of Rentable Area. If the cost for demolition exceeds this price of $1.75 per square foot of Rentable Area, the excess shall be borne completely by Landlord.

BASE BUILDING DESCRIPTION
Additional CNX on Floor “A” (23,487 square feet of Usable Area)
and
CNX Expansion Space on Floor “A” (17,989 square feet of Usable Area )

1.     CEILING

Except in the NCC room, the Additional CNX Space shall have:

• Open ceiling with new ductwork

• Open ceiling with apparent structure and equipment

• Open ceiling cleaned and painted with repairs with same standards as in the First CSR

• All equipment in the ceiling space to be co-ordinated with the Tenant and designers to insure that maximum heights are obtained where possible.

• In the NCC room, the Landlord shall install a suspended acoustical tile system as a ceiling;

2.     HVAC

•	HVAC system controlled by zones or by bay
•	Complete HVAC system including thermostats for open space concept
•	Design criteria: as per initial CNX Premises
•	New stickers to be installed after painting.
	HVAC system for NCC room to conform to a suspended ceiling environment;

3.     ELECTRICITY

• Indirect fluorescent lighting, as per initial CNX premises including all lighting switches (low voltage and in-line) and emergency lighting as per code.

• Distribution panels included (Max. 200 ft. from loads).

• Wiring and conduits from panel to ceiling junction boxes as per Tenant’s layout and requirements.

• Lighting control panels for open space and closed rooms.

• 120-volt circuits are to be provided in ceiling junction boxes.

• For electrical panel space planning assume a maximum of 4 workstations per circuit, separate circuits for printers.

• All data cable trays by Tenant.

• Tenant shall have access to the technical floor below for routing of data and electrical conduits.

• Accent lighting including wiring to control panel for switches will be provided by the Tenant.

• In the NCC room, standard lighting

4.     SPRINKLERS AND PLUMBING

• Sprinklers as per codes for open area concept as well as for closed rooms, as per Tenant’s layout and co-ordinated to special ceilings.

• Drains relocated to locations acceptable to Tenant

5.     FIRE PROTECTION

• Exit signs, wall mounted where possible, PA loudspeakers, fire detectors and pull stations as per codes for one open area and closed rooms as per Tenant’s layout.

• Fire hose cabinets relocated to locations acceptable to Tenant.

6.     COLUMNS

• Existing columns sanded and cleaned where necessary, to the same standards as the First CSR.

• Preparation, plastering, painting and gypsing by square column by Tenant

7.     WINDOW COVERING

• Solar shades on windows including the two (2) south-east Bistros.

8.     ACOUSTICS

• Mechanical equipment to meet NC-40 Standard

9.     DEMISING WALLS

• Standard demising walls (prime coat painted) to separate Tenant’s Premises from other tenant and from vacant space.

10.     DEMOLITION

• Demolition of all existing partitions, equipment and finishes. Notwithstanding the foregoing, this work shall not exceed a rate of $1.75 per square foot of Rentable Area. If the cost for demolition exceeds this price of $1.75 per square foot of Rentable Area, the excess shall be borne completely by Landlord.

SCHEDULE “D” — ELECTRICAL CHARGES DETAILS (s. 10.1 & 10.2.1)

Procedure for invoicing chilled water

Each month an invoice will be produced by Lessor showing the total consumption of chilled water used after normal business hours (i.e. normal business hours are 8 am to 6 pm on Monday to Friday excluding legal holidays) in the Premises and the actual amount payable for same by Lessee. The applicable unit rate per ton-hour of consumption for the building for 1998 is 10.4 cents per ton-hour, said rate having been arrived at by calculating the total electrical costs incurred to produce the chilled water (i.e. operation of chillers, cooling towers, pumps, maintenance of equipment, chemicals, etc) divided by the total ton-hours produced by the system. This price will be adjusted each year in accordance with Hydro Quebec’s increases. Each year, a verification and/or calibration of the various chilled water meters will be made by Lessor and Lessee will be advised of same so that it may make its own verifications if it so desires. In the event that a meter malfunctions, the figures registered by the meter during a comparable period shall serve as a basis from which to analyze and calculate consumption for the period for which figures are unavailable due to the malfunction. If chilled water is supplied by Lessor with respect to Lessee’s computer areas which are connected to Lessee’s own chillers, the charge for the mutually agreed estimated consumption shall be at the building’s unit rate for each ton-hour and said amount shall be multiplied by the actual number of hours chilled water is provided to such space.

Procedure for invoicing electricity

Each month the total consumption of electricity in the Premises shall be calculated from check-meters installed for that purpose. Lessee shall be invoiced for such consumption on the basis of the total cost, including provincial tax and all other applicable taxes thereon, per KWH calculated using the tariff the public utility uses to charge Lessor. Lessor declares that at the time of signing, it was being charged by Hydro-Quebec on the basis of the “L” tariff. Each year, the parties will mutually establish an electrical utilization factor (i.e. “le facteur d’utilisation”) for a given month for the Premises in question by the manner illustrated in the table herein below. Both the demand and the consumption shall be used for the total of all check-meters together in establishing said utilization factor and said factor will then be used to determine the cost per KWH based on the applicable tariff. Said cost per KWH shall be applied to the amount of consumption determined by the applicable check-meter(s) and monthly invoices shall be produced accordingly.

“Facteur d’Utilisation” Sample Table

MICROCELL -
électricité						Panneau		Date et heure			2-aoû-99			30-jun-99
Compteur #	Modèle	Unit #		Rapport CT		mesure	mise en marche			Kw max.		Kwh	Kw max.		Kwh
AA01	7300		9218		200:5A	BD 8/A-3	29-mar-99		2:30 PM		01,9	37989	01,9		29125
AA02	7300		306		200:5A	BD 8/A-4	29-mar-99		2:45 PM		01,1	17294	01,1		13362
AA03	7300		304		400:5A	BD 8/A-2	29-mar-99		2:45 PM		03,8	63671	03,8		48060
AB01	7300		244		400:5A	BD 8/B-1	29-mar-99		2:00 PM		04,2	68304	04,2		54274
AB02	7300		305		200:5A	BD 8/B-3	29-mar-99		2:00 PM		02,9	51869	02,9		36293
											139	239127	139		181114

Consommation pour 33 jours:	239127	Kwh	-	181114	Kwh	=	58013	Kwh
Puissance max.:	139	Kw	x	792	hrs	=	110428.5	Kwh

