tranche c credit agreement dated may 1, 2003



 



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


 






 


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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



 






 






- 12 -




	 	 	 	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;



 






 






- 13 -




	 	(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.


 






 


- 14 -



          “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


 






 


- 15 -



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).


 






 


- 16 -



     “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.


 






 


- 17 -



     “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:


 






 


- 18 -




	 	 	 	 	 
	SCHEDULES:	 	 	 	 
	 	 	 	 	 
	Schedule A	 	
-
	 	Lenders Loans
	 	 	 	 	 
	Schedule B	 	
-
	 	Disclosed Matters
	 	 	 	 	 
	EXHIBITS:	 	 	 	 
	 	 	 	 	 
	Exhibit A	 	
-
	 	Form of Assignment and Assumption
	 	 	 	 	 
	Exhibit B	 	
-
	 	Form of Intercreditor Agreement



 






 



- 19 -



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).



 






 




- 20 -



	 	(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



 






 






- 21 -




	 	 	 	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.



 






 






- 22 -



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



 






 






- 25 -




	 	 	 	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


 






 


- 26 -



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



 






 






- 27 -




	 	 	 	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


 






 


- 29 -



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



 






 






- 30 -




	 	 	 	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.



 






 






- 31 -




	 	(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;



 






 






- 32 -




	 	 	 	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



 






 






- 53 -




	 		 	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.



 






 






- 55 -




	 	(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.


 






 


- 56 -



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	 



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	 	 	 	 	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	 



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	 	 	 	 	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	 




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