tranche a exit facility agreement may 1, 2003



 



Exhibit 4.1


TRANCHE A EXIT FACILITY AGREEMENT



          THIS TRANCHE A EXIT FACILITY AGREEMENT (this “Agreement”) dated as of May
1, 2003 is entered into among Microcell Telecommunications Inc., as Parent,
Microcell Solutions Inc., as Borrower, the financial institutions from time to
time parties hereto as Lenders, and JPMorgan Chase Bank, Toronto Branch, as
Administrative Agent, Collateral Agent and Issuing Bank. Reference is made to
the Introductory Statements below and Section 1.1 hereof for the definition of
certain capitalized terms used herein.



INTRODUCTORY STATEMENTS:


A.       Pursuant to that certain Amended and Restated Credit Agreement, dated as of
May 7, 1999 (as amended, supplemented or otherwise modified or restated from
time to time, the “Pre-Filing Credit Agreement”), among Microcell Connexions
Inc. and Microcell Solutions Inc. (collectively, the “Pre-Filing Borrowers”),
Microcell Telecommunications Inc. (the “Pre-Filing Parent”), the lenders from
time to time party thereto (collectively, the “Pre-Filing Lenders”), J.P.
Morgan Bank Canada, as administrative agent and collateral agent for the
Pre-Filing Lenders, and National Bank of Canada, as letter of credit issuing
bank, the Pre-Filing Lenders made loans and advances to, issued letters of
credit for and/or provided other financial accommodations to, or on behalf of,
the Pre-Filing Borrowers (collectively, the “Pre-Filing Loans”);


B.       The Pre-Filing Loans and other obligations of the Pre-Filing Borrowers under
the Pre-Filing Credit Agreement and the guarantors in respect thereof, together
with certain obligations under certain terminated hedging arrangements with
J.P. Morgan Bank Canada as a successor in interest to ABN-AMRO Bank Canada and
Canadian Imperial Bank of Commerce (collectively, the “Pre-Filing Hedging
Obligations”), are secured by valid, binding, enforceable and perfected liens,
security interests and hypothecs in substantially all the assets of the
Pre-Filing Borrowers, the Pre-Filing Parent and such guarantors thereof;


C.       On January 3, 2003, the Pre-Filing Parent, the Pre-Filing Borrowers, and
certain other direct or indirect subsidiaries of the Pre-Filing Parent
commenced proceedings under the Companies Creditors Arrangement Act (the
“CCAA”) and the Canada Business Corporations Act (the “CBCA”); a plan of
reorganization and of compromise and arrangement (as such plan of
reorganization and of compromise and arrangement may be amended, modified or
supplemented in accordance with its terms, the “Plan of Arrangement”) was filed
with the Court on February 20, 2003;


D.       The Plan of Arrangement was sanctioned and approved by the Court on March
18, 2003;


E.       Pursuant to the Plan of Arrangement, the obligations under the Pre-Filing
Credit Agreement and the Pre-Filing Hedging Obligations (collectively,
“Pre-Filing Secured Claims”) are to be restructured;


 






 


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F.       Pursuant to the Plan of Arrangement and the Sanction Order, through a series
of transactions, the Pre-Filing Borrowers and the Pre-Filing Parent are
completing a corporate reorganization, with the result that the obligations of
the Pre-Filing Borrowers and the Pre-Filing Parent have become the obligations
of the Borrower and the Parent, respectively;


G.       Pursuant to the Plan of Arrangement, the Borrower is permitted to obtain a
first-ranking secured credit facility in a principal amount of up to
Cdn.$75,000,000; the Lenders hereunder are prepared to provide to the Borrower
a first-ranking secured revolving credit facility in a principal amount of
Cdn.$25,000,000, as provided hereby, and the Parent and certain subsidiaries of
the Borrower and the Parent shall irrevocably and unconditionally guarantee the
obligations of the Borrower hereunder.


          NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Lenders, the Administrative Agent,
the Parent and the Borrower hereby agree as follows.



ARTICLE 1



DEFINITIONS


1.1      Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:


     “Acceptance Fee” means a fee payable by the Borrower to the Administrative
Agent for the account of a Lender in Canadian Dollars with respect to the
acceptance of a B/A or the making of a B/A Equivalent Loan, calculated on the
face amount of the B/A or the undiscounted amount of the B/A Equivalent Loan at
the rate per annum equal to the Applicable Margin on the basis of the number of
days in the applicable Contract Period (including the date of acceptance and
excluding the date of maturity) and a year of 365 days, (it being agreed that
the Applicable Margin in respect of a B/A Equivalent Loan is equivalent to the
Applicable Margin otherwise applicable to the B/A which has been replaced by
the making of such B/A Equivalent Loan pursuant to Section 2.7 (h)).


     “Additional Subsidiary” is defined in Section 5.12.


     “Administrative Agent” means JPMorgan Chase Bank, Toronto Branch, in its
capacity as administrative agent for the Lenders hereunder, or any successor
Administrative Agent appointed pursuant to Section 8.9.


     “Administrative Questionnaire” means an administrative questionnaire in a
form supplied by the Administrative Agent.


     “Affiliate” means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with, such Person.


 






 


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     “Agents” means the Administrative Agent and the Collateral Agent.


     “Applicable Margin” means, (i) with respect to any Prime Rate Loan or Base
Rate Loan, 2.50% (250 basis points), and (ii) with respect to any Eurodollar
Loan or B/A Borrowing, 3.50% (350 basis points).


     “Applicable Percentage” means, with respect to any Lender, the percentage
of the total Loans represented by such Lender’s Loans or, if on any date of
determination no Loans are outstanding, the percentage of the total Commitments
represented by such Lender’s Commitments, as listed in Schedule A.


     “ARPU” means average retail revenue per Subscriber per month. For
greater certainty, ARPU shall exclude “roaming-in charges” (i.e. roaming
charges incurred by users which are not Subscribers).


     “Asset Disposition” means, with respect to any Credit Party, the sale,
lease, license, transfer, assignment or other disposition of, or the
expropriation, condemnation, destruction or other loss of, all or any portion
of its business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether in one transaction or a series of transactions
(including a Sale/Leaseback Transaction), other than (a) inventory sold in the
ordinary course of business upon customary credit terms, (b) sales of scrap or
obsolete material or equipment which are not material in the aggregate, (c)
sales or other dispositions of assets which are not in the ordinary course of
business or leases of real property or personal property (under which a Credit
Party is lessor), in any such case, which have a Fair Market Value less than
Cdn.$2,000,000 for any transaction and less than Cdn.$2,000,000 for all such
transactions in any Fiscal Year and which are no longer used or useful in the
business, (d) licenses granted to third parties in the ordinary course of
business, (e) property sold to any other Credit Party, and (f) any other
disposition consented to by the Required Lenders. In the case of an
expropriation, condemnation, destruction or other loss of any property, any
insurance proceeds or other indemnity received as a result of such event may be
used by the Credit Party within the 90-day period following the receipt of such
insurance proceeds or other indemnity to replace the property so disposed of
and such sale or disposition will not constitute an Asset Disposition.


     “Assignment and Assumption” means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent
is required by Section 9.4), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.


     “Authorization” means, with respect to any Person, any authorization,
order, permit, approval, grant, licence, consent, right, franchise, privilege,
certificate, judgment, writ, injunction, award, determination, direction,
decree, by-law, rule or regulation of any Governmental Authority having
jurisdiction over such Person, whether or not having the force of Law.


 






 


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     “B/A Borrowing” means a Borrowing comprised of one or more Banker’s
Acceptances or, as applicable, B/A Equivalent Loans. For greater certainty,
unless the context requires otherwise, all provisions of this Agreement which
are applicable to Banker’s Acceptances are also applicable, mutatis mutandis,
to B/A Equivalent Loans.


     “B/A Equivalent Loan” is defined in Section 2.7(h).


     “Banker’s Acceptance” and “B/A” mean an instrument denominated in Canadian
Dollars, drawn by the Borrower and accepted by a Lender in accordance with this
Agreement, and includes a depository bill within the meaning of the Depository
Bills and Notes Act (Canada) and a bill of exchange within the meaning of the
Bills of Exchange Act (Canada).


     “Base Rate” means, on any day, the annual rate of interest equal to the
greater of (i) the annual rate of interest announced by the Administrative
Agent and in effect as its base rate at its principal office in Toronto,
Ontario on such day for determining interest rates on U.S. Dollar-denominated
commercial loans made in Canada, and (ii) the Federal Funds Effective Rate plus
0.50%.


     “Base Rate Borrowing” means a Borrowing comprised of one or more Base Rate
Loans.


     “Base Rate Loan” means a Loan denominated in U.S. Dollars which bears
interest at a rate based upon the Base Rate.


     “Borrower” means Microcell Solutions Inc., a CBCA corporation, and its
successors and permitted assigns.


     “Borrowing” means any availment of the Commitments made hereunder, and
includes a rollover or conversion of any outstanding Loan.


     “Business” means, with respect to the Credit Parties, (i) the development,
delivery or distribution in Canada of telecommunications services (including
wireless voice, data or video services), (ii) any business or activity
reasonably related thereto, including any business conducted by the Credit
Parties on the Effective Date, and (iii) the acquisition, holding or
exploitation of any licence relating to the delivery of the services described
in clause (i) of this definition.


     “Business Day” means any day that is not a Saturday, Sunday or other day
on which commercial banks in Toronto, Ontario and Montreal, Quebec are
authorized or required by applicable law to remain closed and, in the case of
any U.S. Dollar-denominated Loan or any Letter of Credit, also a day on which
commercial banks in New York, New York are authorized or required by applicable
law to remain closed and, in the case of any Eurodollar Loan, also a day on
which commercial banks in London, England are authorized or required by
applicable law to remain closed.


     “Canadian Court” means the Superior Court of the Province of Quebec.


 






 


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     “Canadian Dollar” and “Cdn.$” refer to lawful money of Canada.


     “Cdn.$ Loans” means the Loans denominated in Canadian Dollars made
hereunder.


     “Capital Expenditures” means, for any period, all expenditures (whether
paid in cash or accrued as a liability, including the portion of Capital Lease
Obligations originally incurred during such period that are capitalized) during
such period that, in conformity with GAAP, are included in “capital expenditures”, “additions to property, plant or
equipment” or comparable items, but excluding expenditures for the restoration,
repair or replacement of any fixed or capital asset that was destroyed or
damaged, in whole or in part, in an amount not exceeding any insurance proceeds
received in connection with such destruction or damage.


     “Capital Lease Obligations” of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.


     “CBCA” is defined in Introductory Statement C.


     “CCAA” is defined in Introductory Statement C.


     “CDOR Rate” means, on any date, the annual rate of interest which is the
rate based on an average rate applicable to Canadian Dollar banker’s
acceptances for the applicable period appearing on the “Reuters Screen CDOR
Page”, rounded to the nearest 1/100th of 1% (with .005% being rounded up), at
approximately 10:00 a.m., Toronto time, on such date, or if such date is not a
Business Day, then on the immediately preceding Business Day, provided that if
such rate does not appear on the Reuters Screen CDOR Page on such date as
contemplated, then the CDOR Rate on such date shall be calculated as the
arithmetic mean of the rates for the term referred to above applicable to
Canadian Dollar banker’s acceptances quoted by the banks listed in Schedule I
of the Bank Act (Canada) as of 10:00 a.m., Toronto time, on such date or, if
such date is not a Business Day, then on the immediately preceding Business
Day.


     “Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group of Persons,
acting jointly or otherwise in concert, of Equity Securities representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Securities of the Parent, and more than 30% of the issued
and outstanding Equity Securities of the Parent; (b) occupation of a majority
of the seats (other than vacant seats) on the board of directors of the Parent
(as comprised on the Effective Date after giving effect to the Plan of
Arrangement and the Sanction Order) by Persons who were neither (i) nominated
by the board of directors of the Parent nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of the Parent
by any Person or group of Persons acting jointly or otherwise in concert.



 










 



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     “Change in Law” means (i) the adoption of any new Law after the date of
this Agreement, (ii) any change in any existing Law or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender or the Issuing Bank (or, for
purposes of Section 2.9(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law, but in the case
of a request, guideline or directive not having the force of law, being a
request, guideline or directive with which Persons customarily comply) of any
Governmental Authority made or issued after the date of this Agreement.


     “Collateral” means the property which is charged by or hypothecated under
the Security Documents, and includes all property, rights and assets, present
and future, of the Borrower, the Parent and those subsidiaries of the Borrower
or the Parent which have provided or may hereafter provide security to the
Collateral Agent (or to any trustee or “fondé de pouvoir” for or on behalf of
the Collateral Agent and/or the Lenders) to secure the obligations of the
Borrower, the Parent and such subsidiaries under this Agreement and the other
Financing Documents.


     “Collateral Agent” means JPMorgan Chase Bank, Toronto Branch, in its
capacity as collateral agent and fondé de pouvoir for the Lenders hereunder,
and pursuant to the Intercreditor Agreement, or any successor Collateral Agent
appointed pursuant to the Intercreditor Agreement.


     “Collateral and Guarantee Requirement” means the requirement that:



	 	(i)	 	the Collateral Agent (or the Administrative Agent in the case
of a Guarantee) shall have received (i) from each Credit Party, a
counterpart of each of the Security Documents duly executed and
delivered on behalf of such Credit Party, and (ii) in the case of
any Person that becomes a Credit Party after the Effective Date,
either (as applicable) (A) a supplement to each applicable Security
Document, in the form specified therein, duly executed and delivered
on behalf of such Credit Party, and/or (B) additional Security
Documents, in form and substance satisfactory to the Collateral
Agent, duly executed and delivered on behalf of such Credit Party;
	 
	 	(ii)	 	all outstanding Equity Securities of the Borrower, each other
Subsidiary owned by or on behalf of any Credit Party, and each
Unrestricted Subsidiary owned by or on behalf of any Credit Party,
shall have been pledged pursuant to pledge agreements, in form and
substance satisfactory to the Collateral Agent, and the Collateral
Agent shall have received certificates or other instruments
representing all such Equity Securities, together with stock powers
or other instruments of transfer with respect thereto endorsed in
blank;
	 
	 	(iii)	 	each promissory note evidencing any Indebtedness of any
Credit Party or any Unrestricted Subsidiary that is owing to any
other Credit Party shall have been pledged pursuant to pledge
agreements, in form and substance satisfactory to the



 






 




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	 	 	 	Collateral Agent, and the Collateral Agent shall have received all
such promissory notes, together with instruments of transfer with
respect thereto endorsed in blank;
	 
	 	(iv)	 	all documents and instruments, including all PPSA financing
statements or other appropriate filings, required by Law or
reasonably requested by the Collateral Agent to be filed, registered
or recorded to create (or continue the creation of) the Liens
intended to be created by the Security Documents and perfect or
render opposable against third parties (or continue to perfect or
render opposable against third parties) such Liens to the extent
required by, and with the priority required by, the Security
Documents, shall have been filed, registered or recorded or
delivered to the Collateral Agent for filing, registration or
recording;
	 
	 	(v)	 	the Collateral Agent shall have received (i) counterparts of
a Mortgage with respect to each Mortgaged Property, duly executed
and delivered by the owner of such Mortgaged Property, and (ii) such
legal opinions and other documents as the Administrative Agent or
the Required Lenders may reasonably request with respect to any such
Mortgage or Mortgaged Property; and
	 
	 	(vi)	 	each Credit Party shall have obtained all material consents
and approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder.



     “Commitment” means, with respect to each Lender, the commitment of such
Lender to make Loans hereunder, as such commitment may be reduced from time to
time pursuant to Section 2.6, as such commitment may be increased from time to
time pursuant to Section 2.17, and as such commitment may be reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.4. The initial amount of each Lender’s Commitment is set
forth on Schedule A, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment, as applicable. The initial aggregate
amount of Commitments is Cdn.$25,000,000.


     “Contract Period” means the term of any B/A Borrowing selected by the
Borrower in accordance with Section 2.2(b)(iv) commencing on the date of such
B/A Borrowing and expiring on a Business Day which shall be either one month,
two months, three months or, if available, as determined by the Administrative
Agent in good faith, six months thereafter (or such other terms as may be
requested by the Borrower and approved unanimously by the Lenders), provided
that (i) subject to subparagraph (ii) below, each such period shall be subject
to such extensions or reductions as may be determined by the Administrative
Agent to ensure that each Contract Period will expire on a Business Day, and
(ii) no Contract Period shall extend beyond the Maturity Date.


     “Control” means, in respect of a particular Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person,


 






 



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 whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings correlative thereto.


     “Credit Party” means the Parent, the Borrower, the Pre-Filing Parent, each
of the Subsidiaries and any other Person which is a party to a Financing
Document (other than the Administrative Agent, the Collateral Agent and the
Lenders and their respective successors and assigns), but, for greater
certainty, does not include any Unrestricted Subsidiary.


     “CRTC” means the Canadian Radio-television and Telecommunications
Commission.


     “Currency Due” is defined in Section 2.13.


     “Default” means any event or condition which constitutes an Event of
Default or which, upon notice, lapse of time or both, would, unless cured or
waived, become an Event of Default.


     “Discount Proceeds” means, for any B/A (or, as applicable, any B/A
Equivalent Loan), an amount (rounded to the nearest whole cent, and with
one-half of one cent being rounded up) calculated on the first day of the
applicable Contract Period by multiplying:



	 	(i)	 	the face amount of the B/A (or, as applicable, the
undiscounted amount of the B/A Equivalent Loan); by
	 
	 	(ii)	 	the quotient of one divided by the sum of one plus the
product of




	 	 	 	 	 
	 	 	
(A)
	 	the Discount Rate (expressed as a decimal)
applicable to such B/A (or, as applicable, such B/A Equivalent
Loan), multiplied by
	 	 	 	 	 
	 	 	
(B)
	 	a fraction, the numerator of which is the
Contract Period of the B/A (or, as applicable, the B/A
Equivalent Loan) and the denominator of which is 365,




	 	 	 	with such quotient being rounded up or down to the nearest fifth
decimal place, and with .000005 being rounded up.



     “Discount Rate” means (i) with respect to any Lender which is a Schedule I
chartered bank under the Bank Act (Canada), as applicable to a B/A being
accepted (or, as applicable, a B/A Equivalent Loan being made) by such Lender
on any day, the CDOR Rate on such day; and (ii) with respect to any Lender
which is not a Schedule I chartered bank under the Bank Act (Canada), as
applicable to a B/A being accepted (or, as applicable, a B/A Equivalent Loan
being made) by such Lender on any day, the lesser of (a) the CDOR Rate on such
day, plus 0.10%, and (b) the percentage discount rate quoted by such Lender as
the percentage discount rate at which such Lender would, in accordance with its
normal practices, at or about 10:00 a.m., Toronto time, on such date, be
prepared to purchase banker’s acceptances having a face amount and term
comparable to the face amount and term of such B/A or B/A Equivalent Loan.


 






 


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     “EBITDA” means operating income (loss) excluding restructuring charges,
impairment of intangible assets, depreciation and amortization, all as
calculated in accordance with GAAP.


     “Effective Date” means the “Effective Date” as defined in the Plan of
Arrangement.


     “Environmental Laws” means all federal, provincial, local or foreign laws,
rules, regulations, codes, ordinances, orders, decrees, judgements,
injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the generation, use,
handling, collection, treatment, storage, transportation, recovery, recycling,
release, threatened release or disposal of any Hazardous Material, or to health
and safety matters.


     “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, collection, treatment, storage,
transportation, recovery, recycling or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment, or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.


     “Equity Securities” means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and non-voting) of, such Person’s capital, whether
outstanding on the date hereof or issued after the date hereof, including any
interest in a partnership, limited partnership or other similar Person and any
beneficial interest in a trust, and any and all rights, warrants, options or
other rights exchangeable for or convertible into any of the foregoing.


     “Eurodollar Borrowing” means a Borrowing comprised of one or more
Eurodollar Loans.


     “Eurodollar Loan” means a Loan denominated in U.S. Dollars which bears
interest at a rate based upon the Eurodollar Rate.


     “Eurodollar Rate” means, with respect to any Eurodollar Loan for any
Interest Period, the rate for U.S. Dollar borrowings appearing on Page LIBOR01
of the Reuters Service (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to U.S. Dollar deposits in
the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for U.S. Dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the “Eurodollar Rate” with respect to such Eurodollar Loan for such Interest
Period shall be the rate at which U.S. Dollar deposits of U.S.$5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately


 






 


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 available funds in the London interbank market at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period.


     “Events of Default” has the meaning specified in Section 7.1.


     “Excluded Taxes” means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, income or franchise Taxes imposed on (or
measured by) its taxable income or capital Taxes imposed on (or measured by)
its taxable capital, in each case by Canada, or by the jurisdiction under the
Laws of which such recipient is organized or in which its principal office is
located or Canadian federal withholding tax imposed under the Income Tax Act
solely by reason of a Lender not dealing at arm’s length with the Borrower
within the meaning of the Income Tax Act other than solely by reason of the
interest of such Lender in the rights and securities of the Borrower and the
Guarantors acquired by such Lender pursuant to the Plan of Arrangement.


     “Fair Market Value” means (a) with respect to any asset or group of assets
(other than a marketable security) at any date, the value of the consideration
obtainable in a sale of such asset at such date assuming a sale by a willing
seller to a willing purchaser dealing at arm’s length and arranged in an
orderly manner over a reasonable period of time having regard to the nature and
characteristics of such asset, or, if such asset shall have been the subject of
a relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal, and (b) with respect to any
marketable security at any date, the closing sale price of such marketable
security on the Business Day next preceding such date, or, if there is no such
closing sale price of such marketable security, the final price for the
purchase of such marketable security at face value quoted on such Business Day
by a financial institution of recognized standing selected by the
Administrative Agent which regularly deals in securities of such type.


     “Federal Funds Effective Rate” means, for any day, the per annum rate
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System of the United States of
America arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Board of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by JPMorgan Chase Bank in New York City from three
Federal funds brokers of recognized standing selected by it.


     “Federal Reserve Board” means the Board of Governors of the Federal
Reserve System of the United States of America.


     “Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower or the Parent.


     “Financing Documents” means this Agreement, the Security Documents, the
Mortgages, the Intercreditor Agreement and the Notices of
Borrowing/Conversion/Continuation, together


 






 


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 with any other document, instrument or agreement (other than
participation, agency or similar agreements among the Lenders or between any
Lender and any other bank or creditor with respect to any Indebtedness or
obligations of the Borrower or any Subsidiary (as applicable) hereunder or
thereunder) now or hereafter entered into in connection with this Agreement, as
such documents, instruments or agreements may be amended, modified or
supplemented from time to time.


     “First Notes” means the first subordinated convertible 9% notes issuable
by the Parent pursuant to a certain First Unit Indenture dated May 1, 2003
between Computershare Trust Company of Canada and the Parent.


     “First Preferred Shares” means first preferred shares in the capital of
the Parent having the terms and conditions contemplated in the Parent Articles
of Incorporation.


     “Fiscal Quarter” means any fiscal quarter of the Borrower.


     “Fiscal Year” means any fiscal year of the Borrower.


     “Foreign Lender” means any Lender that is a non-resident of Canada for
Canadian tax purposes and not an “authorized foreign bank” under Section 2 of
the Bank Act (Canada).


     “FPNV Shares” means the first preferred non-voting shares in the capital
of the Parent.


     “FPV Shares” means the first preferred voting shares in the capital of the
Parent


     “GAAP” means generally accepted accounting principles in Canada as in
effect from time to time.


     “Governmental Authority” means the Government of Canada, any other nation
or any political subdivision thereof, whether provincial, state, territorial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank, fiscal or monetary authority or other authority regulating
financial institutions, and any other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government, including the Basel Committee on Banking Supervision
of the Bank for International Settlements.


     “Guarantee” of or by any Person (in this definition, the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (in this definition, the “primary credit party”) in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof (whether in the form of a loan, advance, stock
purchase, capital contribution or otherwise), (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness


 






 



- 12 - 


 or other obligation of the payment thereof, (c) to maintain working
capital, equity capital solvency, or any other balance sheet, income statement
or other financial statement condition or liquidity of the primary credit party
so as to enable the primary credit party to pay such Indebtedness or other
obligation, or (d) as an account party in respect of any letter of credit or
letter of guarantee issued to support such Indebtedness or other obligation.


     “Hazardous Materials” means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organism, ray, odour,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law, or (b) is,
or is deemed to be, alone or in any combination, hazardous, hazardous waste,
toxic, a pollutant, a deleterious substance, a contaminant or a source of
pollution or contamination under any Environmental Law, including, asbestos,
petroleum and polychlorinated biphenyls, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.


     “Income Tax Act” means the Income Tax Act (Canada), as amended from time
to time.


     “Indebtedness” of any Person includes, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guarantee, (j) all obligations,
contingent or otherwise, of such Person in respect of banker’s acceptances, and
(k) the net amount of obligations of such Person (determined on a
marked-to-market basis) under Swap Agreements. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership
in which such Person is a general or limited partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. For greater
certainty, “Indebtedness” does not include short-term trade debt incurred in
the ordinary course of business.


     “Indemnified Taxes” means all Taxes other than Excluded Taxes.


     “Indemnitee” has the meaning specified in Section 9.3(b).