Facteur d’utilisation: 58013 Kwh / 110428.5 Kwh = 0.525

TABLE OF CONTENTS

1	NATURE OF LEASE	1
1.1	INTRODUCTION	1
2	DESCRIPTION OF PREMISES	1
2.1	LOCATION AND SQUARE FOOTAGE	1
3	TERM	2
3.1	TERM	2
4	FIXTURING PERIODS	2
4.1	TECHNICAL SPACE-AREA	2
4.2	SOLUTIONS CALL CENTER-AREA F	2
4.3	SOLUTIONS EXPANSION-AREA G	3
4.4	ADDITIONAL CNX SPACE AREA	3
4.5	2ND CSR SPACE	3
4.6	PAYMENTS DURING FIXTURING PERIODS	4
5	EARLY OCCUPANCY	4
5.1	DATES OF OCCUPANCY	4
5.2	PAYMENTS DURING FIXTURING PERIODS	4
5.3	OCCUPATION OF PREMISES	4
6	BASE BUILDING PLANS AND BASE BUILDING BUDGET	4
6.1	PLANS	4
6.2	BASE BUILDING COSTS	4
6.3	SPECIFIC REQUIREMENTS	5
6.4	COOPERATION	5
6.5	BUDGETS	5
6.6	PERMITS	5
6.7	COSTS TO BE MINIMIZED	5
6.8	BASE BUILDING BUDGET FOR 2ND CSR SPACE	5
6.9	REMAINING AMOUNTS	5
7	TENANT IMPROVEMENT ALLOWANCE	6
7.1	AMOUNT OF ALLOWANCE	6
7.2	PLANS	6
7.3	COOPERATION	6
7.4	BUDGET ESTIMATE	6
7.5	COSTS TO BE MINIMIZED	6
7.6	REMAINING AMOUNTS	7
8	RENT	7
8.1	MINIMUM RENT	7
8.2	ADDITIONAL RENT	7
9	USE OF PREMISES	12
9.1	PERMITTED USE	12
9.2	CONDUCT OF BUSINESS	12
9.3	SIGNS, ADVERTISING, IDENTIFICATION, ELECTRONIC BOARDS	12
10	UTILITIES & SERVICES	13
10.1	HEATING, AIR CONDITIONING	13
10.2	ELECTRICITY	13
10.3	COMMON AREAS	14
10.4	ELEVATORS AND LOADING DOCKS	14
10.5	CLEANING	15
10.6	REFUSE DISPOSAL	15
10.7	VENTILATION AND ELECTRICAL CAPACITIES OF PREMISES	15
10.8	DISCONTINUATION OR MODIFICATION	15
10.9	LOCKS	15
10.10	FORCED ENTRY	16
11	SPECIAL PROVISIONS	16
11.1	FINISHING OF PREMISES	16
12	PAYMENT OF MONIES	16

1

12.1	PAYMENT	16
12.2	CURRENCY	17
12.3	INTEREST ON ARREARS	17
12.4	LESSOR’S LEGAL FEES	17
12.5	WAIVER OF RIGHT TO SET OFF	17
12.6	TERMINATION OF LEASE	17
13	BUSINESS, WATER AND IMPROVEMENTS TAXES	17
13.1	LESSEE’S RESPONSIBILITY	17
13.2	REIMBURSEMENT OF LESSOR	17
14	INSURANCE	18
14.1	INCREASE IN LESSOR’S INSURANCE	18
14.2	FIRE FIGHTING EQUIPMENT	18
14.3	REQUIRED COVERAGE	18
14.4	FAILURE TO INSURE	18
15	ALTERATIONS, REPAIRS, IMPROVEMENTS	19
15.1	CARE OF PREMISES	19
15.2	IMPROVEMENTS, REPAIRS, ALTERATIONS, INSTALLATIONS BY THE LESSEE	19
15.3	LEGAL HYPOTHECS	20
15.4	ALTERATIONS TO BUILDING AND LAND BY LESSOR	21
16	ASSIGNMENT AND SUBLETTING	21
16.1	CONSENT REQUIRED	21
16.2	LESSEE TO FURNISH INFORMATION	21
16.3	LESSOR’S RIGHTS	22
16.4	LESSOR’S CONDITIONS	22
16.5	REFUSAL OF CONSENT BY LESSOR	23
16.6	DEFINITION OF TRANSFER AND TRANSFEREE	23
16.7	ADVERTISING	23
17	DEFAULT OF LESSEE AND REMEDIES OF LESSOR	24
17.1	EVENTS OF DEFAULT	24
17.2	REMEDIES OF THE LESSOR	24
17.3	LESSOR’S CUMULATIVE RIGHTS	25
17.4	CROSS-DEFAULTS	25
18	DAMAGES	25
18.1	ACTS OF LESSEE	25
18.2	LIMITATION OF LESSOR’S LIABILITY	25
19	DAMAGE AND DESTRUCTION	26
19.1	TOTAL DESTRUCTION	26
19.2	RECONSTRUCTION OR REPAIR AND LIABILITY	27
20	EXPROPRIATION	27
20.1	EXPROPRIATION	27
21	TERMINATION OF LEASE	27
21.1	EFFECTIVE DATE OF TERMINATION	27
21.2	ABANDONMENT OF PROPERTY	27
22	ACCESS TO PREMISES	28
22.1	TO EXAMINE OR EXHIBIT PREMISES	28
22.2	TO INSTALL EQUIPMENT	28
23	COMPLIANCE WITH LAWS AND INDEMNIFICATION	28
23.1	COMPLIANCE	28
23.2	INDEMNIFICATION OF LESSOR	28
23.3	LESSEE’S OPERATING PERMITS	28
24	ALIENATION BY THE LESSOR	28
24.1	THE LESSOR’S RIGHT TO ASSIGN	28
24.2	SALE OR TRANSFER OF BUILDING	29
25	PRIOR OCCUPANCY	29
25.1	PRIOR OCCUPANCY	29
26	UNAVOIDABLE DELAY	29