 






 


- 13 - 


     “Information Circular” means the Information Circular and Proxy Statement
dated February 17, 2003 issued by the Pre-Filing Parent, Pre-Filing Borrowers
and certain of their subsidiaries in connection with the Plan of Arrangement.


     “Intercreditor Agreement” means an Intercreditor and Collateral Agency
Agreement substantially in the form attached as Exhibit B, as such agreement
may be amended, supplemented or otherwise modified or restated from time to
time.


     “Interest Payment Date” means, (a) in the case of any Loan other than a
Eurodollar Loan, a B/A or a B/A Equivalent Loan, the first Business Day of each
month, and (b) in the case of a Eurodollar Loan, the last day of each Interest
Period relating to such Eurodollar Loan, provided that if an Interest Period
for any Eurodollar Loan is of a duration exceeding 90 days, then “Interest
Payment Date” shall also include each date which occurs at each 90-day interval
during such Interest Period.


     “Interest Period” means, with respect to a Eurodollar Loan, the period
commencing on the first day of such Loan and ending on the numerically
corresponding day in the calendar month that is 30, 60, 90 or 180 days
thereafter, as the Borrower may elect; provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the immediately succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (ii) any Interest Period
pertaining to a Eurodollar Loan that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period, (iii) no
Interest Period shall extend beyond any date that any principal payment or
prepayment is scheduled to be due unless the aggregate principal amount of
Prime Rate Loans, Base Rate Loans, B/As, B/A Equivalent Loans and Eurodollar
Loans which have Interest Periods or Contract Periods which will expire on or
before such date, less the aggregate amount of any other principal payments or
prepayments due during such Interest Period, is equal to or in excess of the
amount of such principal payment or prepayment, and (iv) no Interest Period
shall extend beyond the Maturity Date.


     “Investment” means, as applied to any Person (the “investor”), any direct
or indirect purchase or other acquisition by the investor of, or a beneficial
interest in, Equity Securities of any other Person, including any exchange of
Equity Securities for Indebtedness, or any direct or indirect loan, advance
(other than advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or
capital contribution by the investor to any other Person, including all
Indebtedness and accounts receivable owing to the investor from such other
Person that did not arise from sales or services rendered to such other Person
in the ordinary course of the investor’s business, or any direct or indirect
purchase or other acquisition of bonds, notes, debentures or other debt
securities of, any other Person. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment minus any amounts


 






 


- 14 - 




 (a) realized upon the disposition of assets comprising an Investment
(including the value of any liabilities assumed by any Person other than the
Credit Parties in connection with such disposition), (b) constituting
repayments of Investments that are loans or advances or (c) constituting cash
returns of principal or capital thereon (including any dividend, redemption or
repurchase of equity that is accounted for, in accordance with GAAP, as a
return of principal or capital).


     “Issuing Bank” means JPMorgan Chase Bank, Toronto Branch, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.15(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.


     “Judgment Currency” is defined in Section 2.13.


     “Laws” means all federal, provincial, municipal, foreign and international
statutes, acts, codes, ordinances, decrees, treaties, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, orders, decisions, rulings or awards or
any provisions of the foregoing, including general principles of common and
civil law and equity, and all policies, practices and guidelines of any
Governmental Authority binding on or affecting the Person referred to in the
context in which such word is used (including, in the case of tax matters, any
accepted practice or application or official interpretation of any relevant
taxation authority); and “Law” means any one or more of the foregoing.


     “LC Disbursement” means a payment made by the Issuing Bank pursuant to a
Letter of Credit.


     “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Borrower at such time. The LC Exposure of any Lender at
any time shall be its Applicable Percentage of the total Commitments at such
time.


     “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate
of such Lender, or (ii) any Person that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender, and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.


     “Lenders” means the Persons listed as lenders on Schedule A and any other
Person that shall have become a party hereto pursuant to Section 2.17 or
pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption.


 






 


- 15 - 


     “Letter of Credit” means any Standby Letter of Credit issued pursuant to
this Agreement.


     “Lien” means, (a) with respect to any asset, any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge, security interest, royalty
interest, adverse claim, defect of title or right of set off in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease, title retention agreement or consignment agreement
(or any financing lease having substantially the same economic effect as any of
the foregoing) relating to any asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities, (d) any netting arrangement, defeasance arrangement or reciprocal
fee arrangement, and (e) any other arrangement having the effect of providing
security.


     “Loan” is defined in Section 2.1.


     “Material Adverse Change” means any event, development or circumstance
that has had or could reasonably be expected to have a Material Adverse Effect.


     “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its subsidiaries taken as a whole, which affect the ability of the
Borrower to timely pay any amounts owing under the Credit Agreement or fulfil
any other covenant or obligation of a material nature arising under the
Financing Documents, or (b) the validity or enforceability of any of the
Financing Documents or the rights and remedies of the Administrative Agent and
the Lenders thereunder.


     “Material Contract” means any contract, licence or agreement (i) to which
any Credit Party is a party, (ii) which is material to, or necessary in, the
operation of the business of the Credit Parties, and (iii) which the Credit
Parties cannot promptly replace by an alternative and comparable contract with
comparable commercial terms.


     “Material Indebtedness” means Indebtedness of any one or more of the
Credit Parties, other than Indebtedness hereunder, the aggregate principal
amount of which exceeds Cdn.$5,000,000.


     “Maturity Date” means April 30, 2006.


     “Minimum Denomination” is defined in Section 2.1.


     “Moody’s” means Moody’s Investors Service, Inc.


     “Mortgage” means a mortgage, debenture, deed of trust, hypothec,
assignment of leases and rents, leasehold mortgage or other security document
granting a Lien on any Mortgaged Property to secure the Obligations. Each
Mortgage shall be satisfactory in form and substance to the Collateral Agent.


     “Mortgaged Property” means, initially, each parcel of real property and
the improvements thereto owned by a Credit Party and identified as a Mortgaged
Property on


 






 


- 16 - 




 Schedule B, and includes each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12.


     “Notes” means the First Notes and the Second Notes.


     “Notice of Borrowing/Continuation/Conversion” means a request by the
Borrower to make a Borrowing, or to convert or continue a Loan in accordance
with Section 2.2(a) or 2.2(d), as applicable, in the form of the notice set
forth in Exhibit “C”.


     “Parent” means Microcell Telecommunications Inc. (incorporated on April
28, 2003, being New Microcell for purposes of the Plan of Arrangement), a CBCA
corporation, and its successors and permitted assigns.


     “Parent Articles of Incorporation” means the Articles of Incorporation of
the Parent as in effect on the Effective Date.


     “Participant” has the meaning set forth in Section 9.4 (d).


     “Payment Office” means the Administrative Agent’s office located at Suite
1800, South Tower, Royal Bank Plaza, Toronto, Ontario, Attention: Corporate
Banking Officers, (or such other office or individual as the Administrative
Agent may hereafter designate in writing to the other parties hereto).


     “PCS Network” means the digital mobile PCS network owned and operated by
the Borrower.


     “Pension Plan” means any pension benefit plan in respect of which any
Credit Party makes or has made contributions in respect of its employees.


     “Perfection Certificate” means a certificate in the form of Exhibit A to
the general security agreements provided by the Credit Parties pursuant to
Section 4.1(r)(ii), or in any other form approved by the Collateral Agent.


     “Permitted Additional Exit Facility Debt” means secured Indebtedness, in
an aggregate principal amount not exceeding an amount equal to Cdn.$75,000,000
less the principal amount of the Commitments hereunder on the Effective Date,
incurred by the Borrower at any time after the Effective Date, by way of an
increase in the Commitments hereunder.


     “Permitted Investments” means:



	 	(i)	 	direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the Government
of Canada or of any Canadian province (or by any agency thereof to
the extent such obligations are backed by the full faith and credit
of the Government of Canada or of any Canadian province), in each
case maturing within one year from the date of acquisition thereof;



 






 


- 17 - 





	 	(ii)	 	direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the Government
of the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of
the Government of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
	 
	 	(iii)	 	investments in commercial paper maturing within 365 days
from the date of acquisition thereof and having, at such date of
acquisition, a rating from Dominion Bond Rating Service of R-1 (Low)
or better, from Moody’s of P-1 or better, or from Standard and
Poor’s Corporation of A-1 or better;
	 
	 	(iv)	 	investments in certificates of deposit, banker’s acceptances
and time deposits maturing within 270 days from the date of
acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any Lender, any
Schedule I chartered bank under the Bank Act (Canada), any domestic
office of any chartered bank organized under the laws of Canada
which has a combined capital surplus and undivided profits of not
less than Cdn.$500,000,000 or by any Affiliate of any such chartered
bank provided that the obligations of such Affiliate are
unconditionally guaranteed by such chartered bank or any financial
institution subject to regulation by the Federal Reserve Board which
has a combined capital surplus and undivided profits of not less
than U.S.$500,000,000 or by any Affiliate of any such financial
institution provided that the obligations of such Affiliate are
unconditionally guaranteed by such financial institution;
	 
	 	(v)	 	fully collateralized repurchase agreements with a term of not
more than 270 days for securities described in clauses (i), (ii) and
(iii) above and (vi) below (but without regard to the maturity dates
described therein) and entered into with a financial institution
satisfying the criteria described in clause (iv) above; provided
that any repurchase agreement relating to securities with a maturity
date of more than 270 days includes a “mark to market” provision
which is satisfactory to the Administrative Agent; and
	 
	 	(vi)	 	marketable and freely-tradeable securities evidencing direct
obligations of corporations, hospitals, municipal boards or school
boards having, at the date of acquisition, a rating from Dominion
Bond Rating Service of A or better, from Moody’s of A-2 or better,
or from Standard and Poor’s Corporation of A or better, in each case
maturing within 270 days from the date of acquisition thereof.



     “Permitted Liens” means:



	 	(i)	 	Liens in favour of the Tranche B Lenders (or an agent,
trustee or “fondé de pouvoir” on their behalf) pursuant to the
Tranche B Credit Agreement, and Liens in favour of the Tranche C
Lenders (or an agent, trustee or “fondé de pouvoir” on their behalf)
pursuant to the Tranche C Credit Agreement;



 






 


- 18 - 






	 	(ii)	 	Liens in favour of the Lenders (or an agent, trustee or
“fondé de pouvoir” on their behalf) for the obligations of the
Borrower and other Credit Parties under or pursuant to this
Agreement and the other Financing Documents, and Liens granted
pursuant to the Pre-Filing Credit Agreement;
	 
	 	(iii)	 	Liens granted by a Credit Party in favour of another Credit
Party in order to secure any of its Indebtedness to the other Credit
Party, provided that such Liens are subject to assignment, payment
subordination and Lien subordination arrangements satisfactory to
the Administrative Agent;
	 
	 	(iv)	 	Purchase Money Liens and Liens securing Capital Lease
Obligations securing Indebtedness to the extent permitted by Section
6.1(g);
	 
	 	(v)	 	Liens imposed by any Governmental Authority for Taxes not yet
due and delinquent or which are being contested in good faith in
accordance with Section 5.3, and, during such period during which
such Liens are being so contested, such Liens shall not be executed
on any of the assets of the Credit Parties;
	 
	 	(vi)	 	carrier’s, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, construction and other like Liens arising by operation
of Law, arising in the ordinary course of business, which are not
overdue for a period of more than 30 days or which are being
contested in good faith and by appropriate proceedings, and, during
such period during which such Liens are being so contested, such
Liens shall not be executed on any of the assets of the Credit
Parties, provided that the Credit Parties shall have set aside on
its books reserves deemed adequate therefor and not resulting in
qualification by auditors;
	 
	 	(vii)	 	statutory Liens incurred or pledges or deposits made under
worker’s compensation, unemployment insurance and other social
security legislation;
	 
	 	(viii)	 	deposits to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature (other than
for borrowed money) incurred in the ordinary course of business, and
Liens in respect of cash collateral to secure reimbursement
obligations in respect of letters of credit (other than Letters of
Credit), provided that, in each such case, such deposits or Liens
existed on the Effective Date (and have not been extended or renewed
after the Effective Date) and the amount of all such deposits and
cash collateral shall not exceed Cdn.$4,500,000 in the aggregate at
any time;
	 
	 	(ix)	 	servitudes, easements, rights-of-way, restrictions and other
similar encumbrances on real property imposed by Law or incurred in
the ordinary course of business and encumbrances consisting of
zoning or building restrictions, easements, licenses, restrictions
on the use of property or minor imperfections in title thereto
which, in the aggregate, are not material, and which do not in any
case materially



 






 


- 19 - 






	 	 	 	detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Credit Parties;
	 
	 	(x)	 	Liens of or resulting from any judgement or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Credit Parties shall at any time
in good faith be prosecuting an appeal or proceeding for review and
in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured;
	 
	 	(xi)	 	undetermined or inchoate Liens and charges arising or
potentially arising under statutory provisions which have not at the
time been filed or registered in accordance with applicable Law or
of which written notice has not been duly given in accordance with
applicable Law or which although filed or registered, relate to
obligations not due or delinquent;
	 
	 	(xii)	 	the rights reserved to or vested in Governmental Authorities
by statutory provisions or by the terms of leases, licenses,
franchises, grants or permits, which affect any land, to terminate
the leases, licenses, franchises, grants or permits or to require
annual or other periodic payments as a condition of the continuance
thereof;
	 
	 	(xiii)	 	securities to public utilities or to any municipalities or
Governmental Authorities or other public authority when required by
the utility, municipality or Governmental Authorities or other
public authority in connection with the supply of services or
utilities to the Credit Parties;
	 
	 	(xiv)	 	Liens or covenants restricting or prohibiting access to or
from lands abutting on controlled access highways or covenants
affecting the use to which lands may be put; provided that such
Liens or covenants do not materially and adversely affect the use of
the lands by the Credit Parties;
	 
	 	(xv)	 	Liens consisting of royalties payable with respect to any
asset or property of the Credit Parties existing as of the Effective
Date, provided that the existence of any such Lien on any material
property or asset of the Credit Parties shall have been disclosed in
writing to the Lenders prior to the Effective Date;
	 
	 	(xvi)	 	statutory Liens incurred or pledges or deposits made in
favour of a Governmental Authority to secure the performance of
obligations of the Credit Parties under Environmental Laws to which
any assets of the Credit Parties are subject;
	 
	 	(xvii)	 	a Lien granted by a Credit Party to a landlord to secure the
payment of arrears of rent in respect of leased property in the
Province of Quebec leased from such landlord, provided that such
Lien is limited to the assets located at or about such leased
property; and




 










 



- 20 -



any extension, renewal or replacement of any of the foregoing; provided that
the Liens permitted hereunder shall not be extended to cover any additional
Indebtedness of the Credit Parties or their property (other than a substitution
of like property), except Liens in respect of Purchase Money Liens and Capital
Lease Obligations as permitted by (iv) above.


          “Permitted Subordinated Refinancing Debt” means Indebtedness of the Parent
that is used to refinance, replace, defease or refund, in whole or in part, the
Indebtedness under the Tranche B Credit Agreement, provided that if, after the
incurrence and application of such Indebtedness to refinance, replace, defease
or refund, in whole or in part, the Indebtedness under the Tranche B Credit
Agreement, there will still be Indebtedness outstanding thereunder, then (i)
the principal amount of such Indebtedness will not exceed the principal amount
of the Indebtedness so refinanced, replaced, defeased or refunded, plus any
other amounts required to be paid in connection therewith and the reasonable
and customary fees and expenses incurred in connection therewith, (ii) no
material terms applicable to such Indebtedness (including the covenants and
events of default) will be materially less favourable to the Parent, the
Borrower or the Lenders than the terms that are applicable under the Tranche B
Credit Agreement, (iii) the covenants contained therein will be less
restrictive than the covenants contained in the Tranche B Credit Agreement,
(iv) there will be no principal amortization payments (including any sinking
fund therefor) on such Indebtedness before the date which is six months after
the “Maturity Date” under the Tranche B Credit Agreement, (v) such Indebtedness
will mature at least six months after the “Maturity Date” under the Tranche B
Credit Agreement, (vi) such Indebtedness will be Indebtedness of the Parent
only, and will not be Guaranteed by the Borrower, (vii) such Indebtedness will
be unsecured, (viii) such Indebtedness will accrue interest at a rate
determined in good faith by the board of directors of the Parent to be a market
rate of interest for such Indebtedness at the time of issuance thereof, and
(ix) such Indebtedness will be otherwise on terms and conditions satisfactory
to the “Administrative Agent” under the Tranche B Credit Agreement; provided,
however, that the restrictions in subparagraphs (ii) and (ix) above shall not
apply to pricing of such Indebtedness.



     “Person” includes any natural person, corporation, company, limited
liability company, trust, joint venture, association, incorporated
organization, partnership, Governmental Authority or other entity.


     “Plan of Arrangement” is defined in Introductory Statement C.


     “PPSA” means the Personal Property Security Act (Ontario), as amended from
time to time, or the analogous legislation in any other relevant jurisdiction.


     “Pre-Filing Borrowers” is defined in Introductory Statement A.


     “Pre-Filing Credit Agreement” is defined in Introductory Statement A.


     “Pre-Filing Lenders” is defined in Introductory Statement A.


     “Pre-Filing Loans” is defined in Introductory Statement A.


 






 


- 21 -



     “Pre-Filing Parent” is defined in Introductory Statement A.


     “Prime Rate” means, on any day, the annual rate of interest equal to the
greater of (i) the annual rate of interest announced by the Administrative
Agent and in effect as its prime rate at its principal office in Toronto,
Ontario on such day for determining interest rates on Canadian
Dollar-denominated commercial loans in Canada, and (ii) the annual rate of
interest equal to the sum of (A) the one-month CDOR Rate in effect on such day,
plus (B) 1.00%.


     “Prime Rate Borrowing” means a Borrowing comprised of one or more Prime
Rate Loans.


     “Prime Rate Loan” means a Loan denominated in Canadian Dollars which bears
interest at a rate based upon the Prime Rate.


     “Purchase Money Lien” means a Lien taken or reserved in personal property
to secure payment of all or part of its purchase price, provided that such Lien
(i) secures an amount not exceeding the lesser of the purchase price of such
personal property and the Fair Market Value of such personal property, (ii)
extends only to such personal property and its proceeds, and (iii) is granted
prior to or within 30 days after the purchase of such personal property.


     “Quarterly Date” means the last day of each of March, June, September, and
December in each calendar year.


     “Radiocom Licences” means all Authorizations issued to any Credit Party to
operate wireless PCS communication systems in Canada pursuant to the provisions
of the Radiocommunication Act (Canada).


     “Register” has the meaning set forth in Section 9.4(b).


     “Reimbursement Obligations” means, at any date, the obligations of the
Borrower then outstanding in respect of the Letters of Credit, to reimburse the
Administrative Agent for the account of the Issuing Bank for the amount paid by
the Issuing Bank in respect of any drawings under the Letters of Credit.


     “Related Parties” means, with respect to any Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and of such Person’s Affiliates.


     “Required Lenders” means, at any time, Lenders with Loans representing
more than 50% of the aggregate amount of Loans or, if no Loans are then
outstanding, Lenders having Commitments representing more than 50% of the
aggregate amount of the Commitments.


     “Responsible Officer” means, with respect to any Person (other than a
natural person), the chairman, the president, any vice president, the chief
executive officer or the chief operating officer, and, in respect of financial
or accounting matters, any Financial Officer of such Person;

 






 




- 22 -



unless otherwise specified, all references herein to a Responsible Officer
mean a Responsible Officer of the Borrower.


     “Restricted Payment” shall mean, with respect to any Person, any payment
by such Person (i) of any dividends on any of its Equity Securities, (ii) on
account of, or for the purpose of setting apart any property for a sinking or
other analogous fund for, the purchase, redemption, retirement or other
acquisition of any of its Equity Securities or any warrants, options or rights
to acquire any such shares, or the making by such Person of any other
distribution in respect of any of its Equity Securities, (iii) of any principal
of or interest or premium on, or of any amount in respect of, a sinking or
analogous fund or defeasance fund for any Indebtedness of such Person ranking
in right of payment subordinate to any liability of such Person under the
Financing Documents, (iv) of any principal of or of any amount in respect of a
sinking or analogous fund or defeasance fund for any Indebtedness of such
Person to a shareholder of such Person or to an Affiliate of a shareholder of
such Person, (v) in respect of an Investment (other than a Permitted
Investment), or (vi) of any management, consulting or similar fee or any bonus
payment or comparable payment, or by way of gift or other gratuity, to any
Affiliate of such Person or to any director or officer thereof.


     “Rolling Period” means each Fiscal Quarter taken together with the three
immediately preceding Fiscal Quarters.


     “Sale/Leaseback Transaction” means any arrangement between a Credit Party
and another Person (other than another Credit Party) providing for the leasing
by the Credit Party of property which has been or is to be sold or transferred
by the Credit Party to such other Person.


     “Sanction Order” means the order of the Canadian Court sanctioning the
Plan of Arrangement, dated March 18, 2003, as such order may be amended,
modified or supplemented in accordance with the terms of the Plan of
Arrangement.


     “Second Notes” means the second subordinated convertible 9% notes issuable
by the Parent pursuant to a certain Second Unit Indenture dated May 1, 2003
between Computershare Trust Company of Canada and the Parent.


     “Second Preferred Shares” means the second preferred shares in the capital
of the Parent having the terms and conditions contemplated in the Parent
Articles of Incorporation.


     “Security Documents” means the documents listed in Section 4.1(r).


     “SPNV Shares” means the second preferred non-voting shares in the capital
of the Parent.


     “SPV Shares” means the second preferred voting shares in the capital of
the Parent.


     “Standby Letter of Credit” means a letter of credit that (i) is used in
lieu or in support of performance guarantees or performance, surety or other
similar bonds (but expressly excluding stay and appeal bonds) arising in the
ordinary course of business, (ii) is used in lieu or in support

 






 




- 23 -



of stay or appeal bonds, (iii) supports the payment of insurance premiums
for reasonably necessary casualty insurance carried by the Borrower, or (iv)
supports payment or performance for identified purchases or exchanges of
products in the ordinary course of business.


     “Subscriber” means an end user of the Borrower’s Fido wireless
communication services that has been assigned a mobile identification number by
the Borrower and whose mobile identification number has been activated on the
Borrower’s billing system or platform such that the Borrower can record and
bill the airtime used by that end user. Notwithstanding the foregoing, a
Subscriber does not include (a) any mobile identification numbers activated for
the Borrower’s agents, sales representatives or employees, or for demonstration
purposes or other numbers, which do not generate revenue for the Borrower on
local usage; (b) any end user whose mobile identification number has been
deactivated or should have been deactivated by the Borrower in accordance with
its standard credit policies; or (c) any mobile identification numbers
activated for resellers or wholesalers of the Borrower’s services.


     “subsidiary” means, with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, limited partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, limited
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.


     “Subsidiary” means any subsidiary of the Parent (other than the Borrower
and any Unrestricted Subsidiary).


     “Swap Agreement” means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Credit Parties shall be a Swap Agreement.


     “Taxes” means all taxes, charges, fees, levies, imposts and other
assessments, including all income, sales, use, goods and services, value added,
capital, capital gains, alternative, net worth, transfer, profits, withholding,
payroll, employer health, excise, real property and personal property taxes,
and any other taxes, customs duties, fees, assessments, or similar charges in
the nature of a tax, including Canada Pension Plan and provincial pension plan
contributions, unemployment insurance payments and workers’ compensation
premiums, together with any instalments with respect thereto, and any interest,
fines and penalties with respect thereto,

 






 




- 24 -



imposed by any Governmental Authority (including federal, state,
provincial, municipal and foreign Governmental Authorities), and whether
disputed or not.


     “Tranche B Credit Agreement” means the credit agreement, dated as of the
date hereof, establishing the terms and conditions of the Tranche B Loans, as
such agreement may be amended, supplemented or otherwise modified or restated
from time to time.


     “Tranche B Lenders” means the lenders under the Tranche B Credit
Agreement.


     “Tranche B Loans” means the secured Canadian Dollar and U.S. Dollar
non-revolving loans to the Borrower in the aggregate principal amount of
Cdn.$300,000,000 made by the Tranche B Lenders under the Tranche B Credit
Agreement, as contemplated in Section 7.3(c)(ii) of the Plan of Arrangement.


     “Tranche C Credit Agreement” means the credit agreement, dated as of the
date hereof, establishing the terms and conditions of the Tranche C Loans, as
such agreement may be amended, supplemented or otherwise modified or restated
from time to time.


     “Tranche C Lenders” means the lenders under the Tranche C Credit
Agreement.


     “Tranche C Loans” means the secured non-revolving term loans in the
aggregate principal amount of Cdn.$50,000,000 owing by the Borrower to the
Tranche C Lenders under the Tranche C Credit Agreement, as contemplated in
Section 7.3(c)(ii) of the Plan of Arrangement.


     “Transactions” means the execution, delivery and performance by the
Borrower and the Credit Parties of this Agreement and the other Financing
Documents.


     “Type”, when used in reference to any Loan, refers to whether the rate of
interest on such Loan is determined by reference to the Prime Rate, the Base
Rate, the Discount Rate or the Eurodollar Rate.


     “Unrestricted Subsidiary” means Inukshuk Internet Inc. and Telcom
Investments Inc. (but in the case of Telcom Investments Inc., only for so long
as its sole activity is serving as general partner of GSM Capital Partners),
and their respective successors and permitted assigns.


     “U.S. Dollars” and “U.S.$” refer to lawful money of the United States of
America.


     “U.S.$ Hedges” is defined in Section 2.18.


     “U.S.$ Loans” means the Loans denominated in U.S. Dollars made hereunder.


     “wholly-owned subsidiary” of a Person means any subsidiary of such Person
of which securities (except for directors’ qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership or membership interests are, at
the time any determination is being made, owned, controlled or held

 






 




- 25 -



by such Person or one or more subsidiaries of such Person or by such
Person and one or more subsidiaries of such Person.


1.2      Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. The word
“or” is disjunctive; the word “and” is conjunctive. The word “shall” is
mandatory; the word “may” is permissive. The words “to the knowledge of”
means, when modifying a representation, warranty or other statement of any
Person, that the fact or situation described therein is known by the Person
(or, in the case of a Person other than a natural Person, known by the
Responsible Officer of that Person) making the representation, warranty or
other statement, or with the exercise of reasonable due diligence under the
circumstances (in accordance with the standard of what a reasonable Person in
similar circumstances would have done) would have been known by the Person (or,
in the case of a Person other than a natural Person, would have been known by
such Responsible Officer of that Person). Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any statute or
any section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and permitted assigns, (d) the words “this
Agreement”, “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement (as the same may be amended,
supplemented or otherwise modified or restated from time to time) in its
entirety and not to any particular provision hereof, (e) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, and
(f) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.


1.3      Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time. All calculations for the purposes
of determining compliance with the financial ratios and financial covenants
contained herein shall be made on a basis consistent with GAAP in existence as
at the date of this Agreement and used in the preparation of the financial
statements of the Borrower and the Credit Parties referred to in Section 5.1.
For greater certainty, should the classification given to the First Notes and
Second Notes or the First Units and Second Units (as defined in the Plan of
Arrangement) change under GAAP, such that the Notes or Units would be treated
as debt instead of equity, the parties hereto acknowledge and agree that, for
the purposes of calculating, and compliance with, the financial ratios and
financial covenants set forth hereunder, the classification given to the said
Notes and

 






 



- 26 -



Units as at the date of this Agreement shall be the classification used until
the termination of this Agreement. Any financial ratios required to be
maintained by the Borrower and the Credit Parties pursuant to this Agreement
shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed in this Agreement and rounding the result up or
down to the nearest number (with a round-up if there is no nearest number) to
the number of places by which such ratio is expressed in this Agreement. In
the event of a change in GAAP, the Borrower and the Administrative Agent shall
negotiate in good faith to revise (if appropriate) such ratios and covenants to
reflect GAAP as then in effect, and any new ratio or covenant shall be subject
to approval by the Required Lenders. In the event that such negotiation is
successful, all calculations thereafter made for the purpose of determining
compliance with the financial ratios and financial covenants contained herein
shall be made on a basis consistent with GAAP in existence as at the date of
such revision.


1.4      Time. All time references herein shall, unless otherwise specified, be
references to local time in Toronto, Ontario. Time is of the essence of this
Agreement and the other Financing Documents.


1.5     Permitted Liens. Any reference in any of the Financing Documents to
Permitted Liens is not intended to subordinate or postpone, and shall not be
interpreted as subordinating or postponing, or as any agreement to subordinate
or postpone, any Lien created by any of the Financing Documents to any
Permitted Liens.


1.6      Schedules and Exhibits. The following Schedules and Exhibits are attached
to and form part of this Agreement:


SCHEDULES:




	 	 	 	 	 
	Schedule A	 	
-
	 	Commitments
	 
	Schedule B	 	
-
	 	Disclosed Matters



EXHIBITS:




	 	 	 	 	 
	Exhibit A	 	
-
	 	Form of Assignment and Assumption
	 
	Exhibit B	 	
-
	 	Form of Intercreditor Agreement
	 
	Exhibit C	 	
-
	 	Form of Notice of Borrowing/Continuation/Conversion



ARTICLE 2

LOANS



2.1      Loans. Subject to the terms and conditions herein, each Lender commits to
make loans (each, a “Loan”) to the Borrower from time to time during the period
commencing on the Effective Date and ending on the Maturity Date (each such
commitment, a


 






 




- 27 -



“Commitment”) in an aggregate principal amount equal to the amount set forth beside such
Lender’s name in Schedule A under the heading “Commitment”, provided that any
Loans made by any Lender as requested by the Borrower will not result in (i)
such Lender’s aggregate Loans and LC Exposure hereunder exceeding such Lender’s
Commitment, or (ii) the aggregate Loans and LC Exposure outstanding hereunder
exceeding the aggregate Commitments of all Lenders. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, repay and reborrow Loans, by way of Cdn.$ Loans and/or U.S.$ Loans.
Subject to Section 2.7(h) and Section 2.8, Cdn.$ Loans shall consist entirely
of Prime Rate Loans and B/As (or, as applicable, B/A Equivalent Loans), and
U.S.$ Loans shall consist entirely of Base Rate Loans and Eurodollar Loans, in
each case as the Borrower may request in accordance herewith. Without limiting
any of the foregoing, the Borrower hereby acknowledges and agrees that its
liability in respect of the Loans shall be absolute and unconditional. At the
commencement of each Contract Period for any B/A (or, as applicable, any B/A
Equivalent Loan) or Interest Period for any Eurodollar Loan, such Loan shall be
in an aggregate amount that is an integral multiple of $500,000 (the “Minimum
Denomination”) and not less than $5,000,000, in each case measured in the
currency of such Loan. Cdn.$ Loans and U.S.$ Loans of more than one Type may
be outstanding at the same time; provided that there shall not at any time be
more than a total of 5 B/A Borrowings or 5 Eurodollar Borrowings outstanding.


2.2     Borrowing, Continuation, Conversion and Roll-Over Elections.



	 	(a)	 	Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their
respective Commitments. To request a Borrowing, or to continue or
convert an existing Borrowing (which are also subject to the
requirements in Section 2.2(d) below), the Borrower shall notify the
Administrative Agent of such request by telephone or by written
Notice of Borrowing/Continuation/Conversion substantially in the
form of Exhibit C, (i) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., Toronto time, three Business Days before the
date of the proposed Borrowing, (ii) in the case of a B/A Borrowing,
not later than 11:00 a.m., Toronto time, two Business Days before
the date of the proposed Borrowing, or (iii) in the case of a Prime
Rate Borrowing or a Base Rate Borrowing, not later than 11:00 a.m.,
Toronto time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of a Prime Rate Borrowing
to finance the reimbursement of an LC Disbursement may be given no
later than 10:00 a.m., Toronto time, on the date of the proposed
Borrowing. Each such telephone request or written Notice of
Borrowing/Continuation/Conversion shall be irrevocable, and any
telephone request shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Notice of
Borrowing/Continuation/Conversion in the form of Exhibit C, signed
by the Borrower, by 12:00 noon on the date of such telephone
request. The Administrative Agent and each Lender are entitled to
rely upon and act upon any telephone request or written Notice of
Borrowing/Continuation/Conversion given or purportedly given by the
Borrower, and the Borrower hereby waives the right to dispute the
authenticity and validity



 






 




- 28 -




	 	 	 	of any such transaction once the Administrative Agent or any Lender
has advanced funds, accepted a B/A or made a B/A Equivalent Loan
based upon such telephone request or written Notice of
Borrowing/Continuation/Conversion.
	 
	 	(b)	 	Each telephone request or written Notice of
Borrowing/Continuation/Conversion shall specify the following
information:




	 	 	 
	(i)	 	
the aggregate amount of the requested
Borrowing;
	 
	(ii)	 	
the date of such Borrowing, which shall be a
Business Day;
	 
	(iii)	 	
whether such Borrowing is to be a Prime Rate
Borrowing, a B/A Borrowing, a Base Rate Borrowing or a
Eurodollar Borrowing;
	 
	(iv)	 	
in the case of a Eurodollar Borrowing, the
initial Interest Period to be applicable thereto, which
shall be a period contemplated by the definition of the term
“Interest Period”, and in the case of a B/A Borrowing, the
initial Contract Period to be applicable thereto, which
shall be a period contemplated by the definition of the term
“Contract Period”; and
	 
	(v)	 	
the location and number of the Borrower’s
account to which funds are to be disbursed, which shall
comply with the requirements of Section 5.17.




	 	(c)	 	If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be a Prime Rate Borrowing (if
denominated in Canadian Dollars) or a Base Rate Borrowing (if
denominated in U. S. Dollars). If no currency is specified, the
Borrowing shall be denominated in Canadian Dollars. If no Interest
Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of 30 days’ duration. If no Contract Period is
specified with respect to any requested B/A Borrowing, then the
Borrower shall be deemed to have selected a Contract Period of 30
days’ duration. Promptly following receipt of a telephone request
or a written Notice of Borrowing/Continuation/Conversion, the
Administrative Agent shall advise each Lender of the details thereof
and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
	 
	 	(d)	 	Each Borrowing initially shall be of the Type specified in
the applicable Notice of Borrowing/Continuation/Conversion.
Thereafter, the Borrower may:




	 	 	 
	(i)	 	
elect, as of any Business Day, in the case of
a Prime Rate Borrowing, to convert any Prime Rate Loans (or
any part thereof in an amount not less than Cdn.$5,000,000,
or that is in an integral multiple of the Minimum
Denomination in excess thereof) into another type of
Borrowing;



 






 



- 29 -




	 	 	 
	(ii)	 	
elect, as of the last day of the applicable
Contract Period, to roll over any B/A Borrowings which have
Contract Periods expiring on such day (or any part thereof
in an amount not less than Cdn.$5,000,000, or that is in an
integral multiple of the Minimum Denomination in excess
thereof), or to convert such B/A Borrowing into another type
of Borrowing;
	 
	(iii)	 	
elect, as of any Business Day, in the case
of Base Rate Borrowings, to convert any Base Rate Borrowing
(or any part thereof in an amount not less than
U.S.$5,000,000, or that is in an integral multiple of the
Minimum Denomination in excess thereof) into a another type
of Borrowing; or




	 	 	 
	(iv)	 	
elect, as of the last day of the applicable
Interest Period, to continue any Eurodollar Borrowings which
have Interest Periods expiring on such day (or any part
thereof in an amount not less than U.S.$5,000,000, or that
is in an integral multiple of the Minimum Denomination in
excess thereof), or to convert such Eurodollar Borrowings
into another type of Borrowing;



provided that (i) if at any time the aggregate amount of Eurodollar Loans
with respect to any Interest Period is reduced, by payment, prepayment or
conversion, to less than U.S.$5,000,000, such Eurodollar Loans shall
automatically convert into Base Rate Loans upon the expiration of the
then current Interest Period, and (ii) B/A Borrowings may not be rolled
over if the amount remaining, after partial conversion into Prime Rate
Loans upon the expiration of the applicable Contract Period, is less than
Cdn.$5,000,000, and such amount remaining shall automatically convert
into Prime Rate Loans upon the expiration of such Contract Period ;
provided further that if the notice shall fail to specify the duration of
the Contract Period or Interest Period with respect to any B/A Borrowing
or Eurodollar Loan, such Contract Period or Interest Period, as
applicable, shall be one month. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts
of the Loans, with respect to which the notice was given, held by each
Lender.


 






 


- 30 -



2.3      Interest and Acceptance Fees.



	 	(a)	 	Each Prime Rate Loan shall bear interest (computed in arrears
on the basis of the actual number of days elapsed over a year of 365
days or 366 days, as the case may be) at a rate per annum equal to
the Prime Rate plus the Applicable Margin. Each Base Rate Loan
shall bear interest (computed in arrears on the basis of the actual
number of days elapsed over a year of 365 days or 366 days, as the
case may be) at a rate per annum equal to the Base Rate plus the
Applicable Margin. Each Eurodollar Loan shall bear interest
(computed in arrears on the basis of the actual number of days in
the relevant Interest Period over a year of 360 days) at the
Eurodollar Rate for the Interest Period in effect for such
Eurodollar Loan plus the Applicable Margin.
	 
	 	(b)	 	The Loans comprising each B/A Borrowing shall be subject to
an Acceptance Fee payable on the first day of the Contract Period
applicable thereto.
	 
	 	(c)	 	Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum
equal to 2% plus the rate otherwise applicable to such Loan.
	 
	 	(d)	 	Accrued interest on each Loan (other than B/A Borrowings)
shall be payable in arrears on each Interest Payment Date and, in
the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable
on the date of such repayment or prepayment.
	 
	 	(e)	 	All interest hereunder shall be payable for the actual number
of days elapsed (including the first day but excluding the last
day). The applicable Prime Rate, Base Rate, Eurodollar Rate or
Discount Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.
	 
	 	(f)	 	For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever any interest or any fee to be paid hereunder or
in connection herewith is to be calculated on the basis of a 360-day
year, the yearly rate of interest to which the rate used in such
calculation is equivalent is the rate so used multiplied by the
actual number of days in the calendar year in which the same is to
be ascertained and divided by 360. The rates of interest under this
Agreement are nominal rates, and not effective rates or yields. The
principle of deemed reinvestment of interest does not apply to any
interest calculation under this Agreement.
	 
	 	(g)	 	If any provision of this Agreement would oblige the Borrower
to make any payment of interest or other amount payable to any
Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt




 









 



- 31 -


	 	 	 	by that Lender of “interest” at a “criminal rate” (as such terms
are construed under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed
to have been adjusted with retroactive effect to the maximum amount
or rate of interest, as the case may be, as would not be so
prohibited by Law or so result in a receipt by that Lender of
“interest” at a “criminal rate”, such adjustment to be effected, to
the extent necessary (but only to the extent necessary), as
follows:




	 	 	 
	 	(i)	
first, by reducing the amount or rate of
interest or the amount or rate of any Acceptance Fee
required to be paid to the affected Lender under this
Section 2.3; and
	 
	 	(ii)	
thereafter, by reducing any fees,
commissions, premiums and other amounts required to be
paid to the affected Lender which would constitute
interest for purposes of Section 347 of the Criminal Code
(Canada).



2.4                Repayment of Loans; Fees.



	 	(a)	 	The Borrower hereby unconditionally promises to pay to the
Administrative Agent, for the account of the Lenders, the unpaid
principal amount of all of the Loans on the Maturity Date.
	 
	 	(b)	 	The Borrower shall pay to the Administrative Agent for the
account of and distribution to each Lender in accordance with its
Applicable Percentage a standby fee for the period commencing on the
Effective Date to and including the Maturity Date (or such earlier
date as the Commitments shall have been terminated entirely)
computed at a rate of 1.00% per annum on the average daily excess
amount of the Commitments over the aggregate amount of outstanding
Loans. These standby fees shall be payable in arrears on each
Quarterly Date, commencing on the first Quarterly Date to occur
after the Effective Date, and on the date on which the Commitments
terminate. All standby fees shall be computed on the basis of a
year of 365 or 366 days, as the case may be, and shall be payable
for the actual number of days elapsed (including the first day but
excluding the last day).
	 
	 	(c)	 	The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times
separately agreed upon in writing between the Borrower and the
Administrative Agent.
	 
	 	(d)	 	The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to
its participations in Letters of Credit, which shall accrue at the
rate of 3.50% per annum on the average daily amount of such Lender’s
LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including
the



 






 



- 32 -


	 	 	 	Effective Date to but excluding the later of the date on which such
Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum on
the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing
Bank’s standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees accrued through and
including each Quarterly Date shall be payable on the first
Business Day following each Quarterly Date, commencing on the first
such date to occur after the Effective Date; provided that all such
fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this Section 2.4(d) shall
be payable within 10 days after demand. All participation fees
shall be computed on the basis of a year of 365 days or 366 days,
as the case may be, and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
	 
	 	(e)	 	All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution,
in the case of standby fees and participation fees, to the Lenders.
Fees paid shall not be refundable except in the case of manifest
error in the calculation of any fee payment.



2.5                Evidence of Debt.



	 	(a)	 	Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender
hereunder, including the amounts of principal and interest payable
and paid to such Lender from time to time hereunder.
	 
	 	(b)	 	The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type
thereof and, in the cases of B/A Borrowings and Eurodollar
Borrowings, the relevant Contract Period or Interest Period
applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to each
Lender hereunder, and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and
each Lender’s share thereof.
	 
	 	(c)	 	The entries made in the accounts maintained pursuant to
Sections 2.5(a) and (b) shall be conclusive evidence (absent
manifest error) of the existence and amounts of the obligations
recorded therein; provided that the failure of any Lender or the



 






 



- 33 -


	 	 	 	Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement. In
the event of a conflict between the records maintained by the
Administrative Agent and any Lender, the records maintained by the
Administrative Agent shall govern.
	 
	 	(d)	 	Any Lender may request that Loans (other than B/As) made by
it be evidenced by a promissory note. In such event, the Borrower
shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 9.4) be
represented by one or more promissory notes in such form payable to
the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
	 
	 	(e)	 	If any payment is required to be made on a day which is not a
Business Day, such payment shall be payable on the next Business
Day.



2.6               Prepayments of Loans.



	 	(a)	 	Voluntary Prepayments. The Borrower may, at its option, at
any time and from time to time, prepay the Loans, in whole or in
part, upon giving three Business Days’ prior written notice to the
Administrative Agent; provided, however, that the Borrower may not
prepay any B/A (or, as applicable, any B/A Equivalent Loan) but may
defease any B/A (or, as applicable, any B/A Equivalent Loan) in
accordance with Section 2.7(l). Such notice shall specify the date
and amount of prepayment and whether the prepayment is of Prime Rate
Loans, Base Rate Loans, Eurodollar Loans or any combination thereof,
and, in each case if a combination thereof, the principal amount
allocable to each. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender of the contents thereof and
of such Lender’s Applicable Percentage of such prepayment. If any
such notice is given, the amount specified in such notice shall be
due and payable on the date specified therein, together with any
amounts payable pursuant to Section 2.10 and accrued interest to
such date on the amount prepaid in accordance with Section 2.3.
Each voluntary prepayment of any Cdn.$ Loan shall be in a minimum
principal amount of Cdn.$1,000,000 and in an integral multiple of
Cdn.$100,000, and each voluntary prepayment of any U.S.$ Loan shall
be in a minimum principal amount of U.S.$1,000,000 and in an
integral multiple of U.S.$100,000. In addition, the Borrower may,
at its option, at any time and from time to time, cancel
permanently, in whole or in part, any unused portion of the
Commitments, upon giving three Business Days’ prior written notice
to the Administrative Agent.



 






 



- 34 -


	 	(b)	 	Notice by Borrower. Each notice provided by the Borrower
hereunder in respect of any payment hereunder shall be irrevocable
and shall specify the payment date and the principal amount of each
Loan or portion thereof to be prepaid.
	 
	 	(c)	 	Notice by Administrative Agent. Upon receipt of a notice of
payment pursuant to this Section 2.6, the Administrative Agent shall
promptly notify each affected party of the contents thereof and of
such party’s rateable share of such payment.



2.7                Banker’s Acceptances.



	 	(a)	 	Subject to the terms and conditions of this Agreement, the
Borrower may request a B/A Borrowing by presenting drafts for
acceptance and purchase as B/As by the Lenders.
	 
	 	(b)	 	No Contract Period with respect to a B/A Borrowing shall
extend beyond the Maturity Date.
	 
	 	(c)	 	To facilitate the availment of B/A Borrowings, the Borrower
hereby appoints each Lender as its attorney to sign and endorse on
its behalf (in accordance with a Notice of
Borrowing/Continuation/Conversion relating to a B/A Borrowing), in
handwriting or by facsimile or mechanical signature as and when
deemed necessary by such Lender, blank forms of B/As in the form
requested by such Lender. In this respect, it is each Lender’s
responsibility to maintain an adequate supply of blank forms of B/As
for acceptance under this Agreement. The Borrower recognizes and
agrees that all B/As signed and/or endorsed by a Lender on behalf of
the Borrower shall bind the Borrower as fully and effectually as if
signed in the handwriting of and duly issued by the proper signing
officers of the Borrower. Each Lender is hereby authorized (in
accordance with a Notice of Borrowing/Continuation/Conversion
relating to a B/A Borrowing) to issue such B/As endorsed in blank in
such face amounts as may be determined by such Lender; provided that
the aggregate amount thereof is equal to the aggregate amount of
B/As required to be accepted and purchased by such Lender. No
Lender shall be liable for any damage, loss or other claim arising
by reason of any loss or improper use of any such instrument except
the gross negligence or wilful misconduct of the Lender or its
officers, employees, agents or representatives. Each Lender shall
maintain a record with respect to B/As (i) received by it in blank
hereunder, (ii) voided by it for any reason, (iii) accepted and
purchased by it hereunder, and (iv) cancelled at their respective
maturities. On request by or on behalf of the Borrower, a Lender
shall cancel all forms of B/A which have been pre-signed or
pre-endorsed on behalf of the Borrower and which are held by such
Lender and are not required to be issued in accordance with the
Borrower’s irrevocable notice. Alternatively, the Borrower agrees
that, at the request of the Administrative Agent, the Borrower shall
deliver to the Administrative Agent a “depository note” which
complies with the requirements of the Depository Bills and Notes
Act
(Canada), and consents to the deposit of any such depository note



 






 



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	 	 	 	in the book-based debt clearance system maintained by the Canadian
Depository for Securities.
	 
	 	(d)	 	Drafts of the Borrower to be accepted as B/As hereunder shall
be signed as set forth in this Section 2.7. Notwithstanding that
any person whose signature appears on any B/A may no longer be an
authorized signatory for any Lender or the Borrower at the date of
issuance of a B/A, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in
force at the time of such issuance and any such B/A so signed shall
be binding on the Borrower.
	 
	 	(e)	 	Promptly following receipt of a Notice of
Borrowing/Continuation/Conversion specifying a Borrowing by way of
B/As, the Administrative Agent shall so advise the Lenders and shall
advise each Lender of the aggregate face amount of the B/As to be
accepted by it and the applicable Contract Period (which shall be
identical for all Lenders). The aggregate face amount of the B/As to
be accepted by the Lenders shall be in a minimum aggregate amount of
Cdn.$5,000,000 and shall be a whole multiple of Cdn.$500,000, and
such face amount shall be in the Lenders’ pro rata portions of such
Loan, provided that the Administrative Agent may in its sole
discretion increase or reduce any Lender’s portion of such B/A to
the nearest Cdn.$100,000 without affecting the aggregate Loan
exposure of any Lender.
	 
	 	(f)	 	Upon acceptance of a B/A by a Lender, such Lender shall
purchase, or arrange for the purchase of, each B/A from the Borrower
at the Discount Rate for such Lender applicable to such B/A accepted
by it and provide to the Administrative Agent the Discount Proceeds
for the account of the Borrower. The Acceptance Fee payable by the
Borrower to a Lender under Section 2.3(b) in respect of each B/A
accepted by such Lender shall be set off against the Discount
Proceeds payable by such Lender under this Section 2.7.
	 
	 	(g)	 	Each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all B/As accepted and
purchased by it.
	 
	 	(h)	 	If a Lender is not a chartered
bank under the Bank Act
(Canada) or if a Lender notifies the Administrative Agent in writing
that it is otherwise unable to accept Banker’s Acceptances, such
Lender will, instead of accepting and purchasing Banker’s
Acceptances, make a Loan (a “B/A Equivalent Loan”) to the Borrower
in the amount and for the same term as the draft which such Lender
would otherwise have been required to accept and purchase hereunder.
Each such Lender will provide to the Administrative Agent the
Discount Proceeds of such B/A Equivalent Loan for the account of the
Borrower. Each such B/A Equivalent Loan will bear interest at the
same rate which would result if such Lender had accepted (and been
paid an Acceptance Fee) and purchased (on a discounted basis) a
Banker’s Acceptance for the relevant Contract Period (it being the



 






 



- 36 -


	 	 	 	intention of the parties that each such B/A Equivalent Loan shall
have the same economic consequences for the Lenders and the
Borrower as the Banker’s Acceptance which such B/A Equivalent Loan
replaces). All such interest shall be paid in advance on the date
such B/A Equivalent Loan is made, and will be deducted from the
principal amount of such B/A Equivalent Loan in the same manner in
which the Discount Proceeds of a Banker’s Acceptance would be
deducted from the face amount of the Banker’s Acceptance. Subject
to repayment requirements, on the last day of the relevant Contract
Period for such B/A Equivalent Loan, the Borrower shall be entitled
to convert each such B/A Equivalent Loan into another Type of Loan,
or to roll over each such B/A Equivalent Loan into another B/A
Equivalent Loan, all in accordance with the applicable provisions
of this Agreement.
	 
	 	(i)	 	With respect to each B/A Borrowing, at or before 10:00 a.m.
two Business Days before the last day of the Contract Period of such
B/A (or, as applicable, such B/A Equivalent Loan), the Borrower
shall notify the Administrative Agent by irrevocable telephone
notice, followed by a written Notice of
Borrowing/Continuation/Conversion by 12:00 noon on the same day, if
the Borrower intends to issue B/As or roll over maturing B/A
Equivalent Loans, as applicable, on such last day of the Contract
Period to provide for the payment of such maturing B/A (or, as
applicable, such B/A Equivalent Loan). If the Borrower fails to
notify the Administrative Agent of its intention to issue B/As or
roll over maturing B/As or B/A Equivalent Loans, as applicable, on
such last day of the Contract Period, the Borrower shall provide
payment to the Administrative Agent on behalf of the Lenders of an
amount equal to the aggregate face amount of such B/As (or, as
applicable, such B/A Equivalent Loans) on the last day of the
Contract Period of such B/As or B/A Equivalent Loans. If the
Borrower fails to make such payment, such maturing B/As (or, as
applicable, such B/A Equivalent Loans) shall be deemed to have been
converted on the last day of the Contract Period into a Prime Rate
Loan in an amount equal to the face amount of such B/As or B/A
Equivalent Loans.
	 