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26.1	NON-RESPONSIBILITY OF LESSOR OR LESSEE	29
27	RELOCATION	29
27.1	RELOCATION OF LESSEE	29
28	NOTICES	29
28.1	NOTICES	29
28.2	ADDRESSES FOR PURPOSES OF NOTICE	30
28.3	ADDRESS FOR SERVICE	30
29	INTERPRETATION	30
29.1	REPRESENTATIONS, WARRANTIES, PRIOR AGREEMENTS, OFFER TO LEASE	30
29.2	EXCLUSIVITY	30
29.3	BROKERAGE COMMISSION	30
29.4	GOVERNING LAW	30
29.5	SUCCESSORS AND ASSIGNS	31
29.6	INTERPRETATION, CAPTIONS	31
29.7	WAIVER	31
29.8	DEROGATION FROM LAW	31
30	RULES AND REGULATIONS	31
30.1	ACTS OF NUISANCE	31
30.2	SIGNS, ADVERTISING	32
30.3	DIRECTORIES LISTINGS	32
30.4	REMOVAL OF FURNITURE, FIXTURES	32
30.5	INSTALLATION OF FLOOR COVERING	32
30.6	RECEIVING OF SUPPLIES	32
30.7	PASSAGES, ELEVATORS	32
30.8	COOKING ON PREMISES PROHIBITED	33
30.9	HEAVY OBJECTS	33
30.10	CANVASSING, SOLICITING	33
30.11	ANIMALS	33
30.12	FURTHER RULES AND REGULATIONS	33
30.13	WAIVER, MODIFICATION	33
30.14	PUBLICATION OF LEASE	33
31	OFFER TO LEASE	33
32	ANTENNAS	34
32.1	LICENSE AGREEMENT	34
32.2	RIGHTS AT EXPIRY OF TERM	34
32.3	USE OF RISERS	34
32.4	APPROVAL OF PLANS & SPECIFICATIONS	34
32.5	NON EXCLUSIVE RIGHT	34
32.6	UTILITIES FOR EQUIPMENT	35
33	VIDEOTRON FIBRE OPTIC SERVICE	35
33.1	COMPLIANCE WITH RULES	35
33.2	APPROVAL OF PLANS	35
33.3	OTHER USERS OF COMPLEX	35
34	INTERIOR PARKING	35
34.1	NUMBER OF SPACES	35
34.2	FENCED SPACE	35
34.3	CANCELLATION PROCEDURE	35
35	STORAGE SPACE AND BISTROS	36
35.1	RENTAL RATE	36
35.2	CANCELLATION PROCEDURE	36
35.3	APPROVAL OF PLANS	36
36	LEASE AMENDMENTS FOR EXPANSIONS AND REDUCTIONS	36
37	OPTION TO EXPAND CSR ON FLOOR “A”	36
37.1	OPTION TO EXPAND	36
37.2	CONFIGURATION OF THIRD CSR-A SPACE	36
37.3	THIRD CSR-A SPACE IMPROVEMENTS	37
38	OPTION TO EXPAND CSR ON FLOOR “B”	37
38.1	OPTION TO EXPAND (THIRD CSR-FLOOR “B”)	37

38.2		CONFIGURATION OF THIRD CSR-B SPACE	37
38.3		THIRD CSR-B IMPROVEMENTS	37
39		OPTION TO EXPAND CNX ON FLOOR “A”	38
39.1		OPTION TO EXPAND	38
39.2		CONDITION OF THE CNX EXPANSION SPACE	38
39.3		CORRIDOR	39
39.4		EXPIRY OF OPTION AND SUBSEQUENT RIGHTS	39
40		OPTION TO RENEW THE LEASE	39
40.1		FIVE-YEAR OPTION	39
40.2		RENEWAL RENTAL	39
40.3		ARBITRATION	40
41	RIGHT TO CANCEL		40
41.1		NOTICE & PAYMENT REQUIRED	40
41.2		CONFIGURATION OF REMAINING PREMISES	40
42	DEFINITIONS		41
42.1		“ADDITIONAL RENT”	41
42.2		“BASE BUILDING PLANS”	41
42.3		“BUILDING” OR “COMPLEX”	41
42.4		“COMMON AREAS”	41
42.5		“CNX EXPANSION SPACE”	42
42.6		“CPI”	42
42.7		“EXPIRATION DATE”	42
42.8		“HOTEL”	42
42.9		“IMPROVEMENT BUDGET”	42
42.10		“LAND”	42
42.11		“LEASE”	42
42.12		“LEASEHOLD IMPROVEMENT ALLOWANCE”	42
42.13		“LEASE YEAR”	42
42.14		“LESSOR”	43
42.15		“LESSEE”	43
42.16		“MINIMUM RENT”	43
42.17		“OFFER TO LEASE”	43
42.18		“OPERATING EXPENSES” DEFINITION	43
42.19		“OPERATING YEAR”	44
42.20		“PREMISES”	44
42.21		“PROPORTIONATE SHARE”	45
42.22		“REAL ESTATE TAXES” DEFINITION	46
42.23		“RENTABLE AREA”	46
42.24		“REVISED METHOD”	46
42.25		“TERM”	47
42.26		“THIRD CSR-A SPACE”	47
42.27		“THIRD CSR-B SPACE”	47
42.28		“USABLE AREA”	47
SCHEDULE “A” — PLAN OF PREMISES ON FLOOR “A” AND EXPANSION RIGHTS ON FLOOR “A”			1
SCHEDULE “A-1” — PLAN OF PREMISES ON FLOOR “B” AND EXPANSION RIGHTS ON FLOOR “B”			2
SCHEDULE “A-2” — PLAN OF PREMISES IN GARAGE			3
SCHEDULE “B” — SITE MAP			4
SCHEDULE “C” — WORK TO BE DONE IN VARIOUS AREAS			5
SCHEDULE “D” — ELECTRICAL CHARGES DETAILS (S. 10.1 & 10.2.1)			13
TABLE OF CONTENTS			I

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LEASE

BETWEEN

WPBI PROPERTY MANAGEMENT INC.
As Lessor

AND

MICROCELL TELECOMMUNICATIONS INC.
As Lessee

PLACE BONAVENTURE, MONTREAL

FIRST AMENDMENT AGREEMENT TO THE LEASE EXECUTED DECEMBER 9, 1999, entered into at the City of Montréal, Province of Québec, dated for reference as of October 1, 2000.

BETWEEN:	WPBI PROPERTY MANAGEMENT INC., a company duly incorporated under the laws of Canada, having its registered office at 600 de Maisonneuve Blvd. West, Suite 2600, Montréal, Québec H3A 3J2, herein acting on behalf of the owners of the property and represented by Irene Papavasil and Richard Hylands, both duly authorised as they respectively declare,
	hereinafter called the “Lessor”
AND:	MICROCELL TELECOMMUNICATIONS INC., a company duly incorporated under the laws of Canada, having its principal place of business at 1250 René-Lévesque Boulevard West, Suite 400, Montréal, Québec, H3B 4W8, herein acting and represented by Gaétan Jacques and Jacques Leduc, duly authorised as they so declare,
	hereinafter called the “Lessee”

WHEREAS the Lessor and the Lessee have entered into an Agreement of Lease dated for reference as of August 1^st, 1998 and signed December 9^th, 1999 (the “Lease”) for certain premises containing a Rentable Area of 242,065.80 square feet (the “Original Premises”) in the building known as Place Bonaventure, situated in Montréal, Province of Québec;

WHEREAS the Lessor has agreed to lease to the Lessee and the Lessee has agreed to lease from the Lessor that certain additional area located on Level “C” of Place Bonaventure more fully described hereinafter (the “Additional Premises”);

WHEREAS the parties have agreed to amend the Lease to include the Additional Premises;

WHEREAS all terms and conditions of the Lease, including the capitalised terms, shall continue to apply to the Original Premises and the Additional Premises except as modified by the terms hereof;

NOW THESE PRESENTS WITNESSETH THE FOLLOWING:

1)	The effective date of the following amendments shall be July 15th, 2000 (the “Effective Date”).
2)	As of the Effective Date, the Lease is amended by:

a) adding at the end of Section 2.1 the following:

“The Premises shall also contain the following area as shown outlined in red on the plan attached as Schedule “A-3”:

o the Additional Premises comprising a Usable Area of 48,464 square feet and a Rentable Area of 55,734 square feet.”

b) adding at the end of Section 3.1 the following:

o October 1^st, 2001 for the area defined as the Additional Premises.”

c) adding in Section 4, as subsection 4.5.1, the following:

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“With respect to the Additional Premises, the Lessee shall have the right to occupy the said Additional Premises on or before July 15^th, 2000, for the purpose of fixturing the Additional Premises. It is understood that the Lessor and the Lessee shall work together to plan and to complete the Base Building work outlined in the applicable portion of Schedule “C” at the same time as the Lessee completes its leasehold improvements to the said Additional Premises. Both parties will work together with the objective of giving final occupancy of the said Additional Premises to the Lessee on or before October 1^st, 2000.