	 	(j)	 	The Borrower waives presentment for payment and any other
defence to payment of any amounts due to a Lender in respect of a
B/A accepted and purchased by it pursuant to this Agreement which
might exist solely by reason of such B/A being held, at the maturity
thereof, by such Lender in its own right, and the Borrower agrees
not to claim any days of grace if such Lender, as holder, sues the
Borrower on the B/A for payment of the amount payable by the
Borrower thereunder. On the last day of the Contract Period of a
B/A, or such earlier date as may be required or permitted pursuant
to the provisions of this Agreement, the Borrower shall pay the
Lender that has accepted and purchased such B/A the full face amount
of such B/A and, after such payment, the Borrower shall have no
further liability in respect of such B/A and such Lender shall be
entitled to all benefits of, and be responsible for all payments due
to third parties under, such B/A.



 






 



- 37 -


	 	(k)	 	If a Lender grants a participation in a portion of its rights
under this Agreement to a Participant under Section 9.4(d), then, in
respect of any B/A Borrowing, a portion thereof may, at the option
of such Lender, be by way of Banker’s Acceptances accepted by such
Participant. In such event, the Borrower shall upon request of the
Administrative Agent or the Lender granting the participation
execute and deliver a form of Banker’s Acceptance undertaking in
favour of such Participant, having terms substantially similar to
this Section 2.7, for delivery to such Participant.
	 
	 	(l)	 	Except as required by any Lender upon the occurrence of an
Event of Default, no B/A Borrowing may be repaid by the Borrower
prior to the expiry date of the Contract Period applicable to such
B/A Borrowing; provided, however, that the Borrower may defease any
B/A Borrowing by depositing with the Administrative Agent an amount
that is sufficient to repay such B/A Borrowing on the expiry date of
the Contract Period applicable to such B/A Borrowing.



2.8                Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Loan:



	 	(a)	 	the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
	 
	 	(b)	 	the Administrative Agent is advised by the Required Lenders
that the Eurodollar Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Eurodollar Loans for such Interest Period;



then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Notice of
Borrowing/Continuation/Conversion that requests the conversion of any Loan to,
or continuation of any Loan as, a Eurodollar Loan shall be ineffective, and
(ii) if any Notice of Borrowing/Continuation/Conversion requests a Eurodollar
Loan, such Loan shall be made as a Base Rate Loan.


2.9               Increased Costs; Illegality.



	 	(a)	 	If any Change in Law shall:




	 	 	 
	 	(i)	
impose, modify or deem applicable any
reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, any Lender; or
	 
	 	(ii)	
impose on any Lender, the Issuing Bank or
the London interbank market any other condition affecting
this Agreement (including the imposition



 






 



- 38 -


	 	 	 
	 	 	
on any Lender of, or any change to, any Indemnified Tax or
other charge with respect to its Eurodollar Loans or any
Letter of Credit or participation therein, or its obligation
to make Eurodollar Loans or to issue any Letter of Credit);




and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan or to increase the cost to such Lender
or the Issuing Bank of participating in any Letter of Credit or any Loan or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.



	 	(b)	 	If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect
of reducing the rate of return on such Lender’s or the Issuing
Bank’s capital or on the capital of such Lender’s holding company or
the Issuing Bank’s holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing
Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration
such Lender’s or the Issuing Bank’s policies and the policies of
such Lender’s or the Issuing Bank’s holding company with respect to
capital adequacy and such Lender’s desired return on capital), then
from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts
as will compensate such Lender or the Issuing Bank or such Lender’s
or the Issuing Bank’s holding company for any such reduction
suffered.
	 
	 	(c)	 	A certificate of the Issuing Bank or a Lender setting forth
the amount or amounts necessary to compensate such Lender as
specified in Sections 2.9(a) or (b), together with a brief
description of the Change of Law, shall be delivered to the
Borrower, and shall be conclusive absent manifest error. In
preparing any such certificate, a Lender shall be entitled to use
averages and to make reasonable estimates, and shall not be required
to “match contracts” or to isolate particular transactions. The
Borrower shall pay such Lender the amount shown as due on any such
certificate within 30 days after receipt thereof.
	 
	 	(d)	 	Failure or delay on the part of the Issuing Bank or any
Lender to demand compensation pursuant to this Section 2.9 shall not
constitute a waiver of such Lender’s right to demand such
compensation.
	 
	 	(e)	 	In the event that any Lender shall have determined (which
determination shall be reasonably exercised and shall, absent
manifest error, be final, conclusive and binding upon all parties)
at any time that the making or continuance of any



 






 



- 39 -


	 	 	 	Eurodollar Loan has become unlawful or materially restricted as a
result of compliance by such Lender in good faith with any Change
in Law, or by any applicable guideline or order (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful), then, in any such event, such Lender
shall give prompt notice (by telephone and confirmed in writing) to
the Borrower and to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to
the other Lenders). Upon the giving of the notice to the Borrower
referred to in this Section 2.9(e), the Borrower’s right to request
(by continuation, conversion or otherwise), and such Lender’s
obligation to make, Eurodollar Loans shall be immediately
suspended, and thereafter any requested conversion into, or
continuation of, Eurodollar Loans shall, as to such Lender only, be
deemed to be a request for a Base Rate Loan, and if the affected
Eurodollar Loan or Loans are then outstanding, the Borrower shall
immediately, or if permitted by applicable Law, no later than the
date permitted thereby, upon at least one Business Day prior
written notice to the Administrative Agent and the affected Lender,
convert each such Eurodollar Loan into a Base Rate Loan, provided
that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section
2.9(e).



2.10                Break Funding Payments. In the event of (a) the failure by the Borrower
to borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered by the Borrower pursuant hereto, (b) the payment or conversion
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), or (c) the assignment of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to Section 2.14, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Eurodollar
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Eurodollar Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.10 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 30 days after receipt
thereof.


 






 


- 40 -



2.11               Taxes.



	 	(a)	 	Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes; provided that if the Borrower
shall be required to deduct any Indemnified Taxes from such
payments, then (i) the sum payable shall be increased as necessary
so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11), the
Administrative Agent or relevant Lender or Issuing Bank (as the case
may be) receives an amount equal to the sum it would have received
had no such deduction been made, (ii) the Borrower shall make such
deduction, and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable
Law.
	 
	 	(b)	 	In addition to the payments by the Borrower required by
Section 2.11(a), the Borrower shall pay any and all present or
future stamp or documentary Taxes or any other excise or property
Taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement to the relevant
Governmental Authority in accordance with applicable Law.
	 
	 	(c)	 	The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 30 days after written demand
therefor, for the full amount of any Indemnified Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case
may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this
Section 2.11) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender
or the Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.
	 
	 	(d)	 	As soon as practicable after any payment of Indemnified Taxes
by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the
Administrative Agent.
	 
	 	(e)	 	In the event that the Borrower is required by applicable Law
to deduct any Indemnified Taxes from any payment hereunder, any
Foreign Lender that is entitled to an exemption from or reduction of
withholding Tax under the law of



 






 



- 41 -


	 	 	 	the jurisdiction in which the Borrower is located, or any treaty to
which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), if requested to do so by the Borrower, at
the time or times prescribed by applicable Law, such properly
completed and executed documentation prescribed by applicable Law
or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.



2.12                Payments Generally; Pro Rata Treatment; Sharing of Set-offs.



	 	(a)	 	The Borrower shall make each payment required to be made by
it hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, amounts payable under any of Sections 2.9, 2.10
or 2.11, or otherwise) prior to 12:00 noon, Toronto time, on the
date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to
the Administrative Agent at the Payment Office. The Administrative
Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on
a day that is not a Business Day, the date for payment shall be
extended to the next Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period
of such extension, provided that, in the case of any payment with
respect to a Eurodollar Loan, the date for payment shall be advanced
to the next preceding Business Day if the next succeeding Business
Day is in a subsequent calendar month. All payments under this
Section 2.12 in respect of Eurodollar Loans and Base Rate Loans
shall be made in U.S. Dollars. All other payments under this
Section 2.12 shall be made in Canadian Dollars.
	 
	 	(b)	 	If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of
any amounts payable to the Administrative Agent pursuant to Section
9.3, (ii) second, towards payment of interest and fees then due
hereunder, rateably among the parties entitled thereto in accordance
with the amounts of interest and fees then due to such parties, and
(iii) third, towards payment of unreimbursed LC Disbursements and
principal then due hereunder, rateably among the parties entitled
thereto in accordance with the amounts of principal then due to such
parties.
	 
	 	(c)	 	If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans, and



 






 



- 42 -


	 	 	 	participation in LC Disbursements and accrued interest thereon than
the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans, and participations in LC
Disbursements of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders
rateably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and participations
in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without
interest, and (ii) this Section 2.12(c) shall not apply to any
payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment of or sale of a participation
in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to any Credit Party (as to
which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a
direct creditor of the Borrower in the amount of such
participation.
	 
	 	(d)	 	Unless the Administrative Agent shall have received written
notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or
the Issuing Bank hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if
the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed
to it to but excluding the date of payment to the Administrative
Agent, at the applicable default rate for Prime Rate Loans (if such
amount is denominated in Canadian Dollars) or the applicable default
rate for Base Rate Loans (if such amount is denominated in U.S.
Dollars).
	 
	 	(e)	 	If the Issuing Bank or any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.12(d), then
the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by
the Administrative Agent for the account of the Issuing Bank or such
Lender to satisfy the Issuing Bank or such Lender’s obligations
under such Section 2.12(d) until all such unsatisfied obligations
are fully paid.



 






 



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2.13                Currency Indemnity. If, for the purposes of obtaining judgment in any
court in any jurisdiction with respect to this Agreement or any other Financing
Document, it becomes necessary to convert into the currency of such
jurisdiction (the “Judgment Currency”) any amount due under this Agreement or
under any other Financing Document in any currency other than the Judgment
Currency (the “Currency Due”), then conversion shall be made at the rate of
exchange prevailing on the Business Day before the day on which judgment is
given. For this purpose “rate of exchange” means the rate at which the
Administrative Agent is able, on the relevant date, to purchase the Currency
Due with the Judgment Currency in accordance with its normal practice at its
head office in Toronto, Ontario. In the event that there is a change in the
rate of exchange prevailing between the Business Day before the day on which
the judgment is given and the date of receipt by the Administrative Agent of
the amount due, the Borrower will, on the date of receipt by the Administrative
Agent, pay such additional amounts, if any, or be entitled to receive
reimbursement of such amount, if any, as may be necessary to ensure that the
amount received by the Administrative Agent on such date is the amount in the
Judgment Currency which when converted at the rate of exchange prevailing on
the date of receipt by the Administrative Agent is the amount then due under
this Agreement or such other Financing Document in the Currency Due. If the
amount of the Currency Due which the Administrative Agent is so able to
purchase is less than the amount of the Currency Due originally due to it, the
Borrower shall indemnify and save the Administrative Agent and the Lenders
harmless from and against all loss or damage arising as a result of such
deficiency. This indemnity shall constitute an obligation separate and
independent from the other obligations contained in this Agreement and the
other Financing Documents, shall give rise to a separate and independent cause
of action, shall apply irrespective of any indulgence granted by the
Administrative Agent from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in respect of
an amount due under this Agreement or any other Financing Document or under any
judgment or order.


2.14                Mitigation Obligations; Replacement of Lenders.



	 	(a)	 	If any Lender requests compensation under Section 2.9, or if
the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant
to Section 2.11, then such Lender shall use reasonable efforts to
designate a different lending office for booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.9 or 2.11, as the case may be, in the
future, and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such
designation or assignment.
	 
	 	(b)	 	If any Lender requests compensation under Section 2.9, or if
the Borrower is required to pay any additional amount to any Lender
or any Governmental



 






 



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	 	 	 	Authority for the account of any Lender pursuant to Section 2.11,
then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.4), all its
interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that
(i) the Borrower shall have received the prior written consent of
the Administrative Agent and the Issuing Bank, which consent shall
not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the
case of all other amounts), and (iii) in the case of any such
assignment resulting from a claim for compensation under Section
2.9 or payments required to be made pursuant to Section 2.11, such
assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such
assignment and delegation if an Event of Default has occurred and
is continuing or if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.



2.15                Letters of Credit.



	 	(a)	 	General. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit,
in amount not to exceed $5,000,000 (less the amount of any deposits
and cash collateral provided as permitted under paragraph (viii) of
the definition of Permitted Liens) in the aggregate, as an availment
of the Commitments, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time
to time up to the Maturity Date. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and
conditions of any form of Letter of Credit application or other
agreement submitted by the Borrower to, or entered into by the
Borrower with, the Issuing Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall govern.
	 
	 	(b)	 	Notice of Issuance, Amendment, Renewal, Extension, Certain
Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit),
the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (at least five Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying
the Letter of Credit to be amended, renewed or extended,



 






 




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	 	 	 	the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with
Section 2.15(c)), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also
shall submit a Letter of Credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit, the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension, the aggregate LC Exposure shall
not exceed Cdn.$5,000,000.
	 
	 	(c)	 	Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the date that is five Business
Days prior to the Maturity Date.
	 
	 	(d)	 	Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the
Lenders, the Issuing Bank hereby grants to each Lender, and each
Lender hereby acquires from the Issuing Bank, a participation in
such Letter of Credit equal to such Lender’s Applicable Percentage
of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by the
Issuing Bank and not reimbursed by the Borrower on the date due as
provided in Section 2.15(e), or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.15(d) in respect of
Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
	 
	 	(e)	 	Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent
an amount equal to such LC Disbursement not later than 12:00 noon,
Toronto time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to
10:00 a.m., Toronto time, on such date, or, if such notice has not
been received by the Borrower prior to such time on such date, then
not later than 12:00 noon, Toronto time, on (i) the Business Day
that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., Toronto time, on the day of receipt, or




 









 



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	 		 	(ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior
to such time on the day of receipt; provided that the Borrower may,
subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.2 that such payment be financed with a
Prime Rate Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting Prime Rate Borrowing. If
the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this Section 2.15(e), the
Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to
this Section 2.15(e) to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse
the Issuing Bank for any LC Disbursement (other than the funding of
Prime Rate Borrowings as contemplated above) shall not constitute a
Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
	 
	 	(f)	 	Obligations Absolute. The Borrower’s obligation to reimburse
LC Disbursements as provided in Section 2.15(e) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein or herein, (ii) any
draft or other document presented under a Letter of Credit proving
to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such
Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.15, constitute a
legal or equitable discharge of, or provide a right of set-off
against, the Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any
Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in
the preceding sentence), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit



 






 






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	 	 	 	(including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent
permitted by applicable Law) suffered by the Borrower that are
caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined
by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality
thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse
to accept and make payment upon such documents if such documents
are not in strict compliance with the terms of such Letter of
Credit.
	 
	 	(g)	 	Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The
Issuing Bank shall promptly notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with
respect to any such LC Disbursement.
	 
	 	(h)	 	Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the
date that the Borrower reimburses such LC Disbursement, at the rate
then applicable to Prime Rate Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to Section
2.15(e), then this Section 2.15(h) shall apply. Interest accrued
pursuant to this Section 2.15(h) shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to this Section 2.15(h) to reimburse
the Issuing Bank shall be for the account of such Lender to the
extent of such payment.



 






 






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	 	(i)	 	Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor
Issuing Bank. The Administrative Agent shall notify the Lenders of
any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank.
From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of
the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter, and (ii) references herein to the
term “Issuing Bank” shall be deemed to refer to such successor or to
any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.
	 
	 	(j)	 	Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives
notice from the Administrative Agent or the Required Lenders
demanding the deposit of cash collateral pursuant to this Section
2.15(j), the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and
for the benefit of the Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit
shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in Section 7.1(h), (i) or (j).
Such deposit shall be held by the Administrative Agent as collateral
for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at
such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of
Default, such



 






 






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	 	 	 	amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of
Default have been cured or waived.



2.16     Indemnity for Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Loans, the Administrative
Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for
any other reason, then the Loans or part thereof intended to be satisfied shall
be revived and continued and this Agreement shall continue in full force as if
such payment or proceeds had not been received by the Administrative Agent or
such Lender and the Borrower shall be liable to pay to the Administrative Agent
and the Lenders, and hereby does indemnify the Administrative Agent and the
Lenders and holds the Administrative Agent and the Lenders harmless for the
amount of such payment or proceeds surrendered. The provisions of this Section
2.16 shall be and remain effective notwithstanding any contrary action which
may have been taken by the Administrative Agent or any Lender in reliance upon
such payment or application of proceeds, and any such contrary action so taken
shall be without prejudice to the Administrative Agent’s and the Lenders’
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable.
The provisions of this Section 2.16 shall survive the termination of this
Agreement.


2.17     Increase
in Commitments; Permitted Additional Exit Facility Debt. At any
time after the Effective Date, and provided that no Default or Event of Default
has occurred and is continuing, the Borrower may request that one or more of
the then-existing Lenders or any other Person acceptable to the Administrative
Agent provide to the Borrower Permitted Additional Exit Facility Debt, to be
effected by way of an increase in the Commitments hereunder; provided that the
amount of Permitted Additional Exit Facility Debt shall not exceed
Cdn.$75,000,000, less the principal amount of Commitments existing on the
Effective Date. Notwithstanding anything to the contrary in this Agreement,
the incurrence of Permitted Additional Exit Facility Debt shall not require the
consent of any Lender other than any Lender providing such Permitted Additional
Exit Facility Debt, but no Lender shall have any obligation to participate in
any Permitted Additional Exit Facility Debt unless it agrees to do so in its
sole discretion. Any increase in the Commitments hereunder shall be documented
by way of an amendment to this Agreement in form and substance satisfactory to
the Administrative Agent.


2.18     Hedging
Arrangements. The Borrower may, at its discretion, enter into
Swap Agreements with the Lenders (or their respective Affiliates) solely to
manage currency exposure assumed pursuant to the U.S.$ loans under the Tranche
B Credit Agreement, and not for any other purpose (the “U.S.$ Hedges”). If
established, the U.S.$ Hedges shall have notional amounts not exceeding
Cdn.$100,000,000 at any time (in the aggregate for all such Swap Agreements)
and shall have termination dates not later than six months after the date of
the relevant Swap Agreement. Any obligations of the Borrower under any U.S.$
Hedges may be secured by the security instruments created in favour of the
Lenders, pari passu with the other obligations of the Borrower under this
Agreement. Any credit exposure under the U.S.$ Hedges


 






 


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(as determined by the Administrative Agent, in its sole discretion) shall be
deducted from the amounts otherwise available to be borrowed under the
Commitments. Notwithstanding anything to the contrary in this Agreement, no
Lender (and no Affiliate of any Lender) shall have any obligation to
participate in the U.S.$ Hedges unless it agrees to do so in its sole
discretion.


2.19     Existing
Security. The Borrower and the Parent confirm that, in
accordance with paragraph 27 of the Sanction Order, (a) the Liens granted
pursuant to the Pre-Filing Credit Agreement (the “Existing Security”) shall
remain in place and be reserved pending the execution, delivery and
registration of the Security Documents pursuant to this Agreement and the
delivery of all required consents to such Security Documents, and (b) no steps
to perfect or reperfect (including registration or publication of any
hypothecs) the Existing Security, other than any steps which are required
generally under applicable provincial laws to maintain perfection of security
interests (including registration or publication of any hypothecs), shall be
required to secure the obligations of the Borrower and the Parent hereunder.


ARTICLE 3

REPRESENTATIONS AND WARRANTIES



Each of the Borrower and the Parent represents and warrants to the
Administrative Agent, the Issuing Bank and the Lenders that:


3.1     Organization;
Powers. The Borrower and each other Credit Party is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now and formerly conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.


3.2     Authorization;
Enforceability. The Transactions are within the Borrower’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, shareholder action. This Agreement and the other Financing
Documents have been duly executed and delivered by the Borrower and each other
Credit Party (as applicable) and constitute legal, valid and binding
obligations of the Borrower and each other Credit Party (as applicable),
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganisation, moratorium or other Laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.


3.3     Governmental
Approvals; No Conflicts. The Transactions (a) do not require
any consent or approval of, registration or filing with, or any other action
by, any Governmental Authority, except such as have been obtained or made and
are in full force and effect and except those disclosed in Schedule B, (b) will
not violate any applicable Law or the charter, by-laws or other organizational
documents of the Borrower or any Credit Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any


 






 


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indenture, agreement or other instrument binding upon the Borrower or any
Credit Party or their respective assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any Credit Party, and (d)
will not result in the creation or imposition of any Lien on any asset of the
Borrower or any Credit Party, except for any Lien arising in favour of the
Collateral Agent, for the benefit of the Lenders, under the Financing
Documents.


3.4     Financial
Condition; No Material Adverse Effect. All information
(including the information contained in the Information Circular and all
financial statements) pertaining to the Parent, its Subsidiaries and any
Unrestricted Subsidiary (other than projections) that has been or will be made
available to the Lenders or the Administrative Agent by the Parent or any
representative of the Parent and its Subsidiaries, taken as a whole, is or will
be, when furnished, complete and correct in all material respects and does not
or will not, when furnished, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made. The projections that have been or will be made
available to the Lenders or the Administrative Agent by the Parent or the
Borrower or any representative of the Parent or the Borrower have been or will
be prepared in good faith based upon assumptions that were reasonable when
made.


3.5     Litigation.




	 	(a)	 	There are no actions, suits or proceedings (including any
Tax-related matter) by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any other Credit
Party (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect other than the matters disclosed in
Schedule B, or (ii) that involve this Agreement, any other Financing
Document, or the Transactions.
	 
	 	(b)	 	Except for the matters disclosed in Schedule B and except
with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material
Adverse Effect, neither the Borrower nor any other Credit Party (i)
has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability, or (iv) knows of any basis
for any Environmental Liability.



3.6     Compliance
with Laws and Agreements. Except as set forth in Schedule “B”,
the Borrower and each other Credit Party is in compliance with all Laws
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Neither the Borrower nor any other Credit Party has
violated or failed to obtain any Authorization necessary to the ownership of
any of its


 






 


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property or assets or the conduct of its business, which violation or failure
could reasonably be expected to have (in the event that such a violation or
failure were asserted by any Person through appropriate action) a Material
Adverse Effect.


3.7     Taxes. The Borrower and each other Credit Party has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has
paid or caused to be paid all Taxes required to have been paid by it (including
all instalments with respect to the current period) and has made adequate
provisions for Taxes for the current period, except Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower
or such other Credit Party, as applicable, has set aside on its books adequate
reserves.


3.8     Titles to Real Property. Each Credit Party has indefeasible fee simple
title to its respective owned real properties, and with respect to leased real
properties, indefeasible title to the leasehold estate with respect thereto,
pursuant to valid and enforceable leases, free and clear of all Liens except
Permitted Liens. All real property owned by each Credit Party as at the
Effective Date is described in Schedule B. All real property lease agreements
pursuant to which any Credit Party leases any office space or switch room
premises as at the Effective Date are described in Schedule B.


3.9     Titles
to Personal Property. Each Credit Party has valid indefeasible title
to all of its respective personal property, free and clear of all Liens except
Permitted Liens.


3.10     Pension
Plans. As of the Effective Date, no Credit Party has established or maintains a Pension Plan.


3.11     Disclosure. Each Credit Party has made available to the Lenders all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.


3.12     Defaults.
 Except as set forth in Schedule “B”, no Credit Party is in
default nor has any event or circumstance occurred which, but for the passage
of time or the giving of notice, or both, would constitute a default (in either
case in any respect that would have a Material Adverse Effect) under any loan
or credit agreement, indenture, mortgage, deed of trust, security agreement or
other instrument or agreement evidencing or pertaining to any Indebtedness of
any Credit Party, or under any Material Contract.


3.13     Casualties; Taking of Properties. Since December 31, 2002, neither the
business nor the properties of the Borrower or any other Credit Party have been
affected in a manner that has had, or could reasonably be expected to have, a
Material Adverse Effect as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by any domestic or foreign Governmental Authority, riot, activities
of armed forces, or acts of God or of any public enemy.


 






 


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3.14     Subsidiaries. As of the Effective Date, the Borrower has no subsidiaries
other than those listed in Schedule B. As of the Effective Date, the Parent
has no subsidiaries except the Borrower, the Pre-Filing Parent and the
subsidiaries of the Parent listed in Schedule B.