The Lessor shall deliver the Additional Premises to the Lessee no later than July 15^th, 2000, clean and free of all partitions, having completed all demolition and cleanup work, the floor slab levelled and smooth ready to receive carpet. The costs related to the levelling of the floor shall be borne solely by the Lessor and shall not be paid for from the Base Building Budget or the Improvement Budget.

The Lessor shall provide and install the demising walls required to separate the Additional Premises from the premises of other tenants and, if applicable, from any common areas. The cost of any such demising walls, other than those which are already standing as at June 15^th, 2000, shall be part of the Base Building Budget and shall be paid therefrom.

The engineering plans for the Leasehold Improvements and their specifications shall be prepared by the Lessee’s engineering firm, Site Plus inc., and shall be submitted to the Lessor for approval which approval shall not be unreasonably withheld or delayed for more than five (5) days. The Lessor shall give access to the portion of the Building where the Additional Premises are to be located to the Lessee’s designers, engineers, architects and other representatives prior to the Effective Date in order that they may carry on therein any work required for the preparation of the aforesaid plans. The cost of the engineering plans and specifications shall be paid by the Lessee, the Lessor remaining responsible for the payment of any fees charged by its own professionals for the review of any such plans and specifications as well as for any supervision and co-ordination required. The Lessee shall assume the project management function for the construction of the Leasehold Improvements and no fees shall be charged by the Lessor thereon, unless the Lessee requires that the Lessor provide co-ordination and supervision services.”

d) adding in Section 6, as subsection 6.10, the following:

“6.10 With respect to the Additional Premises, all architectural, electrical, mechanical and plumbing plans related to the work to be performed by the Lessor to the Base Building and their revision shall be provided by the Lessor at the Lessor’s cost. All Base Building Plans are subject to Lessor’s and Lessee’s written approval which approval shall not be unreasonably withheld or delayed for more than five (5) days. For clarification purposes, the major components of the Base Building Budget are described in Schedule “C” herewith attached, (such components hereinafter referred to as the “Base Building”; and the cost of such Base Building hereinafter and hereinafter referred to as the “Base Building Budget”). It is agreed that the Lessee shall have no say or approval right of any kind with respect to any work to be done in connection with the exterior of the Building.

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With respect to the Additional Premises, the cost of the Base Building shall be assumed by the Lessor up to THIRTEEN DOLLARS ($13.00) per square foot of Rentable Area. Any amount attributable to the Goods and Services Tax or to any other similar tax shall be added to the Base Building budget and paid by the Lessor. Any additional Base Building costs over and above the Lessor’s contribution of THIRTEEN DOLLARS ($13.00) per square foot of the Rentable Area of the Additional Premises shall be borne by the Lessee. It is understood that the Base Building should cost approximately NINETEEN DOLLARS ($19.00) per square foot of the Rentable Area of the Additional Premises. The Lessee shall pay to the Lessor a FIVE PERCENT (5%) co-ordination fee on any work co-ordinated by the Lessor over and above the Base Building Budget of NINETEEN DOLLARS ($19.00) per square foot of the Rentable Area of the Additional Premises.

The provisions of subsections 6.3 to 6.7 shall apply to the work required for the Additional Premises.”

e) adding after Section 7, as subsection 7.1.1, the following:

“Notwithstanding the above, it is understood and agreed by the parties that for the Additional Premises the cash allowance to be paid by the Lessor shall be of a maximum of TWENTY-FIVE dollars ($25.00) per square foot of the Usable Area of the Additional Premises.”

f) adding in Section 7, as subsection 7.1.1.1, the following:

“Preliminary plans, architectural plans and construction plans for the Lessee’s leasehold improvements in and to the Additional Premises (the “Leasehold Improvements”) “shall be prepared on behalf of the Lessee by Innova Design and the Lessor shall contribute a maximum of ONE DOLLAR AND EIGHTY-FIVE CENTS ($1.85) per square foot of the Usable Area of the Additional Premises.”

g) adding in Section 8, as subsection 8.1.5, the following:

“8.1.5   MINIMUM RENT FOR THE ADDITIONAL PREMISES

For the Additional Premises, the Lessee shall pay to the Lessor during the Term, without demand, notice, setoff, compensation or deduction of any nature whatsoever, at the Lessor’s office or such other place in Canada as may be designated by the Lessor in writing to the Lessee, in lawful money of Canada, an annual minimum rent (hereinafter called the “Minimum Rent”) as follows:

8.1.5.1   First five year period

For the period commencing October 1st, 2000 and ending September 30th, 2005, ELEVEN DOLLARS ($11.00) per square foot of Rentable Area of the Additional Premises per annum, payable in advance in equal, consecutive, monthly instalments on the first day of each month;

8.1.5.2   Remaining period

For the period commencing October 1^st, 2005 and ending January 31^st, 2010, THIRTEEN DOLLARS ($13.00) per square foot of Rentable Area of the Additional Premises per

3

annum, payable in advance in equal, consecutive, monthly instalments on the first day of each month.

It is expressly understood that the above Minimum Rent specified in subparagraphs 8.1.5.1 and 8.1.5.2 is payable to the exclusion of any other Minimum Rent specified elsewhere in this Section.

8.1.5.3   Free Minimum Rent

Notwithstanding the foregoing, Lessee shall not be required to pay Minimum Rent with respect to an area of ten thousand (10,000) square feet of the Additional Premises for the period between October 1^st, 2000 and March 31, 2002”.

h) adding in Section 9, as subsection 9.1.1, the following:

“The Additional Premises shall be used for general office space, for the operations of a call centre and for the purpose of installing and operating a computer and data centre (the computer and data centre to be referred to as the “Additional Premises Technical Space”).”

i) adding in Section 10.1, as subsection 10.1.1, the following:

“Notwithstanding the above, Lessor shall cause the Additional Premises to be heated, air-conditioned and ventilated during Normal Business Hours only. Lessee may require additional hours of heating, air-conditioning and ventilation, in which case the Lessee shall pay for same as provided for herein-above.”

j) section 10.5 is amended by adding after the words “Technical Space” the words “and the Additional Premises Technical Space” in subsections 10.5.1 and 10.5.2.”

k) adding at the end of subsection 15.2.4 the following:

“Notwithstanding the foregoing, at the end of the Term or upon any earlier termination, at Lessor’s option to be exercised by written notice to the Lessee to be given no less than thirty (30) days prior to the end of the Term or such earlier termination, as the case may be, the Lessee shall remove any raised floors built in the Additional Premises (in which case the Lessee shall return the perimeter heating system to the condition which existed prior to the installation of any such raised floors), as well as any and all conduits and wiring which it is allowed to install under any such raised floors of the Additional Premises and shall, furthermore, remove any conduits and wiring up to any of the Building’s risers which may be used to link the Additional Premises to any other portion of the Premises located on level “A” or on level “B” of the Building, and in all cases make good any damage caused thereby, the whole at it’s sole cost and expense.”

l) adding at the end of subsection 27.1 the following:

“Notwithstanding the above, insofar as the Additional Premises are concerned, the Lessor shall have the right to make minor adjustments to the area of the Additional Premises, should such area be required to service other tenants of the building, so long as such changes do not adversely affect the Lessee’s operations in the Additional Premises.”

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m) Adding at the end of subsection 29.3, as subsection 29.3.1, the following:

“With respect to the Additional Premises, the Lessee represents and warrants that no broker, agent or other intermediary of any type, with the exception of Lafontaine Immobilier Corporatif Inc. negotiated or was instrumental in negotiating or consummating the agreement leading to the presents. Except for the commission payable under any written agreement between the above mentioned broker and the Lessor, the Lessee shall assume full responsibility for all fees due to any other broker, agent or other intermediary of any type working on its behalf and shall indemnify and save Lessor harmless from and against any claim or legal proceeding brought by anyone against Lessor in relation with any such fees, howsoever termed or qualified.”

n) adding in Section 35, as subsection 35.4 the following:

“As an accessory to the leasing of the Additional Premises, the Lessee shall also have the right to lease up to two (2) separate storage areas of a maximum of one thousand square feet (1,000 sq. ft.) each, to be located on the same floor as the Premises if such space is then available and to be used by the Lessee until such time as the Lessor requires any such area for use as common areas, office or technical premises for itself, any new tenant or any tenant then in the Building, at which point the Lessee shall, at its own cost, move any property it then has in the storage area(s) in question to an area or areas in the Building, the exact location of which area(s) shall be determined by the parties, acting reasonably (it being understood that each such new storage area shall have a superficial area approximately equivalent to that of the area(s) being surrendered). Leasing of such storage area(s) shall be at the rate indicated above and generally subject to the terms and conditions of subsections 35.1 and 35.2 hereof. The Lessee agrees that these options to lease storage space are to be exercised within the first five (5) years of the Term, failing which any option not then exercised shall become null and void.

Leasing of storage space is an accessory to the leasing by Lessee of the Premises. The Lessor provides any such storage space in an “as is” condition, the Lessee being responsible, at its sole cost and expense, for any planning and construction work required to convert any such space for use as storage. Lessee agrees to abide by all rules, regulations and directives of Lessor applicable to storage areas and their use communicated in writing, from time to time, to Lessee by Lessor. Lessee shall not bring into nor keep in any storage space anything that may pose a safety or environmental risk to the Building or its occupants. Lessee shall be solely responsible for any movable effect placed in any storage space and waives any and all rights it may have against the Lessor and those for whom the Lessor may be responsible at law for any damage or loss howsoever caused to such property, unless such damage results from the fault or negligence of the Lessor or those for whom the Lessor is responsible at law. Subject to the provisions of the first sentence of the first paragraph of this subsection 35.4 dealing with initial possession of a storage area on the same floor as the Premises, the Lessor shall, thereafter, have the right exercisable from time to time on thirty (3) days written notice to that effect to relocate such storage area to another location in the Building, at its sole cost and expense, and the Lessee agrees to move all its movable effects to such other area in a timely manner.”

5

o) adding in Section 39, immediately after Subsection 39.1, as subsection 39.2, the following:

“So long as the Lessee is not then, nor has recurrently been, in material default under any of its obligations by virtue of this Lease, the Lessee shall benefit from two (2) options to expand the Additional Premises. The first such option may be exercised at any time between October 1^st, 2000 and December 1^st, 2002 on an area of approximately FOUR THOUSAND EIGHT HUNDRED AND FIFTY-FOUR (4,854) square feet of Rentable Area shown outlined in blue on the plan attached hereto as Schedule “A-3”. The second such option may only be exercised after the exercise of the first option mentioned above up to December 1^st, 2002, on an area of approximately SEVEN THOUSAND AND SIXTEEN (7,016) square feet of Rentable Area shown outlined in green on the plan attached hereto as Schedule “A-3”. The Lessee shall provide the Lessor with four (4) months’ prior written notice of its intention to avail itself of any such option. The notice shall indicate the proposed occupancy date for the area in question, which shall be no more than six (6) months following the date of such notice. Leasing of any such space shall be subject to the same terms and conditions as provided for in this Agreement for the Additional Premises including Minimum Rent and the Lessee’s share of Operating Expenses and Real Estate Taxes and Surtax, as well as the Leasehold Improvement Allowance which shall, however, be prorated to the shorter term. Upon the exercise of either of the said options in accordance with each and every one of the above conditions, the Lessor shall prepare the required documentation evidencing that the expansion space in question is added to the Lease to form thereof.”

p) adding in Section 40, immediately after subsection 40.3, as subsection 40.4, the following:

“The foregoing right of renewal as provided for herein-above in subsections 40.1, 40.2 and 40.3 shall apply to the Additional Premises. However and notwithstanding the above, it is understood that in the exercise of its right to renew as it applies to the Additional Premises, the net effective rental rent shall never be less than NINE DOLLARS AND FIFTY CENTS ($9.50) per square foot of Rentable Area.”

q) adding after Section 41, as subsection 41.3, the following:

“Notwithstanding the above, no option to cancel shall apply to the Additional Premises, the Lessee, however, having the right to substitute all or part of the Additional Premises to a like area of the Premises in its exercise of the option to cancel provided for herein-above. It is understood, however, that the ratio of the area of any such space which the Lessee intends to surrender benefiting from windows to the area of any such space which the Lessee intends to surrender not benefiting from windows, must remain the same after the surrender of the space in question as it was prior to such surrender.”

r) adding to the Schedules annexed to the Lease the following:

i.	Schedule “A-3”;
ii.	The pages annexed

to this Agreement are to form part of Schedule “C” of the Lease and shall entitled “BASE BUILDING DESCRIPTION, ADDITIONAL PREMISES ON FLOOR “c” (48,464 square feet of Usable Area)”.

6

IN WITNESS WHEREOF Lessor and Lessee have duly executed these presents as of the date and at the place first mentioned.

WPBI PROPERTY MANAGEMENT INC.

PER: Irene Papavasil	WITNESS:
PER: Richard Hylands	WITNESS:

ON THIS                                               (13^th) DAY OF JULY 2001.

 
MICROCELL TELECOMMUNICATIONS INC.