3.15     Insurance. All policies of fire, liability, workers’ compensation,
casualty, flood, business interruption and other forms of insurance owned or
held by each of the Credit Parties are: sufficient for compliance with all
requirements of applicable Law and of all Material Contracts; are valid,
outstanding and enforceable policies; provide adequate insurance coverage in at
least such amounts and against at least such risks (but including in any event
public liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business for the assets and
operations of each Credit Party; and will not in any way be affected by, or
terminate or lapse by reason of, the Transactions. All such material policies
are in full force and effect, all premiums with respect thereto have been paid
in accordance with their respective terms, and no notice of cancellation or
termination has been received with respect to any such policy. No Credit Party
maintains any self-insurance program or deductible limits with respect to its
assets or operations or material risks with respect thereto in excess of
Cdn.$1,000,000 (or U.S.$1,000,000 in the case of directors and officers
liability coverage). The certificate of insurance delivered to the Lenders
pursuant to Section 4.1(i) contains an accurate and complete description of all
material policies of insurance owned or held by each Credit Party on the
Effective Date.


3.16     Material Contracts. Schedule B sets out each Material Contract in effect
as at the Effective Date. A copy of each such Material Contract (each of which
copies is true and complete except for provisions thereof which by the express
terms thereof may only be disclosed to authorized representatives of the
parties thereto) has been delivered to the Administrative Agent. Each Material
Contract is in full force and effect. No Credit Party is in default under or
in breach of any term or condition of any Material Contract that would have,
either individually or in the aggregate, a Material Adverse Effect, nor is any
Credit Party aware of any default under or breach of any term or condition of
any Material Contract by any other party thereto that would have a Material
Adverse Effect. No Material Contract contains any material provisions which
impose burdensome or onerous obligations on any Credit Party which are
inconsistent with prudent commercial activity by each Credit Party.


3.17     Environmental Matters. Except as disclosed to the Lenders in Schedule B:



	 	(a)	 	Environmental Laws, etc. Neither any property of any Credit
Party nor the operations conducted thereon violate any applicable
order of any court or Governmental Authority or Environmental Laws,
which violation could reasonably be expected to result in remedial
obligations having a Material Adverse Effect, assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
property.



 






 






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	 	(b)	 	Notices, Permits, etc. All notices, permits, licenses or
similar authorizations, if any, required to be obtained or filed by
any Credit Party in connection with the operation or use of any and
all property of any Credit Party, including but not limited to past
or present treatment, transportation, storage, disposal or release
of Hazardous Materials into the environment, have been duly obtained
or filed, except to the extent the failure to obtain or file such
notices, permits, licenses or similar authorizations could not
reasonably be expected to have a Material Adverse Effect, or which
could not reasonably be expected to result in remedial obligations
having a Material Adverse Effect, assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions
and circumstances, if any, pertaining to the relevant property.
	 
	 	(c)	 	Hazardous Substances Carriers. To the knowledge of each of
the Credit Parties, all Hazardous Materials generated at any and all
property of any Credit Party have been treated, transported, stored
and disposed of only in accordance with Environmental Law applicable
to them, except to the extent the failure to have such Hazardous
Materials transported, treated or disposed by such carriers could
not reasonably be expected to have a Material Adverse Effect, and
only at treatment, storage and disposal facilities maintaining valid
permits under applicable Environmental Law, which carriers and
facilities have been and are operating in compliance with such
permits, except to the extent the failure to have such Hazardous
Materials treated, transported, stored or disposed at such
facilities, or the failure of such carriers or facilities to so
operate, could not reasonably be expected to have a Material Adverse
Effect or which could not reasonably be expected to result in
remedial obligations having a Material Adverse Effect, assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the
relevant property.
	 
	 	(d)	 	Hazardous Materials Disposal. Each Credit Party has taken
all reasonable steps necessary to determine and has determined that
no Hazardous Materials have been disposed of or otherwise released
and there has been no threatened release of any Hazardous Materials
on or to any property of any Credit Party other than in compliance
with Environmental Laws, except to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect
or which could not reasonably be expected to result in remedial
obligations having a Material Adverse Effect, assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
property.
	 
	 	(e)	 	No Contingent Liability. The Credit Parties have no material
contingent liability in connection with any release or threatened
release of any Hazardous Materials into the environment other than
such contingent liabilities at any one time and from time to time
which could not reasonably be expected to exceed the



 






 






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	 	 	 	applicable insurance coverage and for which adequate reserves for
the payment thereof as required by GAAP have been provided, or
which could reasonably be expected to result in remedial
obligations having a Material Adverse Effect, assuming disclosure
to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such release or
threatened release.



The representations and warranties in this Section 3.17 do not extend to
transmitter sites or other real property in which any Credit Party has a
leasehold interest, except to the extent that anything referred to in this
Section 3.17 results from the act or omission of a Credit Party.


3.18     Employee Matters. As at the Effective Date, no Credit Party, nor any of
their respective employees, is subject to any collective bargaining agreement.
There are no strikes, slowdowns, work stoppages or controversies pending or, to
the best knowledge of the Borrower, threatened against any Credit Party, or
their respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. As at the
Effective Date, except as set forth in Schedule B, no Credit Party is subject
to an employment contract providing for a fixed term of employment exceeding
one year or providing for special payments on termination of employment
exceeding one year’s salary.


3.19     Fiscal Year. The Fiscal Year of the Borrower ends on December 31 of each
calendar year, and the Borrower’s Fiscal Quarters end on the last day of each
of March, June, September and December of each calendar year.


3.20     Intellectual
Property Rights. Each Credit Party is the registered and
beneficial owner of, with good and marketable title, free of all licences,
franchises and Liens other than Permitted Liens, to, or, alternatively, is a
permitted licencee of, all patents, patent applications, trade marks, trade
mark applications, trade names, service marks, copyrights, industrial designs,
or other rights with respect to the foregoing and other similar property, used
in or necessary for the present and planned future conduct of its business,
without any conflict with the rights of any other Person other than as listed
on Schedule B or other than for such conflicts as would not reasonably be
expected to have a Material Adverse Effect. All material patents, trade marks,
trade names, service marks, copyrights, industrial designs and other similar
rights owned or licenced by any Credit Party, and all rights of any Credit
Party to the use of any patents, trade marks, trade names, service marks,
copyrights, industrial designs or other similar rights, are described in
Schedule B (it being agreed that Schedule B excludes all such agreements which,
if terminated, could be promptly replaced on comparable terms). Except as set
forth in Schedule B, no material claim has been asserted and is pending by any
Person with respect to the use by any Credit Party of any intellectual property
or challenging or questioning the validity, enforceability or effectiveness of
any intellectual property necessary for the conduct of the business of any
Credit Party. Except as disclosed in Schedule B or except as would not
reasonably be expected to have a Material Adverse Effect, (i) each Credit Party
has the exclusive right to use the intellectual property which each Credit
Party owns, and (ii) all applications and registrations for such intellectual
property are current.


 






 



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3.21     Investment and Holding Company Status. No Credit Party is (a) an
“investment company” subject to regulation under the United States Investment
Company Act of 1940 or (b) a “holding company” as defined in, or subject to
regulation under, the United States Public Utility Holding Company Act of 1935.
No Credit Party is subject to the United States Employee Retirement Income
Security Act of 1974, as amended from time to time. No Credit Party is engaged
in the business of extending credit for the purpose of purchasing or carrying
“margin stock”.


3.22     PCS Network Ownership. The Borrower owns or leases all material assets
(and is the holder of all Radiocom Licences) necessary in connection with the
operation of the PCS Network.


3.23     No Indebtedness for Borrowed Money. As at the Effective Date, no Credit
Party has incurred any Indebtedness for borrowed money except Indebtedness in
favour of the Lenders as expressly provided for in this Agreement and
Indebtedness for borrowed money listed in Schedule B.


3.24     Permits, Licences, etc. Each Credit Party possesses all Authorizations as
may be necessary to properly conduct the Business and operate the Borrower’s
PCS Network. All of the material Authorizations as at the Effective Date are
set forth in Schedule B, are all in full force and effect, and each Credit
Party is in compliance therewith. All franchise, licence or other fees and
charges which have become due pursuant to any material Authorization have been
paid by the relevant Credit Party, and each Credit Party has made appropriate
provisions as is required by GAAP for any such fees and charges which have
accrued. The Radiocom Licences are valid and in full force and effect without
conditions except for the conditions contained in or referred to in the
Radiocom Licences. No event has occurred and is continuing which could
reasonably be expected to (i) result in the revocation, termination or adverse
modification of any Radiocom Licence or other material Authorization other than
at the request of the Parent or the Borrower and in respect of Radiocom
Licences which are not material to the Business, or (ii) materially and
adversely affect any right of any Credit Party under any Radiocom Licence or
other material Authorization other than at the request of the Parent or the
Borrower and in respect of Radiocom Licences which are not material to the
Business. No Credit Party has any reason to believe or has any knowledge that
the Radiocom Licences will not be renewed in the ordinary course, other than at
the request of the Parent or the Borrower and in respect of Radiocom Licences
which are not material to the Business.


3.25     Security Interests. Each of the Security Documents creates (or continues
the creation, as the case may be), as security for the obligations purported to
be secured thereby, subject to the provisions hereof and thereof, a legal,
valid and enforceable hypothec and/or security interest in all the Collateral
subject to such Security Document and each such Security Document shall
constitute, to the fullest extent possible under applicable law and upon
completion of all required filings or actions, either (a) a fully published
and/or perfected Lien on, and security interest in, all of the Collateral
subject to such Security Document or (b) a floating charge, fixed charge,
hypothecation or security interest, as specified in the applicable Security
Document, with respect to all of the Collateral subject to such Security
Document, in each case


 






 


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in favour of the Collateral Agent or the “fondé de pouvoir” (person holding an
irrevocable power of attorney) appointed for the benefit of the Lenders), and
subject to no other Liens except Permitted Liens and such additional Liens as
may be expressly permitted under Section 6.2. The pledgor or assignor, as the
case may be, under each Security Document has good title to all Collateral
subject thereto free and clear of all Liens other than Permitted Liens and such
additional Liens as may be expressly permitted under Section 6.2.


3.26     Regulatory Compliance. The Parent, the Borrower and each other Credit
Party are in compliance with the Telecommunications Act (Canada) except where
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect. To the knowledge of the Parent and the Borrower, there is no
investigation, notice of apparent liability, violation, forfeiture or other
order or complaint issued by or before the CRTC or Industry Canada, or of any
other proceedings of or before the CRTC or Industry Canada, affecting any
Credit Party which could reasonably be expected to have a Material Adverse
Effect except for the fee revision announced by Industry Canada in March, 2001
with respect to PCS license fees (which fee revision is disclosed in the
Information Circular under the heading “PCS License Conditions and Fees”). No
event has occurred which (i) results in or reasonably could be expected to
result in, or after notice or lapse of time or both would result in or
reasonably could be expected to result in, revocation, suspension, adverse
modifications, non-renewal, impairment, restriction or termination of, or order
of forfeiture with respect to, any license in any respect which could
reasonably be expected to have a Material Adverse Effect or (ii) affects or
could reasonably be expected in the future to affect any of the rights of any
Credit Party under any license in any respect which could reasonably be
expected to have a Material Adverse Effect. The Parent, the Borrower and each
other Credit Party have duly filed in a timely manner all material filings,
reports, applications, documents, instruments and information required to be
filed by it under the Telecommunications Act (Canada), and all such filings
were when made true, correct and complete in all respects except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.


3.27     Budget Update. The updated budget provided by the Parent to the
Administrative Agent on March 12, 2003 has been reviewed and approved by the
board of directors of the Parent and, as of the Effective Date, continues to
represent the Parent’s good faith estimate with respect to the matters
contemplated therein.


ARTICLE 4

CONDITIONS



4.1     Conditions
Precedent to Effectiveness of Agreement. This Agreement shall
not become effective until the date on which each of the following conditions
is satisfied (or waived in accordance with Section 9.2):



	 	(a)	 	Credit Agreement. The Administrative Agent (or its counsel)
and the Issuing Bank shall have received from each of the Parent and
the Borrower a counterpart of this Agreement signed on behalf of
each of the Parent and the Borrower and



 






 






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	 	 	 	the Administrative Agent shall have delivered to the Borrower (or
its counsel) a counterpart of this Agreement signed on behalf of
the Administrative Agent and the Lenders.
	 
	 	(b)	 	Representations and Warranties. All representations and
warranties made hereunder and in the other Financing Documents shall
be true and correct as if made on the Effective Date.
	 
	 	(c)	 	No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing after giving effect to
the Loans to be outstanding on the Effective Date.
	 
	 	(d)	 	Due Authorization. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent
or its counsel may reasonably request relating to the organization,
existence and good standing of each Credit Party, the authorization
of the Transactions and any other legal matters relating to the
Credit Parties, the Financing Documents or the Transactions, all in
form and substance satisfactory to the Administrative Agent and its
counsel.
	 
	 	(e)	 	Fees and Expenses. The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to
the Effective Date, including, to the extent invoiced, reimbursement
or payment of all reasonable out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel) incurred in
connection with any of the Financing Documents and the Transactions,
including perfecting Liens on any Collateral.
	 
	 	(f)	 	Legal Opinion. The Administrative Agent shall have received
a favourable written opinion (addressed to the Administrative Agent,
the Issuing Bank and the Lenders and dated the Effective Date) of
Stikeman Elliott LLP, Canadian counsel to the Borrower and the
Parent covering such matters relating to the Credit Parties, this
Agreement or the Transactions as the Lenders shall reasonably
request, and opinions of such other special and local counsel as may
be required by the Administrative Agent and its counsel.
	 
	 	(g)	 	Satisfaction of Collateral and Guarantee Requirements. The
Collateral and Guarantee Requirement shall have been satisfied and
the Administrative Agent shall have received a completed Perfection
Certificate dated the Effective Date and signed by a Responsible
Officer of the Parent and its general counsel, together with all
attachments contemplated thereby. All financing statements,
instruments and other documents required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded, and all approvals and consents of Governmental Authorities
required to be obtained, in each case in order to continue the
publication, perfection of or to create, publish and perfect, as the
case may be, the Liens intended to be created by the Security
Documents with



 






 






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	 	 	 	respect to the Collateral of the Credit Parties shall have been
filed, registered, or recorded or obtained, as the case may be.
	 
	 	(h)	 	Books and Records. The Administrative Agent shall have had
an opportunity, if it so chooses, to examine the books of account
and other records and files of any Credit Party and to make copies
thereof, and the results of such examination shall have been
satisfactory to the Administrative Agent in all respects.
	 
	 	(i)	 	Insurance. The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that the insurance
required by Section 5.10 and each of the Security Documents are in
effect.
	 
	 	(j)	 	Liquidity and Subscriber Numbers. The consolidated cash and
cash equivalents of the Parent shall be not less than
Cdn.$75,000,000 and the aggregate number of Subscribers shall be not
less than 1,000,000.
	 
	 	(k)	 	Consents and Approvals. All consents and approvals required
to be obtained from any Governmental Authority or other Person in
connection with the Transactions (including interim approval or its
equivalent by Industry Canada with respect to the MCS licenses held
by Inukshuk) shall have been obtained, and all applicable waiting
periods and appeal periods shall have expired, in each case without
the imposition of any burdensome conditions.
	 
	 	(l)	 	Satisfaction of Administrative Agent. All proceedings taken
in connection with the execution of this Agreement, all other
Financing Documents and all documents and papers relating thereto
shall be satisfactory in form, scope, and substance to the
Administrative Agent.
	 
	 	(m)	 	Indebtedness. After giving effect to the Transactions, no
Credit Party shall have outstanding any shares of preferred stock or
any Indebtedness, other than (i) the obligations created hereunder
and (ii) the Indebtedness and preferred stock described in Schedule
B.
	 
	 	(n)	 	Occurrence of Effective Date under Plan of Arrangement. The
“Effective Date” (as defined under the Plan of Arrangement) shall
have occurred or shall occur contemporaneously with the
effectiveness of this Agreement.
	 
	 	(o)	 	Sanction Order. The Sanction Order shall not have been
stayed by any court having jurisdiction to issue any such stay, and
the time to appeal the Sanction Order or to seek review, rehearing
or certiorari with respect to the Sanction Order must have expired;
no appeal or petition for review, rehearing or certiorari with
respect to the Sanction Order may be pending, and the Sanction Order
must otherwise be in full force and effect; and the corporate
transactions contemplated by Section 3 of the Plan of Arrangement
shall have been completed pursuant to documentation satisfactory (in
form and substance) to the Administrative Agent.



 






 






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	 	(p)	 	Plan of Arrangement Not Amended, etc. The Plan of
Arrangement shall not have been amended, supplemented, restated or
otherwise modified in any manner not approved by the Administrative
Agent.
	 
	 	(q)	 	Commitment Fees. The Borrower shall have paid to the
Administrative Agent the fees stipulated in the separate fee letter
entered into between the Administrative Agent, the Borrower and the
Parent on the date hereof.
	 
	 	(r)	 	Security Documents. The Collateral Agent (or, with respect
to (i), the Administrative Agent) shall have received:
	 


	 	(i)	 	a guarantee executed by each Credit Party
other than the Borrower in favour of the Administrative
Agent, as agent for the Lenders and the Issuing Bank, dated
as of the Effective Date and in form and substance
satisfactory to the Administrative Agent;
	 
	 	(ii)	 	a general security agreement executed by each
Credit Party in favour of the Collateral Agent, as agent for
the Lenders, the Administrative Agent and the Issuing Bank,
dated as of the Effective Date and in form and substance
satisfactory to the Administrative Agent, constituting a
first-priority Lien on all property from time to time of
each Credit Party, subject only to Permitted Liens;
	 
	 	(iii)	 	a hypothec executed by each Credit Party in
favour of the Collateral Agent, in its capacity as “fondé de
pouvoir” for the Lenders appointed pursuant to Section 8.11
hereof (together with a bond issued pursuant to such
hypothec and a pledge agreement pledging such bond), each
dated as of the Effective Date and in form and substance
satisfactory to the Administrative Agent, constituting a
first-priority hypothecation of all property from time to
time of each Credit Party, subject only to Permitted Liens;
	 
	 	(iv)	 	mortgages executed by each Credit Party in
favour of the Collateral Agent, dated as of the Effective
Date and in form and substance satisfactory to the
Administrative Agent, constituting a first-priority Lien on
all real property from time to time of such Credit Party,
subject only to Permitted Liens;


	 
	 	 	 	provided that if any of the foregoing documents are not
suitable for use in any jurisdiction, the applicable Credit
Party shall provide to the Collateral Agent (or the
Administrative Agent with respect to (i) above) alternative
document(s) with substantially equivalent substantive effect
and which are suitable for use in such jurisdiction.
	 



	 	(s)	 	Execution of Financing Documents. The other Financing
Documents and all instruments and documents hereunder and thereunder
shall have been duly



 






 






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	 	 	 	executed and delivered to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent, together with
any and all other documents and instruments as may have been
reasonably requested by the Administrative Agent.
	 
	 	(t)	 	Execution and Delivery of Documentation. Without limiting
the generality of the items described above, each of the Credit
Parties shall have delivered or caused to be delivered to the
Administrative Agent (in form and substance reasonably satisfactory
to the Administrative Agent), the financial statements, instruments,
resolutions, documents, agreements, mortgages, title reports,
certificates, opinions and other items as may have been requested by
the Administrative Agent.
	 
	 	(u)	 	Other Financing. The Tranche B Credit Agreement and the
Tranche C Credit Agreement shall have been executed and delivered by
the parties thereto and all conditions thereunder shall have been
satisfied or waived.



4.2     Each
Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:



	 	(a)	 	the representations and warranties of the Borrower set forth
in this Agreement shall be true and correct on and as of the date of
each such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable (except where such
representation or warranty refers to a different date);
	 
	 	(b)	 	at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and
be continuing; and
	 
	 	(c)	 	the Administrative Agent shall have received a Notice of
Borrowing/Continuation/Conversion in the manner and within the time
period required by Section 2.2.
	 


	 	 	Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the accuracy of the
matters specified in paragraphs (a) and (b) above. This requirement does
not apply on the conversion or rollover of an existing Borrowing provided
that the aggregate outstanding Borrowings will not be increased as a
consequence thereof.



 






 






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ARTICLE 5

AFFIRMATIVE COVENANTS



     The Borrower and the Parent jointly and severally covenant and agree with
the Lenders that from (and including) the Effective Date until the principal of
and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit and the Commitments shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:


5.1     Financial Statements and Other Information. The Parent or the Borrower (as
applicable) will furnish to the Administrative Agent with copies for each
Lender:



	 	(i)	 	within 120 days after the end of each
Fiscal Year of the Parent, the Parent’s audited
consolidated and unconsolidated balance sheets and related
statements of income, retained earnings and changes in
financial position as of the end of and for such Fiscal
Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all reported on by
Ernst & Young LLP or other independent auditors of
recognized national standing (without a “going concern” or
like qualification or exception and without any
qualification or exception as to the scope of such audit)
to the effect that such consolidated and unconsolidated
financial statements present fairly in all material
respects the financial condition and results of operations
of the Parent and its consolidated subsidiaries on a
consolidated and unconsolidated basis in accordance with
GAAP consistently applied;
	 
	 	(ii)	 	within 120 days after the end of each
Fiscal Year of the Borrower, the Borrower’s audited
consolidated and unconsolidated balance sheet and related
statements of income, retained earnings and changes in
financial position as of the end of and for such Fiscal
Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all reported on by
Ernst & Young LLP or other independent auditors of
recognized national standing (without any qualification or
exception as to the scope of such audit) to the effect that
such consolidated and unconsolidated financial statements
present fairly in all material respects the financial
condition and results of operations of the Borrower and its
consolidated subsidiaries, if any, on a consolidated and
unconsolidated basis in accordance with GAAP consistently
applied;
	 
	 	(iii)	 	within 120 days after the end of each
Fiscal Year of each Unrestricted Subsidiary and each Credit
Party other than the Parent and the Borrower, each such
Unrestricted Subsidiary’s or Credit Party’s audited
unconsolidated balance sheet and related statements of
income, retained earnings and changes in financial position
as of the end of and for such



 






 






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	 	 	 	Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all reported on
by Ernst & Young LLP or other independent auditors of
recognized national standing (without any qualification or
exception as to the scope of such audit) to the effect that
such unconsolidated financial statements present fairly in
all material respects the financial condition and results
of operations of such Unrestricted Subsidiary or Credit
Party, as applicable, on an unconsolidated basis in
accordance with GAAP consistently applied;
	 
	 	(iv)	 	if requested by the Administrative Agent,
within 120 days after the end of each Fiscal Year of the
Parent, the Credit Parties’ audited combined and
consolidated balance sheet and related statements of
income, retained earnings and changes in financial position
as of the end of and for such Fiscal Year, setting forth in
each case in comparative form the figures for the previous
Fiscal Year, all reported on by Ernst & Young LLP or other
independent auditors of recognized national standing
(without a “going concern” or like qualification or
exception and without any qualification or exception as to
the scope of such audit) to the effect that such combined
and consolidated financial statements present fairly in all
material respects the financial condition and results of
operations of the Credit Parties on a combined and
consolidated basis in accordance with GAAP consistently
applied;
	 
	 	(v)	 	within 60 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year of the
Parent, the Parent’s unaudited consolidated balance sheet
and related statements of income, retained earnings and
changes in financial position as of the end of and for such
Fiscal Quarter and the then elapsed portion of the Fiscal
Year which includes such Fiscal Quarter, setting forth in
each case in comparative form (a) the figures for the
corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous Fiscal Year,
and (b) the actual figures for year-to-date versus the
budgeted figures set out in the annual budget delivered
pursuant to Section 5.1(xvi), all certified by a Financial
Officer of the Parent as presenting fairly in all material
respects the financial condition and results of operations
of the Parent and its subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to
the absence of notes and normal year-end audit adjustments;
	 
	 	(vi)	 	within 60 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year of the
Borrower, the Borrower’s unaudited consolidated balance
sheet and related statements of income, retained earnings
and changes in financial position as of the end of and for
such Fiscal Quarter and the then elapsed portion of the
Fiscal Year which



 






 






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	 	 	 	includes such Fiscal Quarter, setting forth in each case in
comparative form (a) the figures for the corresponding
period or periods of (or, in the case of the balance sheet,
as of the end of) the previous Fiscal Year, and (b) the
actual figures for year-to-date versus the budgeted figures
set out in the annual budget delivered pursuant to Section
5.1(xvi), all certified by a Financial Officer as
presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its
subsidiaries, if any, on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end
audit adjustments;
	 
	 	(vii)	 	within 60 days after the end of each
Fiscal Quarter of each Fiscal Year of the Parent, the
Credit Parties’ unaudited consolidated balance sheet and
related statements of income, retained earnings and changes
in financial position as of the end of and for such Fiscal
Quarter and the then elapsed portion of the Fiscal Year
which includes such Fiscal Quarter, setting forth in each
case in comparative form (a) the figures for the
corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous Fiscal Year,
and (b) the actual figures for year-to-date versus the
budgeted figures set out in the annual budget delivered
pursuant to Section 5.1(xvi), all certified by a Financial
Officer as presenting fairly in all material respects the
financial condition and results of operations of the Credit
Parties on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit
adjustments;
	 