PER: Gaétan Jacques	WITNESS:
PER: Jacques Leduc	WITNESS:

ON THIS                                               (15^th) DAY OF JUNE 2001.

7

SECOND AMENDMENT AGREEMENT TO LEASE EXECUTED DECEMBER 9, 1999, entered into at the City of Montréal, Province of Québec, dated for reference as of June 15, 2001.

BETWEEN:	WPBI PROPERTY MANAGEMENT INC., a company duly incorporated under the laws of Canada, having its registered office at 600 de Maisonneuve Blvd. West, Suite 2600, Montréal, Québec H3A 3J2, herein acting on behalf of the owners of the property and represented by Irene Papavasil and Richard Hylands, both duly authorised as they respectively declare,
	hereinafter called the “Lessor”
AND:	MICROCELL TELECOMMUNICATIONS INC., a company duly incorporated under the laws of Canada, having its principal place of business at 1250 René-Lévesque Boulevard West, Suite 400, Montréal, Québec, H3B 4W8, herein acting and represented by Gaétan Jacques and Jacques Leduc, both duly authorised as they respectively declare,
	hereinafter called the “Lessee”

WHEREAS the Lessor and the Lessee have entered into an Agreement of Lease dated for reference as of August 1^st, 1998 and signed December 9^th, 1999 (the “Lease”) for certain premises containing a Rentable Area of 242,065.80 square feet (the “Original Premises”) in the building known as Place Bonaventure, situate in Montréal, Province of Québec;

WHEREAS prior to the date hereof the Lessor has agreed to lease to the Lessee and the Lessee has agreed to lease from the Lessor that certain additional area located on Level “C “ of Place Bonaventure containing a Rentable Area of 55,734 square feet referred to in the First Amendment Agreement dated for reference as of October 1^st, 20000 as the Additional premises and more fully described therein;

WHEREAS the Lessor has now agreed to lease to the Lessee and the Lessee has agreed to lease from the Lessor that certain additional area located on Level “A” of Place Bonaventure more fully described hereinafter (the “Second Additional Premises”);

WHERAS the parties have agreed to deduct a portion of the space referred to in the Lease as the Solutions Expansion area in order that such space be added to the premises leased by Microcell Connexions Inc.;

WHEREAS the parties have agreed to amend the Lease to include the Second Additional Premises;

WHEREAS all terms and conditions of the Lease, including the capitalised terms, shall continue to apply to the Original premises and the Additional Premises except as modified by the terms and conditions hereof.

NOW THESE PRESENTS WITNESSETH THE FOLLOWING:

1)	The effective date of the following amendments shall be June 15th, 2001 (the “Effective Date”).
2)	As of the Effective Date, the Lease is amended by:

a) adding at the end of Section 2.1 the following:

“The portion of the space referred to above as the Solutions Expansion Area shown on Schedule “A-4” hereof and containing approximately 1,944 square feet in Usable Area amd 2,235 square feet in Rentable Area shall be, as and from September 1^st, 2001, deducted from the area indicated above as the Solutions Expansion Area and shall no longer be subject to the Lease, the

1

parties agreeing to carry out without delay any adjustments required by reason of such surrender.”

b) adding at the end of Section 2.1 the following:

“The Premises shall also contain the following area as shown outlined in red on the plan attached as Schedule “A-4”:

o the Second Additional Premises comprising a Usable Area of 22,524 square feet and a Rentable Area of 25,903 square feet, it being understood that the foregoing Usable Area shall be subject to final measurement as provided for in herein-above in the first paragraph of the present Section and that the Rentable Area shall be arrived at in the same manner as provided for therein.”

c) adding at the end of Section 3.1 the following:

o September 15^th, 2001 for the area referred to as the Second Additional Premises.”

d) adding in Section 4, as subsection 4.5.2, the following:

o “With respect to the Second Additional Premises, the Lessee shall have the right to occupy the area on Floor “A” known as the Second Additional Premises on or before July 1^st, 2001, 2001, for the purpose of fixturing the Second Additional Premises.

It is understood that the Lessor and the Lessee shall work together to plan and to complete the Base Building work outlined in Schedule “C” at the same time as the Lessee completes its Leasehold Improvements to the said Second Additional Premises.

Both parties will work together with the objective of giving final occupancy of the said Second Additional Premises to the Lessee on or before September 15, 2001.

Subject to Unavoidable Delay and provided the Lessee shall have submitted the Plans no more than five (5) business days following final acceptance and ratification of this Agreement, but in any event no later than June 15^th, 2001, the Lessor shall complete the construction and installation of the Base Building work described in Schedule C-1 within eight (8) weeks of final acceptance and ratification of this Agreement. Any delay by Lessee in providing the Plans to Lessor will extend the aforesaid delay accordingly. The aforesaid delay shall be subject to any statutory construction holidays. It being further understood that should the Plans be modified after their approval by Lessor so as to require additional work by the Lessor, the Lessee shall be responsible for the cost thereof and the above delay shall be adjusted to account for any time lost in the execution of any additional work made necessary be reason off such change. Any delay by the Lessor in providing the Base Building work to the Lessee within the eight (8) week period stipulated above will extend the commencement date for the Second Additional Premises by the same number of days delay in so doing.

The Lessor acknowledges that the lessee wishes to have the work required for the construction and installation of lessee’s Leasehold Improvements performed concurrently with the construction and installation of the Base Building work, the Lessor shall allow access to the Second Additional Area by

2

Lessee’s representatives and contractors as soon as the Lessor’s work is sufficiently completed to permit Lessee to carry out its work therein safely and efficiently and the parties agree to retain the same general contractor for the construction and installation of the Base Building work and the Leasehold Improvements.

The Lessor shall deliver the Additional Premises to the Lessee no later than July 1^st, 2001 clean and free of all partitions, having completed all demolition and cleanup work, the floor slab levelled and smooth ready to receive carpet. The costs related to the levelling of the floor shall be borne solely by the Lessor and shall not be paid for from the Base Building Budget or the Improvement Budget.

The Lessor shall provide and install the demising walls which may be required to separate the Second Additional Premises from the premises of other tenants and, if applicable, from any common areas. The cost of any such demising walls, other than those which are already standing as of the date hereof, are to be part of the Base Building Budget and shall be paid therefrom.

The engineering plans for the Leasehold Improvements and their specifications shall be prepared by the Lessee’s engineering firm, Site Plus inc., and shall be submitted to the Lessor for approval, which approval shall not be unreasonably withheld or delayed for more than five (5) business days.

Once this Agreement is duly executed and ratified, the Lessor shall give access to the portion of the Building where the Second Additional Premises are to be located to the Lessee’s designers, engineers, architects and other representatives prior to the Effective Date of the Agreement by virtue of which the Second Additional Space is leased in order that they may carry on therein any work required for the preparation of the aforesaid plans. The cost of the engineering plans and specifications shall be paid by the Lessee, the Lessor remaining responsible for the payment of any fees charged by its own professionals for the review of any such plans and specifications as well as for any supervision and co-ordination required. The Lessee shall assume the project management function for the construction of the Leasehold Improvements and no fees shall be charged by the Lessor thereon, unless the Lessee requires that the Lessor provide co-ordination and supervision services.”

e) adding in Section 6, as subsection 6.11, the following:

“With respect to the Second Additional Premises, all architectural, electrical, mechanical and plumbing plans related to the work to be performed by the Lessor to the base building and their revision (hereinafter referred to as the “Base Building Plans”) shall be provided by the Lessor at the Lessor’s cost. All Base Building Plans are subject to Lessor’s and Lessee’s written approval which approval shall not be unreasonably withheld or delayed for more than five (5) business days. For clarification purposes, the major components of the Base Building budget are described in Schedule “C-1” attached to the Agreement by virtue of which the Additional Space is leased, (such components hereinafter referred to as the “Base Building” and the cost of such Base Building hereinafter referred to as the “Base Building Budget”). It is agreed that the Lessee shall have no say or approval right of any kind with respect to any work to be done in connection with the exterior of the Building.

3

With respect to the Second Additional Premises, the cost of the Base Building shall be assumed by the Lessor up to THIRTEEN DOLLARS ($13.00) per square foot of Rentable Area. Any amount attributable to the Goods and Services Tax or to any other similar tax shall be added to the Base Building Budget and paid by the Lessor. Any additional Base Building costs over and above the Lessor’s contribution of THIRTEEN DOLLARS ($13.00) per square foot of the Rentable Area of the Second Additional Premises shall be borne by the Lessee. It is understood that the Base Building should cost approximately NINETEEN DOLLARS ($19.00) per square foot of the Rentable Area of the Second Additional Premises, the Lessee shall pay to the Lessor a FIVE PERCENT (5%) co-ordination fee on any work co-ordinated by the Lessor over and above the Base Building Budget of NINETEEN DOLLARS ($19.00) per square foot of the Rentable Area of the Second Additional Premises.

The provisions of subsections 6.3 to 6.7 inclusively shall apply to the work required for the Second Additional Premises.”

f) adding in Section 7, as subsection 7.1.2, the following:

“Notwithstanding the above, it is understood and agreed by the parties that for the Second Additional Premises the cash allowance to be paid by the Lessor shall be of a maximum of TWENTY-TWO DOLLARS AND FIFTY-FIVE CENTS ($22.55) per square foot of the Usable Area of the Second Additional Premises.”

g) adding after Section 7, as subsection 7.1.2.1, the following:

“Preliminary plans, architectural plans and construction plans (the “Plans”) for the Lessee’s leasehold improvements in and to the Second Additional Premises (the “Leasehold Improvements”) shall be prepared on behalf of the Lessee by the Lessee’s designers and approved by an architect licensed to practice in the Province of Quebec designated by the Lessee, and the Lessor shall contribute a maximum of ONE DOLLAR AND SIXTY-SEVEN CENTS ($1.67) per square foot of the Usable Area of the Second Additional Premises.”

h) adding in Section 8, as subsection 8.1.6, the following:

“8.1.5   MINIMUM RENT FOR THE SECOND ADDITIONAL PREMISES

For the Second Additional Premises, the Lessee shall pay to the Lessor during the Term, without demand, notice, setoff, compensation or deduction of any nature whatsoever, at the Lessor’s office or such other place in Canada as may be designated by the Lessor in writing to the Lessee, in lawful money of Canada, an annual minimum rent (hereinafter called the “Minimum Rent”) as follows:

8.1.6.1 For the period commencing September 15, 2001 and ending September 30^th, 2005, ELEVEN DOLLARS ($11.00) per square foot of Rentable Area of the Second Additional Premises per annum, payable in advance in equal, consecutive, monthly instalments on the first day of each month;

8.1.6.2 For the period commencing October 1^st, 2005 and ending January 31^st, 2010, THIRTEEN DOLLARS ($13.00) per square foot of Rentable

4

Area of the Second Additional Premises per annum, payable in advance in equal, consecutive, monthly instalments on the first day of each month.

It is expressly understood that the above Minimum Rent specified in subparagraphs 8.1.6.1 and 8.1.6.2 is payable to the exclusion of any other Minimum Rent specified elsewhere in this Section.

i) The provisions of subsections 8.2.2.1.2 and 8.2.2.1.3 as well as the provisions of section 42.24 of the Lease shall have no application to the Second Additional Premises;

j) adding in Section 9, as subsection 9.1.2, the following:

“The Second Additional Premises shall be used solely for general office space.”

k) adding at the end of subsection 15.2.4 the following:

“Notwithstanding the foregoing, at the end of the Term or upon any earlier termination, at Lessor’s option to be exercised by written notice to the Lessee to be given no less than thirty (30) days prior to the end of the Term or such earlier termination, as the case may be, the Lessee shall remove any improvements not of a type normally required for office premises which the Lessee may in the future be allowed by the Lessor to install, such as but not limited to, raised floors or conduits and wiring which installed under any such raised floors of the Second Additional Premises and in all cases make good any damage caused thereby, the whole at its sole cost and expense.”

l) adding at the end of subsection 27.1 the following:

“Notwithstanding the above, insofar as the Second Additional Premises are concerned, the Lessor shall have the right to make minor adjustments to the area of the Second Additional Premises, should such area be required to service other tenants of the building, so long as such changes do not adversely affect the Lessee’s operations in the Second Additional Premises.”

m) adding at the end of subsection 29.3, as subsection 29.3.2, the following:

“With respect to the Second Additional Premises, the Lessee represents and warrants that no broker, agent or other intermediary of any type, with the exception of Lafontaine Immobilier Corporatif inc. negotiated or was instrumental in negotiating or consummating the agreement leading to these presents. Except for the commission payable under any written agreement between the above mentioned broker and the Lessor, the Lessee shall assume full responsibility for all fees due to any other broker, agent or other intermediary of any type working on its behalf and shall indemnify and save Lessor harmless from and against any claim or legal proceeding brought by anyone against Lessor in relation with any such fees, howsoever termed or qualified.”

n) adding in Section 34 at the end of section 34.1 the following:

As of the date of commencement of the Term for the Second Additional Premises and throughout the Term and any extension thereof, the Lessor shall provide the Lessee, at its request, with up to eight (8) unreserved interior parking spaces at prevailing rates as same may be established from time to time.

5

o) adding in Section 35, at the end of subsection 35.1 the following:

“The parties acknowledge that the Lessee has prior to the date of execution of the Lease exercised its right to lease three (3) of the four (4) storage areas above described and that the location of such storage spaces are as follows:

i. the area described in subsection 2.1 at the fifth (5th) indented paragraph and shown on Schedule “A”, which accounts for the exercise of two (2) options;

ii. the area described in subsection 2.1 at the sixth (6^th) indented paragraph and shown on Schedule “A-2, which accounts for the exercise of one (1) option.