	 	(viii)	 	concurrently with the financial statements required
pursuant to Sections 5.1(i), (ii), (iii), (iv), (v), (vi),
and (vii) above, a certificate, signed by a Financial
Officer, (a) stating that a review of such financial
statements during the period covered thereby and of the
activities of each Credit Party has been made under such
Financial Officer’s supervision with a view to determining
whether each Credit Party has fulfilled all of its
obligations under this Agreement and the other Financing
Documents; (b) stating that each Credit Party has fulfilled
its obligations under this Agreement and the other
Financing Documents and that all representations made in
this Agreement continue to be true and correct as if made
on the date of such certification (or specifying the nature
of any change), except where such representation or
warranty refers to a different date, or, if there shall be
a Default or Event of Default, specifying the nature and
status thereof and the relevant Credit Party’s proposed
response thereto; (c) demonstrating in reasonable detail
compliance (including showing all material calculations) as
at the end of the most recently completed Fiscal Year or
the most recently completed Fiscal Quarter with the
financial covenants in Section 5.14



 






 






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	 	 	 	and including a description by category (utilizing the same
categories as are used by the Borrower in internal
financial reports) of any permitted dispositions and
acquisitions and any Capital Expenditures made by the
Borrower or any other Credit Party as of the end of the
most recently-completed Fiscal Year, and (d) containing or
accompanied by such financial or other details, information
and material as the Administrative Agent may reasonably
request to evidence such compliance;
	 
	 	(ix)	 	copies of each management letter issued to
each Credit Party by such accountants promptly following
consideration or review thereof by the board of directors
of each Credit Party, or any committee thereof (together
with any response thereto prepared by any Credit Party);
	 
	 	(x)	 	promptly after the same become publicly
available, copies of all periodic reports, proxy statements
and other similar materials filed by any Credit Party with
any securities commission, stock exchange or similar
entity, and all materials distributed out of the ordinary
course by the Parent to its shareholders and which relate
to matters in which any Lender or the Administrative Agent,
in such capacities, can reasonably be expected to have an
interest;
	 
	 	(xi)	 	within a reasonable time after a request by
the Administrative Agent, additional title information in
form and substance acceptable to the Administrative Agent
as is reasonably necessary covering the Collateral so that
the Lenders shall have received, together with the title
information previously received by the Lenders,
satisfactory title information covering all of the
Collateral;
	 
	 	(xii)	 	promptly after the Parent or the Borrower
learns of the receipt or occurrence of any of the
following, a certificate signed by a Responsible Officer,
specifying (a) any official notice of any violation,
possible violation, non-compliance or possible
non-compliance, or claim made by any Governmental Authority
pertaining to all or any part of the properties of any
Credit Party which could reasonably be expected to have a
Material Adverse Effect; (b) any event which constitutes a
Default or Event of Default, together with a detailed
statement specifying the nature thereof and the steps being
taken to cure such Default or Event of Default; (c) the
creation, dissolution, merger or acquisition of any
Subsidiary; (d) any event or condition not previously
disclosed to the Administrative Agent, which violates any
Environmental Law and which may reasonably be expected to
have a Material Adverse Effect; (e) any material amendment
to, revocation or termination prior to scheduled expiry of,
or material default under, a Material Contract or any
execution of, or material amendment to,



 






 






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	 	 	 	termination prior to scheduled expiry or revocation of, or
material default under, any material collective bargaining
agreement; and (f) any event, development or condition
which may reasonably be expected to have a Material Adverse
Effect;
	 
	 	(xiii)	 	promptly after the occurrence thereof, notice of the
institution of or any material adverse development in any
action, suit or proceeding or any governmental
investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body,
agency or official against any Credit Party or any material
property of any Credit Party which could reasonably be
expected to have a Material Adverse Effect;
	 
	 	(xiv)	 	promptly after the filing thereof with any
Governmental Authority (if requested by the Administrative
Agent), copies of each annual and other report (including
applicable schedules) with respect to each Pension Plan, if
any, of any Credit Party or any trust created thereunder;
	 
	 	(xv)	 	upon request by the Administrative Agent, a
summary of the insurance coverages of each Credit Party in
form and substance reasonably satisfactory to the
Administrative Agent; upon renewal of any insurance policy,
a copy of an insurance certificate summarizing the terms of
such policy; and upon request by the Administrative Agent,
copies of the applicable policies;
	 
	 	(xvi)	 	on or before the 60th day after the end of
each Fiscal Year, an annual budget of the Parent, reviewed
by the board of directors of the Parent, setting forth in
reasonable detail the consolidated projected revenues and
expenses of the Parent for the following Fiscal Year, it
being recognized by the Lenders that projections as to
future results are not to be viewed as fact and that the
actual results for the period or periods covered by such
projections may differ from the projected results;
	 
	 	(xvii)	 	on or before the 90th day after the end of each Fiscal
Year ending on or after December 31, 2003, the Borrower’s
calculation of Excess Cash Flow (as defined in the
Intercreditor Agreement) for the Fiscal Year then ended;
	 
	 	(xviii)	 	promptly following any request therefor, such other
information regarding the operations, business affairs and
financial condition of each Credit Party and each
Unrestricted Subsidiary, or compliance with the terms of
this Agreement, as the Administrative Agent may reasonably
request;



 






 






- 67 -




	 	(xix)	 	within 60 days after the end of each
Fiscal Quarter, a certificate of a Financial Officer of the
Borrower, certifying as to (a) total number of Subscribers
of the Borrower as at the end of such Fiscal Quarter and
net additional Subscribers during such Fiscal Quarter, and
(b) the Subscriber churn ratios of the Borrower in respect
of such Fiscal Quarter;
	 
	 	(xx)	 	written notice promptly, and in any event
within five Business Days, after any Credit Party becomes
aware of the initiation of any proceeding by any
Governmental Authority having jurisdiction over any Credit
Party which could result in the expiration without renewal,
termination, revocation, suspension, modification or
impairment of any Radiocom Licence or other Authorization
where the same could reasonably be expected to cause a
Material Adverse Effect;
	 
	 	(xxi)	 	written notice promptly, and in any event
within five Business Days, after any Credit Party becomes
aware of any proceeding or Law affecting the operation of
the Business, the Radiocom Licences or any other
Authorization which has been enacted or adopted or which
will shortly be enacted or adopted and which could
reasonably be expected to materially adversely affect the
Business or any Credit Party;
	 
	 	(xxii)	 	within 30 days after the end of each month, a report
setting out or providing, as the case may be, with respect
to each switch-site for which a landlord consent pursuant
to Section 5.16 has not already been obtained (a) whether
the landlord/licensor has executed a consent and
acknowledgement relating to the charge by the Borrower of
its leasehold interest in the relevant switch site premises
in favour of the Collateral Agent, and (b) the originals of
all such consents and acknowledgements received during the
month;
	 
	 	(xxiii)	 	prompt written notice of any Swap Agreement entered into
by the Borrower or any other Credit Party or any amendment
or termination thereof, together with all details relating
thereto reasonably requested by the Administrative Agent
(including, without limitation, its effective date,
notional amount, currency, applicable rate, amortization
and maturity date and such other information as may be
reasonably requested by the Administrative Agent to verify
on a continuing basis the mark-to-market exposure of the
Credit Parties under all Swap Agreements);
	 
	 	(xxiv)	 	prompt written notice of any collective bargaining
agreement to which any Credit Party becomes a party;



 






 






- 68 -




	 	(xxv)	 	all environmental site assessments or
other environment-related materials in the possession of
any Credit Party relating to properties owned or leased by
a Credit Party which have not been previously provided to
the Administrative Agent;
	 
	 	(xxvi)	 	prompt written notice of any change in the name of any
Credit Party and of any change in the location of the chief
executive office of any Credit Party and of any change in
any other information on Schedule B necessary to ensure the
accuracy at all times of the representations and warranties
set out in Section 3.20;
	 
	 	(xxvii)	 	promptly after the Parent or the Borrower learns of the
occurrence thereof, written notice of any material default
under any lease (including any sublease) relating to a
switch site used in the Business, including any payment
default thereunder; and
	 
	 	(xxviii)	 	prompt written notice of any material event with
respect to any Unrestricted Subsidiary, including any
Investment by any Person in an Unrestricted Subsidiary.



5.2     Existence; Conduct of Business. Each Credit Party will do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence (subject only to Section 6.3), and except to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect, obtain, preserve, renew and keep in full force and
effect any and all rights, licenses, permits, privileges and franchises
material to the conduct of its business.


5.3     Payment of Obligations. Each Credit Party will pay its obligations,
including Tax liabilities, that, if not paid, could result in a Material
Adverse Effect before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) such Credit Party has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.


5.4     Maintenance of Properties. Each Credit Party will keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.


5.5     Maintenance of Authorizations. Each Credit Party will maintain and keep in
full force and effect all Authorizations necessary to operate the PCS Network
and otherwise carry on the Business.


 






 


- 69 -



5.6     Books and Records; Inspection Rights. Each Credit Party will keep proper
books of record and account in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities. Each
Credit Party will maintain its billing, accounting and software systems at a
level sufficient to enable it to conduct the Business. Each Credit Party will
permit any representatives designated by the Administrative Agent, upon
reasonable prior notice and during normal business hours, to visit and inspect
its properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested
(it being agreed that the aforementioned notice requirements and normal
business hour restrictions shall not be applicable after the occurrence and
continuation of a Default or an Event of Default, and after a Default or an
Event of Default an individual Lender may designate its own representative to
perform any such tasks); provided that, prior to a Default or an Event of
Default, (i) any representative of a Lender who is not an employee of that
Lender has established to the reasonable satisfaction of the Borrower and the
Lenders that there is no inherent conflict of interest between the business and
clientele of the Credit Parties and the business and clientele (other than the
Lenders) of that representative, and (ii) the Lenders and their representatives
shall not be entitled to take copies of (but may nevertheless examine) any
portion of the books, accounts and records of the Credit Parties if allowing
such copies to be taken would result in any Credit Party being in breach of any
contractual or other legally binding obligation of confidentiality. All
information provided or obtained pursuant to this Section 5.6 is subject to
Section 9.12.


5.7     Compliance with Laws and Material Contracts. Each Credit Party will comply
with all Laws and orders of any Governmental Authority applicable to it or its
property (including the Sanction Order) and with all of its material
contractual obligations, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.


5.8     Use
of Proceeds and Letters of Credit. The Borrower will use the proceeds
of any Loan and Letters of Credit hereunder for working capital purposes only.


5.9     Further Assurances. The Borrower will, and will cause each other Credit
Party to, cure promptly any defects in the execution and delivery of the
Financing Documents, including this Agreement. Upon request, the Borrower
will, at its expense, as promptly as practical, execute and deliver to the
Administrative Agent, all such other and further documents, agreements and
instruments (and cause each other Credit Party to take such action) in
compliance with or performance of the covenants and agreements of the Borrower
or any other Credit Party in any of the Financing Documents, including this
Agreement, or to further evidence and more fully describe the Collateral, or to
correct any omissions in any of the Financing Documents, or more fully to state
the security obligations set out herein or in any of the Financing Documents,
or to publish, perfect, protect or preserve any Liens created pursuant to any
of the Financing Documents, or to make any recordings, to file any notices, or
obtain any consents, all as may be necessary or appropriate in connection
therewith.


 






 


- 70 -



5.10     Insurance. The Borrower will, and will cause each other Credit Party to,
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to their respective properties and business
against such liabilities, casualties, risks and contingencies and in such types
(including business interruption insurance and flood insurance) and amounts as
is customary in the case of Persons engaged in the same or similar businesses
and similarly situated and in accordance with any requirement of any
Governmental Authority. In the case of any fire, accident or other casualty
causing loss or damage to any properties of the Borrower used in generating
cash flow or required by applicable Law, all proceeds of such policies shall be
used promptly to repair or replace any such damaged properties, and otherwise
shall be used as directed by the Administrative Agent (i) to repair or replace
the damaged property, or (ii) to prepay the Loans or to make other payments in
accordance with Section 2.6(a). The Borrower will obtain endorsements to the
policies pertaining to all physical properties in which the Collateral Agent or
the Lenders shall have a Lien under the Financing Documents, naming the
Collateral Agent as a loss payee, and containing provisions that such policies
will not be cancelled without 15 days prior written notice having been given by
the insurance company to the Administrative Agent.


5.11     Operation and Maintenance of Property. The Parent will, and will cause
each other Credit Party to, manage and operate its business or cause its
business to be managed and operated (i) in accordance with prudent industry
practice in all material respects and in compliance in all material respects
with the terms and provisions of all applicable licenses, leases, contracts and
agreements, and (ii) in compliance with all applicable laws of the jurisdiction
in which such businesses are carried on, and all applicable Laws of every other
Governmental Authority from time to time constituted to regulate the ownership,
management and operation of such businesses, except where a failure to so
manage and operate could not reasonably be expected to have a Material Adverse
Effect.


5.12     Additional Subsidiaries; Additional Liens. If any additional subsidiary
is formed or acquired after the Effective Date (each such subsidiary, an
“Additional Subsidiary”), the Parent and the Borrower will, within three
Business Days after such subsidiary is formed or acquired, notify the
Administrative Agent thereof and promptly cause the Collateral and Guarantee
Requirement to be satisfied with respect to such subsidiary and with respect to
any Equity Securities in or Indebtedness of such subsidiary owned by or on
behalf of any Credit Party; provided that (i) any action otherwise necessary to
satisfy the Collateral and Guarantee Requirement that is prohibited by
applicable Law and not legally capable of being taken without the appropriate
consents of Governmental Authorities need not be taken and (ii) in the event
any consent or approval of a Governmental Authority necessary to satisfy the
Collateral and Guarantee Requirement cannot reasonably be obtained within 90
days after such Additional Subsidiary is acquired or formed, the Parent and the
Borrower shall, so long as they exercise commercially reasonable efforts to
obtain such consent or approval from the time such Additional Subsidiary is
acquired or formed, have an additional period of time, not to exceed 30 days
after such acquisition or formation, to obtain such consent or approval.


5.13     Intentionally
Deleted. 



 










 



- 71 -



5.14              Financial Covenants. The Credit Parties will comply with the financial
covenants listed in subsections (a) to (e) below. All such financial covenants
shall be calculated on a consolidated basis, except that such calculations
shall not include amounts in respect of Unrestricted Subsidiaries.



	 	(a)	 	Minimum EBITDA. The Credit Parties will ensure that minimum
EBITDA for the Parent for the Rolling Period ending on each
Quarterly Date set forth below is not less than the amount for such
Rolling Period set out in the following table:




	 	 	 	 	 	 
	Quarterly Date	 	Minimum EBITDA (Cdn.$)
	
	 	

	June 30, 2003	 	 	85,000,000	 
	September 30, 2003	 	 	80,000,000	 
	December 31, 2003
	 	 	60,000,000	 
	March 31, 2004
	 	 	60,000,000	 
	June 30, 2004
	 	 	65,000,000	 
	September 30, 2004
	 	 	85,000,000	 
	December 31, 2004
	 	 	110,000,000	 
	March 31, 2005
	 	 	135,000,000	 
	June 30, 2005
	 	 	145,000,000	 
	September 30, 2005
	 	 	150,000,000	 
	December 31, 2005
	 	 	160,000,000	 
	March 31, 2006
	 	 	170,000,000	 
	June 30, 2006
	 	 	180,000,000	 
	September 30, 2006
	 	 	200,000,000	 
	December 31, 2006
	 	 	210,000,000	 
	March 31, 2007
	 	 	220,000,000	 
	June 30, 2007
	 	 	225,000,000	 
	September 30, 2007
	 	 	225,000,000	 
	December 31, 2007
	 	 	225,000,000	 
	March 31, 2008
	 	 	225,000,000	 
	June 30, 2008
	 	 	225,000,000	 
	September 30, 2008
	 	 	225,000,000	 
	December 31, 2008
	 	 	225,000,000	 









 



- 72 -




	 	(b)	 	Minimum Number of Subscribers. The Credit Parties will
ensure that the aggregate number of Subscribers on any date shall
not be less than the number for such date set out in the following
table:




	 	 	 	 	 
	 	 	Number of
	Date	 	Subscribers
	
	 	

	On any date from June 30, 2003 to September 29, 2003
	 	 	955,000	 
	On any date from September 30, 2003 to December 30,
2003
	 	 	955,000	 
	On any date from December 31, 2003 to March 30, 2004
	 	 	955,000	 
	On any date from March 31, 2004 to June 29, 2004
	 	 	1,055,000	 
	On any date from June 30, 2004 to September 29, 2004
	 	 	1,155,000	 
	On any date from September 30, 2004 to December 30,
2004
	 	 	1,155,000	 
	On any date from December 31, 2004 to March 30, 2005
	 	 	1,255,000	 
	On any date from March 31, 2005 to June 29, 2005
	 	 	1,305,000	 
	On any date from June 30, 2005 to September 29, 2005
	 	 	1,355,000	 
	On any date from September 30, 2005 to December 30,
2005
	 	 	1,405,000	 
	On any date from December 31, 2005 to March 30, 2006
	 	 	1,455,000	 
	On any date from March 31, 2006 to June 29, 2006
	 	 	1,455,000	 
	On any date from June 30, 2006 to September 29, 2006
	 	 	1,455,000	 
	On any date from September 30, 2006 to December 30,
2006
	 	 	1,455,000	 
	On any date from December 31, 2006 to March 30, 2007
	 	 	1,455,000	 
	On any date from March 31, 2007 to June 29, 2007
	 	 	1,455,000	 
	On any date from June 30, 2007 to September 29, 2007
	 	 	1,455,000	 
	On any date from September 30, 2007 to December 30,
2007
	 	 	1,455,000	 
	On any date from December 31, 2007 to March 30, 2008
	 	 	1,455,000	 
	On any date from March 31, 2008 to June 29, 2008
	 	 	1,455,000	 
	On any date from June 30, 2008 to September 29, 2008
	 	 	1,455,000	 
	On any date from September 30, 2008 to December 30,
2008
	 	 	1,455,000	 
	On December 31, 2008
	 	 	1,455,000	 




	 	(c)	 	Minimum ARPU. The Credit Parties will ensure that minimum
ARPU for the Fiscal Quarter ending on each date set forth below is
not less than the amount for such Fiscal Quarter set out in the
following table:









 



- 73 -




	 	 	 	 	 	 	 	 
	Fiscal Quarter Ending	 	Minimum ARPU (Cdn.$)
	
	 	

	June 30, 2003
	 	 	32.00	 
	September 30, 2003
	 	 	32.00	 
	December 31, 2003
	 	 	32.00	 
	March 31, 2004
	 	 	32.00	 
	June 30, 2004
	 	 	33.00	 
	September 30, 2004
	 	 	33.00	 
	December 31, 2004
	 	 	33.00	 
	March 31, 2005
	 	 	34.00	 
	June 30, 2005
	 	 	34.00	 
	September 30, 2005
	 	 	34.00	 
	December 31, 2005
	 	 	34.00	 
	March 31, 2006
	 	 	34.00	 
	June 30, 2006
	 	 	34.00	 
	September 30, 2006
	 	 	34.00	 
	December 31, 2006
	 	 	34.00	 
	March 31, 2007
	 	 	34.00	 
	June 30, 2007
	 	 	34.00	 
	September 30, 2007
	 	 	34.00	 
	December 31, 2007
	 	 	34.00	 
	March 31, 2008
	 	 	34.00	 
	June 30, 2008
	 	 	34.00	 
	September 30, 2008
	 	 	34.00	 
	December 31, 2008
	 	 	34.00	 




	 	(d)	 	Minimum Liquidity. The Credit Parties will ensure that, at
all times, the consolidated cash and Permitted Investments of the
Credit Parties, when aggregated with the available unused portion of
the Commitments hereunder, will be not less than the aggregate of
(i) the amount set forth in the table below (as applicable for such
time), plus (ii) an amount equal to 50% of the principal amount of
the Commitments hereunder, less (iii) an amount equal to the
cumulative amount of Excess Cash Flow (as defined in the
Intercreditor Agreement) paid to the Collateral Agent pursuant to
Section 2.2 of the Intercreditor Agreement since the Effective Date.
Any cash or Permitted Investments of any Credit Party which is
subject to any Lien, other than a Permitted Lien, in favour of any
Person other than the Collateral Agent, the









 






- 74 -




	 	 	 	Administrative Agent,
any trustee or “fondé de pouvoir” on behalf of the Collateral Agent,
the Administrative Agent, the Issuing Bank or any Lender, shall not
be included in the consolidated cash and Permitted Investments of
the Credit Parties for the purpose of determining compliance with
this Section 5.14(d).




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fiscal Quarter Ending	 	 	 	 
	on Quarterly Date below	Minimum Amount (Cdn.$)
	
	

	 
	 	June 30, 2003	 	 	 	 	 	 	50,000,000	 
	 
	 	September 30, 2003	 	 	 	 	 	 	50,000,000	 
	 
	 	December 31, 2003	 	 	 	 	 	 	50,000,000	 
	 
	 	March 31, 2004	 	 	 	 	 	 	10,000,000	 
	 
	 	June 30, 2004	 	 	 	 	 	 	10,000,000	 
	 
	 	September 30, 2004	 	 	 	 	 	 	20,000,000	 
	 
	 	December 31, 2004	 	 	 	 	 	 	20,000,000	 
	 
	 	March 31, 2005	 	 	 	 	 	 	(-5,000,000	)
	 
	 	June 30, 2005	 	 	 	 	 	 	0	 
	 
	 	September 30, 2005	 	 	 	 	 	 	20,000,000	 
	 
	 	December 31, 2005	 	 	 	 	 	 	25,000,000	 
	 
	 	March 31, 2006	 	 	 	 	 	 	30,000,000	 
	 
	 	June 30, 2006	 	 	 	 	 	 	45,000,000	 
	 
	 	September 30, 2006	 	 	 	 	 	 	100,000,000	 
	 
	 	December 31, 2006	 	 	 	 	 	 	130,000,000	 
	 
	 	March 31, 2007	 	 	 	 	 	 	130,000,000	 
	 
	 	June 30, 2007	 	 	 	 	 	 	150,000,000	 
	 
	 	September 30, 2007	 	 	 	 	 	 	150,000,000	 
	 
	 	December 31, 2007	 	 	 	 	 	 	150,000,000	 
	 
	 	March 31, 2008	 	 	 	 	 	 	150,000,000	 
	 
	 	June 30, 2008	 	 	 	 	 	 	150,000,000	 
	 
	 	September 30, 2008	 	 	 	 	 	 	150,000,000	 
	 
	 	December 31, 2008	 	 	 	 	 	 	150,000,000	 




	 	(e)	 	Maximum Capital Expenditures. The Credit Parties will ensure
that the cumulative aggregate amount of Capital Expenditures
incurred by the Credit Parties from the Effective Date until each
Fiscal Year end date set forth in the following table shall not
exceed the cumulative aggregate amounts set forth for the applicable
date in the following table; provided, however, that if the
aggregate









 





- 75 -




	 	 	 	number of Subscribers as at any such Fiscal Year end date
is less than the “Target Subscriber Number” for such date as set
forth in the following table, then the permitted aggregate amount of
Capital Expenditures which may be incurred by the Credit Parties
from the Effective Date until the next Fiscal Year end date shall be
reduced to an amount determined by multiplying the cumulative
aggregate maximum amount of permitted Capital Expenditures set forth
in such table by a
fraction, the numerator of which is the actual number of
Subscribers on such Fiscal Year end date and the denominator of
which is the “Target Subscriber Number” for such Fiscal Year end
date as set forth in the following table:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Cumulative
	 	 	 	 	 	 	Aggregate
	 	 	Target	 	Amount of
	 	 	Subscriber	 	Capital
	Date	 	Number	 	Expenditures
	
	 	
	 	

	Effective Date to December 31, 2003
	 	 	1,268,749	 	 	 	100,000,000	 
	Effective Date to December 31, 2004
	 	 	1,480,503	 	 	 	250,000,000	 
	Effective Date to December 31, 2005
	 	 	1,704,166	 	 	 	420,000,000	 
	Effective Date to December 31, 2006
	 	 	1,919,790	 	 	 	540,000,000	 
	Effective Date to December 31, 2007
	 	 	2,103,761	 	 	 	660,000,000	 
	Effective Date to December 31, 2008
	 	 	2,259,751	 	 	 	780,000,000	 



5.15              Most Favoured Nations. The Borrower will ensure that, if the Borrower
provides to any lender as at the Effective Date, or provides to any other
lender in the future, a financial ratio or other form of financial measurement
covenant which is not specifically included in this Agreement, or which is more
restrictive than the corresponding covenant in this Agreement, then this
Agreement shall be deemed to have been amended automatically to have the
benefit of such other present or future financial ratio or other form of
financial measurement covenant; provided that if any such present or future
financial ratio or other form of financial measurement covenant provided by the
Borrower to another lender and not specifically included in this Agreement is
changed or eliminated, the same change or elimination will automatically apply
to this Agreement. For greater certainty, but without limitation, a covenant
to maintain any particular type or class of assets or any particular type or
class of liabilities (as the terms “asset” and “liability” are used under GAAP)
at a specified maximum or minimum dollar amount (for example, a covenant that
indebtedness will not exceed a fixed dollar amount) shall not constitute a
“financial ratio or other financial measurement covenant”; however, a covenant
such as a net worth covenant, which is not limited to any particular type or
class of assets or any particular type or class of liabilities, shall
constitute a “financial ratio or other financial measurement covenant”.








 


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5.16              Landlord Consents. The Credit Parties shall use their best efforts to
deliver to the Administrative Agent as promptly as possible a consent from each
landlord of each leased switch site premises in such form as the Administrative
Agent may agree.