The parties further acknowledge that notwithstanding that these areas have been included in the description of the leased Premises under Section 2.1, the Rent payable for such areas is to be calculated at the rate provided for in the present Section for storage spaces.

As an accessory to the leasing of the Second Additional Premises, the Lessor hereby leases to the Lessee that certain space located on Level “A” and shown on Schedule “A-4” containing approximately 1,644 square feet of Usable Area and 1,890 square feet of Rentable Area (it being understood that 1,000 square feet of such Usable Area constitutes the exercise of the fourth (4^th) option provided for in the Lease), generally subject to the terms and conditions of subsections 35.1 and 35.2 hereof (as hereby amended), save and except that the rent payable by Lessee to Lessor shall be calculated as follows: (i) for 1,000 square feet of Usable Area of the said storage space, the rent shall be as provided for in the aforesaid subsection of the Lease; (ii) for the portion of such storage space over and above 1,000 square feet of Usable Area, the rent for the Operating Year 2001 shall be at an annual all inclusive rate of TEN DOLLARS ($10.00) per square foot and for each subsequent Operating Year, the Lessor shall have the right to increase the rate which was payable for the preceding Operating Year for such portion of the said storage area (with retroactive effect to the beginning of the Operating Year in question) by fifty percent (50%) of the difference between the Base CPI and the Current CPI. The Lessor provides such storage space in an “as is” condition, the Lessee being responsible, at its sole cost and expense, for any planning and construction work required to convert any such space for use as storage. Lessee agrees to abide by all rules, regulations and directives of Lessor applicable to storage areas and their use communicated in writing, from time to time, to Lessee by Lessor. Lessee shall not bring into nor keep in the any storage space anything which may pose a safety or environmental risk to the Building or its occupants. Lessee shall be solely responsible for any movable effect placed in any storage space and waives any and all rights it may have against the Lessor and those for whom the Lessor may be responsible at law for any damage or loss howsoever caused to such property, unless such damage results from the fault or negligence of the Lessor or those for whom the Lessor is responsible at law.”

p) Adding in Section 40, immediately after subsection 40.4, as subsection 40.5, the following:

“The foregoing right of renewal as provided for herein-above in subsections 40.1, 40.2 and 40.3 shall apply to the Second

6

Additional Premises. However and notwithstanding the above, it is understood that in the exercise of its right to renew as it applies to the Second Additional Premises, the net effective rental rent shall never be less than NINE DOLLARS AND FIFTY CENTS ($9.50) per square foot of Rentable Area.”

q) adding after Section 41, as subsection 41.4, the following:

“Notwithstanding the above, no option to cancel shall apply to the Second Additional Premises, the Lessee, however, having the right to substitute all or part of the Second Additional Premises to a like area of the Premises in its exercise of the option to cancel provided for herein-above. It is understood, however, that the ratio of the area of any such space which the Lessee intends to surrender benefiting from windows to the area of any such space which the Lessee intends to surrender not benefiting from windows, must remain the same after the surrender of the space in question as it was prior to such surrender.”

r) adding to the Schedules annexed to the Lease the following:

i.	Schedule “A-4”, Plan showing Second Additional Premises;
ii.	Schedule “C-1”, Base Building Work for Second Additional Premises”

IN WITNESS WHEREOF Lessor and Lessee have duly executed these presents as of the date and at the place first mentioned.

WPBI PROPERTY MANAGEMENT INC.

PER: Irene Papavasil	WITNESS:
PER: Richard Hylands	WITNESS:

ON THIS                                               (13^th) DAY OF JULY 2001.

 
MICROCELL TELECOMMUNICATIONS INC.

PER: Gaétan Jacques	WITNESS:
PER: Jacques Leduc	WITNESS:

ON THIS                                               (15^th) DAY OF JUNE 2001.

7 EX-8.1 18 m10142orexv8w1.htm EX-8.1

EXHIBIT 8.1

LIST OF SUBSIDIARIES

• 2861399 Canada Inc., a corporation existing under the CBCA.

• Microcell Solutions Inc., a corporation existing under the CBCA and doing business under the trade-mark Fido®.

• Telcom Investments Inc., a corporation existing under the laws of the state of Delaware.

• Inukshuk Internet Inc., a corporation existing under the CBCA.

EX-11.1 19 m10142orexv11w1.htm EX-11.1

EXHIBIT 11.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, André Tremblay, President and Chief Executive Officer of Microcell Telecommunications Inc., certify that:

1.	I have reviewed this annual report on Form 20-F of Microcell Telecommunications Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

     c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

     a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: June 25, 2003

/s/ André Tremblay


André Tremblay

President and Chief Executive Officer

EX-11.2 20 m10142orexv11w2.htm EX-11.2

EXHIBIT 11.2

CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT

I, Jacques Leduc, Chief Financial Officer and Treasurer of Microcell Telecommunications Inc. certify that:

1.	I have reviewed this annual report on Form 20-F of Microcell Telecommunications Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: June 25, 2003

/s/ Jacques Leduc
Jacques Leduc
Chief Financial Officer and Treasurer

EX-11.3 21 m10142orexv11w3.htm EX-11.3

EXHIBIT 11.3

PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18
OF THE UNITED STATES CODE

CERTIFICATION FORM — SECTION 906 OF SARBANES-OXLEY ACT

I, André Tremblay, the President and Chief Executive Officer of Microcell Telecommunications Inc., (the “Company”) certify to the best of my knowledge that (1) the Company’s 20-F Form fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in the 20-F Form fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 25, 2003

/s/ André Tremblay
André Tremblay

EX-11.4 22 m10142orexv11w4.htm EX-11.4

EXHIBIT 11.4

PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18
OF THE UNITED STATES CODE

CERTIFICATION FORM — SECTION 906 OF SARBANES-OXLEY ACT

I, Jacques Leduc, the Chief Financial Officer and Treasurer of Microcell Telecommunications Inc., (the “Company”) certify to the best of my knowledge that (1) the Company’s 20-F Form fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in the 20-F Form fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 25, 2003

/s/ Jacques Leduc
Jacques Leduc

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EX-2.3

warrant indenture for the warrants 2005

EX-2.4

warrant indenture for the warrants 2008

EX-2.5

shareholder rights plan agreement may 1, 2003

EX-4.1

tranche a exit facility agreement may 1, 2003

EX-4.2

tranche b credit agreement dated may 1, 2003

EX-4.3

tranche c credit agreement dated may 1, 2003

EX-4.4

intercreditor and collateral agency agreement

EX-4.5

stock option plan of microcell dated may 1, 2003

EX-4.6

stock purchase plan of microcell dated may 1, 2003

EX-4.7

pcs licence conditions issued by industry canada

EX-4.8

lease dated as of august 1, 1998

EX-8.1

list of subsidiaries

EX-11.1

certification of the president and ceo of microcel

EX-11.2

certification of the cfo and treasurer of microcel

EX-11.3

certification form of the president and ceo

EX-11.4

certification form of the cfo and treasurer