5.17              Bank Accounts. All bank accounts and other investment accounts of the
Credit Parties shall be maintained in Canada with a Lender or with a financial
institution which has confirmed in writing to the Administrative Agent that
such financial institution will not have
a credit relationship with the Credit Parties and will not exercise any right
of set-off or other similar right against the assets in any such account.


ARTICLE 6 
NEGATIVE COVENANTS




                     From (and including) the Effective Date until the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, and all Commitments hereunder have expired or been terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lenders that:


6.1              Indebtedness. The Borrower will not, and will not permit any Credit Party
to, create, incur, assume or permit to exist any Indebtedness, except:



	 	(a)	 	any Indebtedness created hereunder;
	 
	 	(b)	 	any Indebtedness created under the Tranche B Credit
Agreement;
	 
	 	(c)	 	any Indebtedness created under the Tranche C Credit
Agreement, the First Notes or the Second Notes;
	 
	 	(d)	 	Indebtedness existing on the date hereof and set forth in
Schedule B and any extensions, renewals or replacements of any such
Indebtedness so long as the terms and conditions of any such
extension, renewal or replacement do not impose on any Credit Party
any terms or conditions which are more onerous than the terms and
conditions of the Indebtedness being extended, renewed or replaced
except for changes in pricing resulting solely from changes in
market conditions generally;
	 
	 	(e)	 	any Indebtedness of the Borrower to any other Credit Party
and of any other Credit Party to the Borrower or any other Credit
Party;
	 
	 	(f)	 	any Guarantee by any other Credit Party of Indebtedness of
the Borrower or any other Credit Party;
	 
	 	(g)	 	any Indebtedness of any Credit Party incurred to finance the
acquisition, construction or improvement of any fixed or capital
assets, including Indebtedness secured by Purchase Money Liens and
Capital Lease Obligations









 






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	 	 	 	and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof, provided that (i)
such Indebtedness is incurred prior to or within 30 days after such
acquisition or the completion of such construction or improvement
and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (g) shall not
exceed Cdn.$5,000,000 at any time outstanding;
	 
	 	(h)	 	any Indebtedness in respect of sight trade letters of credit
in an aggregate amount not exceeding Cdn.$5,000,000;
	 
	 	(i)	 	any Indebtedness in respect of judgments against any Credit
Party that the Borrower has determined in good faith will be (and
which are) stayed or discharged within 45 days of the rendering
thereof;
	 
	 	(j)	 	any Indebtedness in respect of Swap Agreements not prohibited
by Section 6.5;
	 
	 	(k)	 	other unsecured Indebtedness of the Borrower in an aggregate
principal amount not exceeding Cdn.$5,000,000 at any time;
	 
	 	(l)	 	any Permitted Subordinated Refinancing Debt; and
	 
	 	(m)	 	any other Indebtedness consented to by the Required Lenders.



6.2              Liens. The Parent and the Borrower will not, and will not permit any other
Credit Party to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by the Parent, the Borrower
or any other Credit Party, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except Permitted
Liens.


6.3              Fundamental Changes. The Parent and the Borrower will not, and will not
permit any Credit Party to, merge into or amalgamate or consolidate with any
other Person, or permit any other Person to merge into or amalgamate or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets, or all or any of the Equity Securities of any of the Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing, (i) any Subsidiary may
amalgamate with the Borrower, (ii) any Subsidiary may amalgamate with any other
Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose
of its assets to the Borrower or to another Subsidiary, (iv) any Subsidiary may
liquidate or dissolve into the Borrower or another Credit Party if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and the Administrative Agent determines that such
liquidation or dissolution is not disadvantageous to the Lenders, and (v) the
Parent may amalgamate with the Pre-Filing Parent, as contemplated by Article 3
of the








 


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Plan of Arrangement; provided that any amalgamation pursuant to Sections
6.3(i), (ii) or (v) shall not be permitted unless the amalgamated corporation
confirms to the Administrative Agent in writing that the amalgamated
corporation is liable, by operation of law or otherwise, for the obligations of
the Borrower or the relevant amalgamating corporation under this Agreement.
The Borrower will not, and will not permit any Credit Party to, engage to any
material extent in any material business other than the Business.


6.4              Investments, Loans, Advances, and Guarantees. The Parent and the Borrower
will not, and will not permit any Credit Party to, purchase, hold or acquire
(including pursuant to any amalgamation with any Person that was not a
wholly-owned subsidiary prior to such amalgamation) any Equity Securities,
evidences of Indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, provide any Guarantee of any obligations of, or make or
permit to exist any Investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person, except:



	 	(a)	 	Investments by a Credit Party in the Equity Securities of any
other Credit Party, except the Parent;
	 
	 	(b)	 	loans or advances made by the Parent to the Borrower or any
Subsidiary, by the Borrower to any Subsidiary, or made by any
Subsidiary to the Borrower or any other Subsidiary;
	 
	 	(c)	 	Guarantees constituting Indebtedness permitted by Section
6.1;
	 
	 	(d)	 	Investments in Unrestricted Subsidiaries held by the Credit
Parties on the Effective Date, and a further Investment of up to
$3,500,000 in Inukshuk Internet Inc. to the extent necessary to
permit Inukshuk Internet Inc. to make required payments in
accordance with the requirements of its MCS licenses, and to make
certain payments to employees;

	 
	 	(e)	 	
Permitted Investments;
	 
	 	(f)	 	the existing Investments made by the Credit Parties and
listed in Schedule “B” hereto; and
	 
	 	(g)	 	a further Investment of up to
U.S.$500,000 in Argo II – The
Wireless Internet Fund Limited Partnership.



For greater certainty, except as set forth in Section 6.4(d), the Credit
Parties will not make any further Investment in any Unrestricted Subsidiary
after the Effective Date.


6.5              Hedging Agreements. No Credit Party will enter into any Swap Agreement,
other than U.S.$ Hedges having notional amounts not exceeding Cdn.$100,000,000








 


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at any time (in the aggregate for all such Swap Agreements) and having
termination dates not later than six months after the date of the relevant Swap
Agreement.


6.6              Restricted Payments. The Borrower will not, and will not permit any Credit
Party to, declare, pay or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, provided that (a) the Parent may declare
and pay dividends with respect to the FPV Shares, the FPNV Shares, the SPV
Shares and the SPNV Shares to the extent contemplated by the Parent Articles of
Incorporation, provided that no Default has occurred and is continuing and
there is sufficient aggregate Excess Cash Flow (as defined in the Intercreditor
Agreement), proceeds from Asset Dispositions and proceeds from the issuance of
Equity Securities to fund the payment of all amounts which, by the terms of the
Intercreditor Agreement, are to be paid prior to any payment on account of
dividends on the FPV Shares, the FPNV Shares, the SPV Shares and the SPNV
Shares (or the payment of interest on the First Notes or Second Notes, as
applicable), (b) the Borrower may declare and pay dividends to the Parent, (c)
any Subsidiary may declare and pay dividends to the Parent, the Borrower or any
wholly-owned Subsidiary and any wholly-owned Subsidiary may redeem or
repurchase its own Equity Securities, (d) the Borrower may make Restricted
Payments pursuant to and in accordance with management bonus plans, employee
bonus plans, stock option plans, profit sharing plans and/or other benefit
plans for management or employees of the Parent, the Borrower and its
Subsidiaries, provided that the aggregate amount of cash payments made by the
Parent, the Borrower and the Subsidiaries in any Fiscal Year pursuant to all
such management bonus plans, employee bonus plans, stock option plans, profit
sharing plans and other compensation benefit plans shall not exceed
Cdn.$1,000,000, and (e) the Parent may redeem, pursuant to Parent Articles of
Incorporation, First Preferred Shares and Second Preferred Shares by issuing
First Units and Second Units (as defined in the Plan of Arrangement).


6.7              Transactions with Affiliates. The Borrower will not, and will not permit
any Credit Party to, sell, lease or otherwise transfer any property or assets
to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) in the ordinary course of business at prices and on terms and conditions
not less favourable to the Borrower or such Credit Party than could be obtained
on an arm’s-length basis from unrelated third parties, (b) transactions between
or among Credit Parties
and not involving any other Affiliate, (c) any Restricted Payment permitted by
Section 6.6, and (d) any transaction permitted under Section 6.3. The Borrower
and other Credit Parties will not enter into any transaction or series of
transactions with Affiliates of the Parent, which involve an outflow of money
or other Property from the Parent, the Borrower or other Credit Parties to an
Affiliate of the Parent, including repayment of Indebtedness, or payment of
management fees, affiliation fees, administration fees, compensation, salaries,
asset purchase payments or any other type of fees or payments similar in
nature, other than on terms and conditions substantially as favourable to the
Parent, the Borrower and the other Credit Parties as would be obtainable by the
Parent, the Borrower and the other Credit Parties in a reasonably comparable
arm’s-length transaction with a Person other than an Affiliate of the Parent,
the Borrower or the Subsidiaries, provided, however, that, in any event, the
aggregate amount of all management fees, affiliation fees, administration fees
and other similar fees paid by the Parent, the Borrower or any of the







 


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Subsidiaries to an Affiliate of the Parent, the Borrower or the Subsidiaries in
any Fiscal Year shall not exceed Cdn.$2,000,000. The foregoing restrictions
shall not apply to: (i) the payment of reasonable and customary fees to
directors of the Parent or the Borrower who are not employees of the Parent or
the Borrower, (ii) any other transaction with any employee, officer or director
of the Parent, the Borrower or any Subsidiary pursuant to employee profit
sharing and/or benefit plans and compensation and non-competition arrangements
in amounts customary for corporations similarly situated to the Parent, the
Borrower or any such Subsidiary and entered into in the ordinary course of
business and approved by the board of directors of the Parent, the Borrower or
such Subsidiary, or (iii) any reimbursement of reasonable out-of-pocket costs
incurred by an Affiliate of the Parent or the Borrower on behalf of or for the
account of the Parent, the Borrower or any of the Subsidiaries.


6.8              Repayment of Debt. The Borrower will not, and will not permit any Credit
Party to, repay, prepay, redeem, repurchase, defease or otherwise make any
payment on account of any Indebtedness for borrowed money except for (a)
payment on account of Indebtedness created hereunder, (b) any payment consented
to in writing by the Required Lenders, (c) Indebtedness for borrowed money
permitted by Section 6.1, the repayment of which is not restricted by Section
6.6, and (d) any payment made pursuant to Section 2.2 of the Intercreditor
Agreement.


6.9              Restrictive Agreements. The Borrower will not, and will not permit any
Credit Party to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Credit Party to create, incur or permit
to exist any Lien upon any of its property or assets, (b) the ability of any
Credit Party to pay dividends or other distributions with respect to any Equity
Securities or with respect to, or measured by, its profits or to make or repay
loans or advances to any other Credit Party or to provide a Guarantee of any
Indebtedness of any other Credit Party, (c) the ability of any Credit Party to
make any loan or advance to any other Credit Party, or (d) the ability of any
Credit Party to sell, lease or transfer any of its property to the Borrower or
any other Credit Party; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by Law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule B (but shall apply to any extension
or renewal of, or any amendment or modification expanding the scope of, any
such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of any Credit Party pending such sale, provided such restrictions and
conditions apply only to the Credit Party that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and
other ordinary course contracts restricting the assignment thereof.


6.10              Capital Lease Obligations. The Borrower will not create, incur, assume or
suffer to exist, or permit any Credit Party to create, incur, assume or suffer
to exist, any








 


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Capital Lease Obligations, whether directly or as a guarantor,
if, after giving effect thereto, the aggregate amount of all payments required
to be made by the Parent, the Borrower and the other Credit Parties on a
consolidated basis pursuant to such Capital Lease Obligations would exceed
Cdn.$1,000,000 in any Fiscal Year.


6.11              Sales and Leasebacks. No Credit Party shall enter into any arrangement,
directly or indirectly, with any Person whereby any Credit Party shall sell or
transfer any property, whether now owned or hereafter acquired, and whereby
such Credit Party shall then or thereafter rent or lease as lessee such
property or any part thereof or other property which such Credit Party intends
to use for substantially the same purpose or purposes as the property sold or
transferred.


6.12              Pension Plan Compliance. If any Credit Party establishes a Pension Plan,
such Credit Party will not (a) terminate such Pension Plan in a manner, or take
any other action with respect to such Pension Plan, which could reasonably be
expected to have a Material Adverse Effect; (b) fail to make full payment when
due of all amounts which, under the provisions of such Pension Plan, any
agreement relating thereto or applicable Law, any Credit Party is required to
pay as contributions thereto, except where the failure to make such payments
could not reasonably be expected to have a Material Adverse Effect; (c) permit
to exist any accumulated funding deficiency, whether or not waived, with
respect to such Pension Plan in an amount which could reasonably be expected to
cause a Material Adverse Effect; (d) contribute to or assume an obligation to
contribute to any “multi-employer pension plan” as such term is defined in the
Pension Benefits Act (Ontario); (e) permit the actuarial present value of the
benefit liabilities (computed on an accumulated benefit obligation basis in
accordance with GAAP) under all Pension Plans in the aggregate to exceed the
current value of the assets of all Pension Plans in the aggregate that are
allocable to such benefit liabilities, in each case only to the extent such
liabilities and assets relate to benefits to be paid to employees of the Credit
Parties, by an amount that could reasonably be expected to cause a Material
Adverse Effect.


6.13              Sale or Discount of Receivables. The Borrower will not, and will not
permit any Credit Party to, discount or sell (with or without recourse) any
notes receivable or accounts receivable to any Person (except for sales from
one Credit Party to another Credit
Party), other than accounts receivable that are more than 90 days overdue and
which are sold on arm’s length commercial terms to a factoring company.


6.14              Unconditional Purchase Obligations. The Borrower will not, and will not
permit any Credit Party to, enter into or be a party to, any material contract
for the purchase of materials, supplies or other property or services, if such
contract requires that payment be made by it regardless of whether or not
delivery of such materials, supplies or other property or services is ever
made.


6.15              Ownership of Shares. The Borrower will not authorize or issue any shares
in its capital to any Person other than the Parent and the Pre-Filing Parent,
and the Borrower will not permit the transfer of any shares in its capital to
any Person other than the Parent. No Subsidiary will authorize or issue any
shares in its capital to any Person other than another Credit








 


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Party, and no
Subsidiary will permit the transfer of any shares in its capital to any Person
other than another Credit Party.


6.16              No Amendments to Material Contracts. The Borrower will not amend (or
waive any provision of), or permit any Credit Party to amend (or waive any
provision of), any Material Contract in a manner which may reasonably be
expected to have a Material Adverse Effect.


ARTICLE 7



EVENTS OF DEFAULT



7.1              Events of Default. If any of the following events (“Events of Default”)
shall occur:



	 	(a)	 	the Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
	 
	 	(b)	 	the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in
clause (a) above) payable under this Agreement, when and as the same
shall become due and payable;
	 
	 	(c)	 	any representation or warranty made or deemed made by or on
behalf of the Borrower or any other Credit Party in or in connection
with any Financing Document or any amendment or modification thereof
or waiver thereunder shall prove to have been incorrect when made or
deemed to be made, or any representation or warranty made or deemed
made by or on behalf of the Borrower or any other Credit Party in
any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Financing Document
or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or
deemed to be made;
	 
	 	(d)	 	the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.1(xii)(b) (notices of
Default or Events of Default), 5.2 (with respect to the Borrower’s
existence), 5.14 (Financial Covenants) or in Article 6 (or in any
comparable provision of any other Financing Document);
	 
	 	(e)	 	the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clauses (a), (b) or (d) above) or any other Financing
Document, and such failure shall continue unremedied for a period of
30 days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender);








 






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	 	(f)	 	any Credit Party shall fail to make any payment whether of
principal or interest, and regardless of amount, in respect of any
Material Indebtedness, when and as the same shall become due and
payable;
	 
	 	(g)	 	any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse
of time or both) the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this Section 7.1(g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such
Indebtedness so long as the proceeds of such sale or transfer are
sufficient to, and are applied to, reduce such secured Indebtedness
to nil;
	 
	 	(h)	 	any Credit Party:
	 


	 	(i)	 	becomes insolvent, or generally does not
or becomes unable to pay its debts or meet its liabilities
as the same become due, or admits in writing its inability
to pay its debts generally, or declares any general
moratorium on its indebtedness, or proposes a compromise
or arrangement between it and any class of its creditors;
	 
	 	(ii)	 	commits an act of bankruptcy under the
Bankruptcy and Insolvency Act (Canada), or makes an
assignment of its property for the general benefit of its
creditors under such Act, or makes a proposal (or files a
notice of its intention to do so) under such Act;
	 
	 	(iii)	 	institutes any proceeding seeking to
adjudicate it an insolvent, or except as permitted by
Section 6.3, seeking liquidation, dissolution, winding-up,
reorganization, compromise, arrangement, adjustment,
protection, moratorium, relief, stay of proceedings of
creditors generally (or any
class of creditors), or composition of it or its debts or
any other relief, under any federal, provincial or foreign
Law now or hereafter in effect relating to bankruptcy,
winding-up, insolvency, reorganization, receivership, plans
of arrangement or relief or protection of debtors (including
the Bankruptcy and Insolvency Act (Canada), the CCAA and any
applicable corporations legislation) or at common law or in
equity, or files an answer admitting the material
allegations of a petition filed against it in any such
proceeding;
	 
	 	(iv)	 	applies for the appointment of, or the
taking of possession by, a receiver, interim receiver,
receiver/manager, sequestrator, conservator, custodian,
administrator, trustee, liquidator or other similar
official for it or any substantial part of its property;
or








 






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	 	(v)	 	threatens to do any of the foregoing, or
takes any action, corporate or otherwise, to approve,
effect, consent to or authorize any of the actions
described in this Section 7.1(h) or in Section 7.1(i), or
otherwise acts in furtherance thereof or fails to act in a
timely and appropriate manner in defense thereof,


	 
	 	(i)	 	any petition is filed, application made or other proceeding
instituted against or in respect of any Credit Party:


	 
	 	(i)	 	seeking to adjudicate it an insolvent;
	 
	 	(ii)	 	seeking a receiving order against it
under the Bankruptcy and Insolvency Act (Canada);
	 
	 	(iii)	 	seeking liquidation, dissolution,
winding-up, reorganization, compromise, arrangement,
adjustment, protection, moratorium, relief, stay of
proceedings of creditors generally (or any class of
creditors), or composition of it or its debts or any other
relief under any federal, provincial or foreign Law now or
hereafter in effect relating to bankruptcy, winding-up,
insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors (including
the Bankruptcy and Insolvency Act (Canada), the CCAA and
any applicable corporations legislation) or at common law
or in equity; or
	 
	 	(iv)	 	seeking the entry of an order for relief
or the appointment of, or the taking of possession by, a
receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator,
trustee, liquidator or other similar official for it or
any substantial part of its property;


	 
	 	 	 	and such petition, application or proceeding continues undismissed,
or unstayed and in effect, for a period of 30 days after the
institution thereof, provided that if
an order, decree or judgment is granted or entered (whether or not
entered or subject to appeal) against any Credit Party thereunder
in the interim, such grace period will cease to apply, and provided
further that if any Credit Party files an answer admitting the
material allegations of a petition filed against it in any such
proceeding, such grace period will cease to apply;
	 
	 	(j)	 	any other event occurs which, under the Laws of any
applicable jurisdiction, has an effect equivalent to any of the
events referred to in either of Sections 7.1(h) or (i);
	 
	 	(k)	 	one or more judgments of a court of competent jurisdiction
for the payment of money in a cumulative amount in excess of
Cdn.$10,000,000 (or its then equivalent in any other currency) in
the aggregate is rendered against the Borrower, any other Credit
Party or any combination thereof and the Borrower or








 






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	 	 	 	other Credit
Party has not (i) provided for its discharge in accordance with its
terms within 30 days from the date of entry thereof, or (ii)
procured a stay of execution thereof within 30 days from the date of
entry thereof and within such period, or such longer period during
which execution of such judgment has not been stayed, appealed such
judgment and caused the execution thereof to be stayed during such
appeal, provided that if enforcement and/or realization proceedings
are lawfully commenced in respect thereof in the interim, such grace
period will cease to apply;
	 
	 	(l)	 	any property of any Credit Party having a Fair Market Value
in excess of Cdn.$5,000,000 (or its then equivalent in any other
currency) in the aggregate is seized (including by way of execution,
attachment, garnishment, levy or distraint), or any Lien thereon
securing Indebtedness in excess of Cdn.$5,000,000 (or its then
equivalent in any other currency) is enforced, or such property has
become subject to any charging order or equitable execution of a
Governmental Authority, or any writ of execution or distress warrant
exists in respect of any Credit Party or the property of any of
them, or any sheriff or other Person becomes lawfully entitled by
operation of law or otherwise to seize or distrain upon such
property and in any case such seizure, enforcement, execution,
attachment, garnishment, distraint, charging order or equitable
execution, or other seizure or right, continues in effect and is not
released or discharged for more than 30 days or such longer period
during which entitlement to the use of such property continues with
the Credit Party, and the Credit Party is contesting the same in
good faith and by appropriate proceedings, provided that if the
property is removed from the use of the relevant Credit Party, or is
sold, in the interim, such grace period will cease to apply, and
provided further that if the Person seizing the property is a Lender
or any person “related” to the Lender (as “related” is defined in
the Income Tax Act), the seizure will not constitute an Event of
Default;
	 
	 	(m)	 	one or more final judgments of a court of competent
jurisdiction, not involving the payment of money and not otherwise
specified in this Section 7.1, has been
rendered against any Credit Party, the result of which could
reasonably be expected to result in a Material Adverse Effect, so
long as the Credit Party has not (i) provided for its discharge in
accordance with its terms within 30 days from the date of entry
thereof, or (ii) procured a stay of execution thereof within 30
days from the date of entry thereof and within such period, or such
longer period during which execution of such judgment has been
stayed, appealed such judgment and caused the execution thereof to
be stayed during such appeal, provided that if enforcement and/or
realization proceedings are lawfully commenced in respect thereof
in the interim, such grace period will cease to apply;
	 
	 	(n)	 	this Agreement, any other Financing Document or any material
obligation or other provision hereof or thereof at any time for any
reason terminates or ceases








 






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	 	 	 	to be in full force and effect and a
legally valid, binding and enforceable obligation of any Credit
Party, is declared to be void or voidable or is repudiated, or the
validity, binding effect, legality or enforceability hereof or
thereof is at any time contested by any Credit Party, or any Credit
Party denies that it has any or any further liability or obligation
hereunder or thereunder or any action or proceeding is commenced to
enjoin or restrain the performance or observance by any Credit Party
of any material terms hereof or thereof or to question the validity
or enforceability hereof or thereof, or at any time it is unlawful
or impossible for the Credit Party to perform any of its material
obligations hereunder or thereunder, except to the extent that any
of the foregoing results directly from the gross negligence or
wilful misconduct of the Administrative Agent or any Lender;
	 
	 	(o)	 	any Lien purported to be created by any Security Document
shall cease to be, or shall be asserted by any Credit Party not to
be, a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement, the Intercreditor Agreement or
such Security Document) Lien in Collateral with a Fair Market Value
or book value (whichever is greater) in excess, individually or in
the aggregate, of Cdn.$5,000,000;
	 
	 	(p)	 	a Material Adverse Change shall occur; or
	 
	 	(q)	 	a Change in Control shall occur;



then, and in every such event (other than an event with respect to the Borrower
described in clause (h), (i) or (j) above), and at any time thereafter during
the continuance of such event or any other such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, declare the Loans then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind except as set forth earlier in this
paragraph, all of which are hereby waived by the Borrower; and in the case of
any event with respect to the Borrower described in clause (h), (i) or (j)
above, the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.


ARTICLE 8

THE ADMINISTRATIVE AGENT



8.1              Appointment of Agent. Each Lender and the Issuing Bank hereby designates
JPMorgan Chase Bank, Toronto Branch, as Administrative Agent to act as herein
specified and as specified in the other Financing Documents. Each Lender and
the Issuing Bank







 


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hereby irrevocably authorizes the Administrative Agent to take
such action on its behalf under the provisions of the Financing Documents and
to exercise such powers and to perform such duties thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through its
agents or employees.


8.2              Limitation of Duties of Agent. The Administrative Agent shall have no
duties or responsibilities except those expressly set forth with respect to the
Administrative Agent in this Agreement and as specified in the other Financing
Documents. Neither the Administrative Agent nor any of its Related Parties
shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or wilful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have, by reason of
this Agreement or the other Financing Documents, a fiduciary relationship in
respect of any Lender or the Issuing Bank. Nothing in this Agreement or the
other Financing Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement except as expressly set forth herein. The Administrative
Agent shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to this Agreement or the other Financing Documents unless
it is requested in writing to do so by the Required Lenders.


8.3              Lack of Reliance on the Agent.



	 	(a)	 	Independent Investigation. Independently, and without
reliance upon the Administrative Agent, each Lender and the Issuing
Bank, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the
financial condition and affairs of the Credit Parties in connection
with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the creditworthiness of the Credit
Parties, and, except as expressly provided in this Agreement and the
other Financing Documents, the Administrative Agent shall have no
duty or responsibility, either initially or on a continuing basis,
to provide any Lender or the Issuing Bank with any credit or
other information with respect thereto, whether coming into its
possession before the consummation of the Transactions or at any
time or times thereafter.
	 
	 	(b)	 	Agent Not Responsible. The Administrative Agent shall not be
responsible to any Lender or the Issuing Bank for any recitals,
statements, information, representations or warranties contained
herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or
sufficiency of this Agreement or the other Financing Documents or
the financial condition of any Credit Party or be required to make
any inquiry concerning either the performance or observance of any
of the terms, provisions or conditions of this Agreement or the
other Financing Documents, or the financial condition of any Credit
Party, or the existence or possible existence of any Default or
Event of Default.








 






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8.4              Certain Rights of the Administrative Agent. If the Administrative Agent
shall request instructions from the Lenders or the Required Lenders (as the
case may be) with respect to any act or action (including the failure to act)
in connection with this Agreement or the other Financing Documents, the
Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until the Administrative Agent shall have received written
instructions from the Lenders or the Required Lenders, as applicable, and the
Administrative Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting under this Agreement and
the other Financing Documents in accordance with the instructions of the
Required Lenders, or, to the extent required by Section 9.2, all of the
Lenders.


8.5              Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
facsimile message, electronic mail, cablegram, radiogram, order or other
documentary teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person. The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.


8.6              Indemnification of Agent. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Administrative Agent, in proportion to its aggregate Applicable
Percentage, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
reasonable counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in performing its duties hereunder, in any way relating to
or arising out of this Agreement or any other Financing Document, including all
applicable Taxes to which the Administrative Agent may be subject in so
performing or that are in any way so related; provided that no Lender
shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent’s gross negligence (it being acknowledged that ordinary negligence does
not necessarily constitute gross negligence) or wilful misconduct.


8.7              The Agent in its Individual Capacities. With respect to its obligations
under this Agreement and the Loans made by it, JPMorgan Chase Bank, Toronto
Branch, in its capacity as a Lender hereunder, shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it
were not performing the duties, if any, specified herein; and the terms
“Lenders” and “Required Lenders” and any similar terms shall, unless the
context clearly otherwise indicates, include JPMorgan Chase Bank, Toronto
Branch in its capacity as a Lender hereunder. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other







 


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business with the Borrower or any
affiliate of the Borrower as if it were not performing the duties, if any,
specified herein, and may accept fees and other consideration from the Borrower
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.


8.8              May Treat Lender as Owner. The Borrower, Administrative Agent and the
Issuing Bank may deem and treat each Lender as the owner of the Loans recorded
on the Register maintained pursuant to Section 9.4(b) for all purposes hereof
until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who at the time of making such request or giving such authority or
consent is the owner of a Loan shall be conclusive and binding on any
subsequent owner, transferee or assignee of such Loan.


8.9              Successor Administrative Agent.



	 	(a)	 	Administrative Agent Resignation. The Administrative Agent
may resign at any time by giving written notice thereof to the
Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, upon five
Business Days’ notice to the Borrower, to appoint a successor
Administrative Agent (who shall not be a non-resident of Canada
within the meaning of the Income Tax Act), subject to the approval
of the Borrower, such approval not to be unreasonably withheld. If
no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent’s giving of
notice of resignation then, upon five Business Days’ notice to the
Borrower, the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent (subject to
approval of the Borrower, such approval not to be unreasonably
withheld), which shall be a financial institution organized under
the laws of Canada having a combined capital and surplus of at least
Cdn.$500,000,000 or having a parent company with combined capital
and surplus of at least Cdn.$500,000,000.
	 
	 	(b)	 	Rights, Powers, etc. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative
Agent’s resignation or removal hereunder as Administrative Agent,
the provisions of this Article 8 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.



8.10              Lenders to Enforce through Administrative Agent. Each Lender hereby
acknowledges that, to the extent permitted by applicable Law, the Security
Documents and the remedies provided thereunder to the Lenders are for the
benefit of the Lenders collectively and







 


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acting together and not severally, and
further acknowledges that each Lender’s rights hereunder and under the Security
Documents are to be exercised collectively, not severally, by the
Administrative Agent upon the decision of the Required Lenders. Accordingly,
notwithstanding any of the provisions contained herein or in the Security
Documents, each of the Lenders hereby covenants and agrees that it shall not be
entitled to take any action hereunder or thereunder, including any declaration
of default hereunder or thereunder, but that any such action shall be taken
only by the Administrative Agent with the prior written agreement of the
Required Lenders, provided that, notwithstanding the foregoing, in the absence
of instructions from the Lenders (or the Required Lenders) and where in the
sole opinion of the Administrative Agent the exigencies of the situation so
warrant such action, the Administrative Agent may without notice to or consent
of the Lenders (or the Required Lenders) take such action on behalf of the
Lenders as it deems appropriate or desirable in the interests of the Lenders.
Each Lender hereby further covenants and agrees that upon any such written
consent being given by the Required Lenders, it shall co-operate fully with the
Administrative Agent to the extent requested by the Administrative Agent, and
each Lender further covenants and agrees that all proceeds from the realization
of the Security Documents, to the extent permitted by applicable Law, are held
for the benefit of all of the Lenders and shall be shared among the Lenders
rateably in accordance with this Agreement, and each Lender acknowledges that
all costs of any such realization (including all amounts for which the
Administrative Agent is required to be indemnified under the provisions hereof)
shall be shared among the Lenders rateably in accordance with this Agreement.
Each Lender covenants and agrees to do all acts and things and to make, execute
and deliver all agreements and other instruments, so as to fully carry out the
intent and purpose of this Section and each Lender hereby covenants and agrees
that it shall not seek, take, accept or receive any security for any of the
obligations and liabilities of the Borrower hereunder or under the other
Financing Documents, or any other document, instrument, writing or agreement
ancillary hereto or thereto, other than such security as is provided hereunder
or thereunder, unless all of the Lenders shall at the same time obtain the
benefit of any such security or agreement, as the case may be.


8.11              Quebec Security. For greater certainty, and without limiting the powers
of the Administrative Agent or the Collateral Agent, or any other Person acting
as an agent or
mandatary for such Agents hereunder or under any of the other Financing
Documents, the Borrower and the Parent hereby acknowledge that, for purposes of
holding any security granted by any Credit Party on property pursuant to the
laws of the Province of Quebec to secure obligations of the Borrower or any
other Credit Party under any bond issued by the Borrower or any other Credit
Party, the Collateral Agent shall be the holder of an irrevocable power of
attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code
of Quebec) for: (i) all present and future Lenders (including the Issuing Bank
and any Affiliate of the Issuing Bank that issues Letters of Credit); (ii) any
Affiliate of any Lender that may from time to time enter into Swap Agreements
with the Borrower, and (iii) any Lender or Person that makes available to the
Borrower Permitted Additional Exit Facility Debt. Each Lender, for itself and
on behalf of any of its Affiliates that enter into Swap Agreements with the
Borrower, the Issuing Bank (and any Affiliate of the Issuing Bank that issues
Letters of Credit) and any Person (including any Lender) that makes available
to the Borrower Permitted Additional Exit Facility







 


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Debt, hereby (i) irrevocably
constitutes, to the extent necessary the Collateral Agent as the holder of an
irrevocable power of attorney (fondé de pouvoir within the meaning of Article
2692 of the Civil Code of Québec) in order to hold hypothecs and security
granted by the Borrower or any other Credit Party on property pursuant to the
laws of the Province of Quebec to secure obligations of Borrower or any other
Credit Party under any bond issued by the Borrower or any other Credit Party;
and (ii) appoints and agrees that the Administrative Agent may act as the
bondholder and mandatary with respect to any bond that may be issued and
pledged from time to time for the benefit of the Lenders, the Persons that make
available Permitted Additional Exit Facility Debt, the Issuing Bank and any
Affiliate of the Issuing Bank that issues Letters of Credit and any Affiliates
of the Lenders that enter into Swap Agreements.


The constitution of the Collateral Agent as the holder of such irrevocable
power of attorney (fondé de pouvoir) and the Administrative Agent as bondholder
and mandatary with respect to any bond that may be issued and pledged from time
to time for the benefit of the Lenders, the Persons that make available
Permitted Additional Exit Facility Debt, the Issuing Bank and any Affiliate of
the Issuing Bank that issues Letters of Credit and any Affiliates of the
Lenders that enter into Swap Agreements shall be deemed to have been ratified
and confirmed as follows:



	(i)	 	 	by any assignee of a Lender (or an Issuing Bank and any Affiliate of the
Issuing Bank that issues Letters of Credit), by the execution of an
Assignment and Assumption;
	 
	(ii)	 	 	by any Person (including a Lender) that provides Permitted Additional
Exit Facility Debt, by the execution of a supplemental agreement hereto;
and
	 
	(iii)	 	 	by any Affiliate of a Lender that enters into Swaps Agreements, by the
execution of the Swap Agreements.



Notwithstanding the provisions of Section 32 of the An Act respecting the
special powers of legal persons (Quebec), the Administrative Agent or the
Collateral Agent may purchase, acquire and be the holder of any bond issued by
the Borrower or any other Credit Party (i.e. the fondé de pouvoir may acquire
and hold the first bond issued under any deed of hypothec by the Borrower
or any Credit Party). The Borrower and each Credit Party hereby acknowledge
that any such bond shall constitute a title of indebtedness, as such term is
used in Article 2692 of the Civil Code of Quebec.


The Collateral Agent herein appointed as fondé de pouvoir shall have the same
rights, powers and immunities as the Agents as stipulated herein, including
under this Section 8, which shall apply mutatis mutandis. Without limitation,
the provisions of Section 8.9 shall apply mutatis mutandis to the resignation
and appointment of a successor Collateral Agent acting as fondé de pouvoir.







 


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ARTICLE 9

MISCELLANEOUS



9.1              Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile in each case to the
addressee, as follows:



	 	(i)	 	if to the Borrower:




	 	 	 
	MICROCELL SOLUTIONS INC.	 	 
	800 de La Gauchetière Street West	 	 
	Suite 4000	 	 
	Montreal, Quebec	 	 
	H5A 1K3	 	 
	Attention:       Chief Financial Officer	 	
 
	Facsimile:       514.846.6959	 	
 




	 	(ii)	 	if to the Administrative Agent or the Collateral Agent:
	 
	 	 	 	JPMORGAN CHASE BANK, TORONTO BRANCH
	 	 	 	Suite 1800, South Tower
	 	 	 	Royal Bank Plaza
	 	 	 	200 Bay Street, P.O. Box 80
	 	 	 	Toronto, ON M5J 2J2
	 	 	 	Attention:        Vice President, Corporate Finance
	 	 	 	Facsimile:        416.981.9128
	 
	 	(iii)	 	if to any Lender or the Issuing Bank, to
it at its address (or facsimile number) set forth opposite
its name in the execution page(s) of this Agreement.



          (b)         Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to
Article 2 unless otherwise agreed by the Administrative Agent and the
applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communication to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.


          (c)         Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.







 


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9.2              Waivers; Amendments.



	 	(a)	 	No failure or delay by the Administrative Agent, the Issuing
Bank or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative
Agent, the Issuing Bank and the Lenders hereunder are cumulative and
are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section
9.2(b), and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the continuation,
conversion or rolling over of a Loan or the issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, the Issuing Bank or any Lender
may have had notice or knowledge of such Default at the time.
	 
	 	(b)	 	Neither this Agreement nor any other Financing Document (or
any provision hereof or thereof) may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and
the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the amount or
extend the expiry date of any Loan of any Lender without the prior
written consent of each Lender directly affected thereby, (ii)
reduce the principal amount of any Loan or reduce the rate of
interest or any fee applicable to any Loan without the prior written
consent of each Lender directly affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or
any interest thereon, or any fees payable in respect thereof, or
reduce the amount of, waive or excuse any such payment, without the
prior written consent of each Lender directly affected thereby, (iv)
change Section 2.12(b) or (c) in a manner that would alter the pro
rata sharing of payments required thereby, without the prior written
consent of each Lender directly affected
thereby, (v) change any of the provisions of this Section 9.2 or
the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive,
amend or modify any rights hereunder or make any determination or
grant any consent hereunder, without the prior written consent of
each Lender, or (vi) waive any Event of Default under Section 7.1
(h), (i) or (j) without the prior written consent of each Lender,
or (vii) release any Credit Party from any material obligations
under the Security Documents and other instruments contemplated by
this Agreement or release or discharge any of the Liens arising
under the Security Documents, in each case without the prior
written consent of each Lender; and








 






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	 	 	 	provided further that no such
agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent or the Issuing Bank, as the case
may be, without the prior written consent of the Administrative
Agent or the Issuing Bank, as applicable. For greater certainty,
the Administrative Agent may release and discharge the Liens
constituted by the Security Documents to the extent necessary to
enable the Borrower or any other Credit Party to complete any asset
sale which is not prohibited by this Agreement or the other
Financing Documents, and the Administrative Agent may agree to
amend or waive Section 2.2 of the Intercreditor Agreement with the
consent of the Required Lenders.



9.3              Expenses; Indemnity; Damage Waiver.



	 	(a)	 	The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and all applicable Taxes, in connection
with the syndication of the credit facilities provided for herein
and the preparation and administration of this Agreement and the
other Financing Documents, (ii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and applicable Taxes, in connection
with any amendments, modifications or waivers of the provisions
hereof or of any of the other Financing Documents, (whether or not
the transactions contemplated hereby or thereby shall be
consummated), and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent or any Lender, including
the fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent or any Lender and all
applicable Taxes, in connection with the enforcement or protection
of their rights in connection with this Agreement, including its
rights under this Section, or in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.
	 
	 	(b)	 	The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender, as well as each
Related Party and each assignee of
any of the foregoing Persons (each such Person and each such
assignee being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, cost recovery
actions, damages, expenses and liabilities of whatsoever nature or
kind and all reasonable out-of-pocket expenses (including due
diligence expenses, syndication expenses, travel expenses and
reasonable fees, charges and disbursements of counsel) and all
applicable Taxes to which any Indemnitee may become subject arising
out of or in connection with (i) the execution or delivery of the
Financing Documents or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective
obligations thereunder, and the consummation of the Transactions or
any other








 




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	 	 	 	transactions thereunder, (ii) any Loan or Letter of
Credit or any actual or proposed use of the proceeds therefrom,
including any refusal by the Issuing Bank to honour a demand for
payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms
of such Letter of Credit, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or
operated by any Credit Party, or any Environmental Liability
related in any way to any Credit Party, (iv) any actual or
prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a party
thereto, (v) any other aspect of this Agreement and the other
Financing Documents, or (vi) the enforcement of any Indemnitee’s
rights hereunder and any related investigation, defence,
preparation of defence, litigation and enquiries, in each case
regardless of whether or not the Transactions are consummated;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence (it being acknowledged that
ordinary negligence does not necessarily constitute gross
negligence) or wilful misconduct of or material breach of this
Agreement by such Indemnitee. No Indemnitee shall be liable for
any indirect or consequential damages in connection with its
activities related to the Loans nor shall any Credit Party be
liable for any indirect or consequential damages in connection with
its activities related to the Loans.
	 
	 	(c)	 	To the extent that the Borrower fails to pay any amount
required to be paid under Sections 9.3 (a) or (b), each Lender
severally agrees to pay to the Administrative Agent, the Issuing
Bank or the Collateral Agent (as applicable) such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent, the
Issuing Bank or the Collateral Agent, in its capacity as such.
	 
	 	(d)	 	The Borrower shall not assert, and hereby waives (to the
fullest extent permitted by applicable Law), any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, any
Financing Document, or any agreement or instrument contemplated
thereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
	 
	 	(e)	 	Any inspection of any property of any Credit Party made by or
through the Administrative Agent or any Lender is for purposes of
administration of this Agreement and the Financing Documents only,
and neither the Borrower nor any








 






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	 	 	 	other Credit Party is entitled to
rely upon the same (whether or not such inspections are at the
expense of the Borrower).
	 
	 	(f)	 	By accepting or approving anything required to be observed,
performed, fulfilled or given to the Administrative Agent or the
Lenders pursuant to the Financing Documents, neither the
Administrative Agent nor the Lenders shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition
thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect
thereto by the Administrative Agent or the Lenders.
	 
	 	(g)	 	The relationship between the Borrower and the Administrative
Agent and the Lenders is, and shall at all times remain, solely that
of borrower and lenders. Neither the Administrative Agent nor the
Lenders shall under any circumstance be construed to be partners or
joint venturers of the Borrower or its Affiliates. Neither the
Administrative Agent nor the Lenders shall under any circumstance be
deemed to be in a relationship of confidence or trust or a fiduciary
relationship with the Borrower or its Affiliates, or to owe any
fiduciary duty to the Borrower or its Affiliates. Neither the
Administrative Agent nor the Lenders undertake or assume any
responsibility or duty to the Borrower or its Affiliates to select,
review, inspect, supervise, pass judgment upon or inform the
Borrower or its Affiliates of any matter in connection with their
property or the operations of the Borrower or its Affiliates. The
Borrower and its Affiliates shall rely entirely upon their own
judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment or supply of information
undertaken or assumed by the Administrative Agent or the Lenders in
connection with such matters is solely for the protection of the
Administrative Agent and the Lenders, and neither the Borrower nor
any other Person is entitled to rely thereon.
	 
	 	(h)	 	The Administrative Agent, the Issuing Bank and the Lenders
shall not be responsible or liable to any Person for any loss,
damage, liability or claim of any kind relating to injury or death
to Persons or damage to Property caused by the actions, inaction or
negligence of any Credit Party or their Affiliates and the Borrower
hereby indemnifies and holds the Administrative Agent, the Issuing
Bank and the Lenders harmless on the terms set forth in Section
9.3(b) from any such loss, damage, liability or claim.
	 
	 	(i)	 	This Agreement is made for the purpose of defining and
setting forth certain obligations, rights and duties of the
Borrower, the Administrative Agent and the Lenders in connection
with the Loans, and is made for the sole benefit of the Borrower,
the Administrative Agent and the Lenders, and their respective
successors and permitted assigns. Except as provided in Sections
9.3(b) and 9.4, no other Person shall have any rights of any nature
hereunder or by reason hereof.








 






- 97 -




	 	(j)	 	All amounts due under this Section 9.3 shall be payable not
later than three Business Days after written demand therefor.



9.4              Successors and Assigns.



	 	(a)	 	The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i)
the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void), and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
	 
	 	(b)	 	Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement and the
other Financing Documents (including all or a portion of the Loans
at the time owing to it); provided that (i) except in the case of an
assignment to a Lender or any Lender Affiliate, the Borrower, the
Issuing Bank and the Administrative Agent must give their prior
written consent to such assignment (which consent shall not be
unreasonably withheld or delayed); provided further that the
Borrower’s consent shall not be required with respect to any
assignment made at any time after the occurrence and during the
continuance of an Event of Default, (ii) except in the case of an
assignment to a Lender or any Lender Affiliate, the aggregate amount
of the Loans of the assigning Lender subject to each such assignment
(determined as of the date on which the Assignment and Assumption
relating to such assignment is delivered to the Administrative
Agent) shall not be less than U.S.$ 3,500,000 (if in U.S. $) or
Cdn.$5,000,000 (if in Cdn. $), unless both the Borrower and the
Administrative Agent otherwise consent in writing, and the amount
held by each Lender after
each such assignment shall not be less than the minimum assignable
amount described in this section above, unless both the Borrower
and the Administrative Agent otherwise consent in writing, (iii)
each partial assignment in respect of any assigned Loans shall be
made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement in respect of
such Loans, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption,
together with (except in the case of an assignment by a Lender to
an Affiliate of such Lender) a processing and recordation fee of
Cdn.$5,000, payable by the assigning Lender, (v) the








 






- 98 -




	 	 	 	assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire, and (vi) the Borrower shall not
incur any increased costs merely due to any such assignment
including any obligation to make any payment under Section 2.11
that would exceed the amount payable to the assigning Lender. The
Administrative Agent shall provide the Borrower and each Lender
with written notice of any change in (or new) address of a Lender
disclosed in an Administrative Questionnaire. Subject to
acceptance and recording thereof pursuant to Section 9.4(c), from
and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and
Assumption, shall have all of the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.9, 2.10
and 2.11 and 9.3). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply
with this Section 9.4 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 9.4(d). The
Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Toronto, Ontario
a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the
Lenders, and the Commitment of, and the principal amount of the
Loans and LC Disbursements owing to each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender at any reasonable time and from time to
time upon reasonable prior notice.
	 
	 	(c)	 	Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
Section 9.4(b) and any written consent to such assignment required
by Section 9.4(b), the Administrative Agent shall accept such
Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the
Register as provided in Section 9.4(b).








 






- 99 -




	 	(d)	 	Any Lender may, without notice to the Borrower or the consent
of the Borrower or the Administrative Agent or the Issuing Bank,
sell participations to one or more Persons (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this
Agreement and the other Financing Documents (including all or a
portion of the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, and (iii) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section
9.2(b) that affects such Participant. Subject to Section 9.4(e),
the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.9, 2.10 and 2.11 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant
to this Section 9.4(d). To the extent permitted by Law, each
Participant also shall be entitled to the benefits of Section 9.8 as
though it were a Lender, provided that such Participant agrees to be
subject to Section 2.12(c) as though it were a Lender.
	 
	 	(e)	 	A Participant shall not be entitled to receive any greater
payment under Section 2.9 or 2.10 than the applicable Lender would
have been entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A
Participant shall not be entitled to receive any greater amount
under Section 2.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant.
	 
	 	(f)	 	Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and
Section 9.4 shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.
	 
	 	(g)	 	Any assignment or grant of a participation pursuant to
Section 9.4 shall constitute neither a repayment by the Borrower to
the assigning or granting Lender of any Loan included therein, nor a
new advance of any such Loan to the Borrower by such Lender or by
the assignee or Participant, as the case may be. The parties








 






- 100 -




	 	 	 	
acknowledge that the Borrower’s obligations hereunder with respect
to any such Loans will continue and will not constitute new
obligations as a result of such assignment or participation.



9.5              Survival. All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments delivered
in connection with or pursuant to this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution
and delivery of this Agreement and the making of any Loans and the issuance of
any Letters of Credit, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or been terminated.
Sections 2.9, 2.10 or 2.11 and 9.3 and Article 8 shall survive and remain in
full force and effect, regardless of the consummation of the Transactions, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.


9.6              Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and the other
Financing Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent, constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.1, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed original or faxed counterpart of a signature page of this Agreement by
facsimile shall be as effective as delivery of a manually executed original
counterpart of this Agreement.


9.7              Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof, and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.


9.8              Right of Set Off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any







 






- 101 -



time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower or any
other Credit Party against any and all of the obligations of the Borrower now
or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of set off) which such Lender may have.


9.9              Governing Law; Jurisdiction; Consent to Service of Process.



	 	(a)	 	This Agreement shall be construed in accordance with and
governed by the Laws of the Province of Ontario.
	 
	 	(b)	 	The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the non-exclusive jurisdiction of
the Courts of the Province of Ontario, and any appellate court
thereof, in any action or proceeding arising out of or relating to
this Agreement, or any other Financing Document or for recognition
or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined
in Ontario. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or
any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Financing Document against
the Borrower or its properties in the courts of any other
jurisdiction.
	 
	 	(c)	 	The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in Section 9.9(b). Each of the
parties hereto hereby irrevocably waives, to the fullest extent
permitted by Law, any forum non conveniens defence to the
maintenance of such action or proceeding in any such court.
	 
	 	(d)	 	Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.1.
Nothing in this Agreement will affect
the right of any party to this Agreement to serve process in any
other manner permitted by Law.



9.10              WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER FINANCING DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR







 


- 102 -



THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


9.11              Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement
and shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.


9.12              Confidentiality. The Administrative Agent, the Issuing Bank, the
Collateral Agent and each Lender agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
each of their Affiliates, directors, officers, employees, agents and advisors,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority or other
Governmental Authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies under
any Financing Document or any suit, action or proceeding relating to any
Financing Document or the enforcement of rights thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any actual or prospective assignee of or Participant in any of
its rights or obligations under this Agreement, or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower, or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section, or (ii) becomes
available to the Administrative Agent, the Issuing Bank, the Collateral Agent
or any Lender on a non-confidential basis from a source other than the
Borrower. For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower, any of its
subsidiaries, or their respective business, other than any such information
that is available to the Administrative Agent, the Issuing Bank, the Collateral
Agent or any Lender on a non-confidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly
identified as confidential in writing at the time of delivery. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.


[Balance of page intentionally left blank; signature page follows.]








 



TRANCHE A EXIT FACILITY AGREEMENT


S-1



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.



	 	 	 
	BORROWER	 	
PARENT
	 	 	 
	MICROCELL SOLUTIONS INC.	 	
MICROCELL TELECOMMUNICATIONS INC.




	 	 	 	 	 
	By:	

	 	 	 
	 	 	 	By:
	

	By:	

	 	 	 
	 	 	 	By:
	




AGENTS



JPMORGAN CHASE BANK TORONTO

BRANCH, as Administrative Agent under the

Tranche A Exit Facility Agreement and as

Collateral Agent



	 	 
	By:	


	 	 
	By:	





 






 



TRANCHE A EXIT FACILITY AGREEMENT


S 2



TRANCHE A LENDERS



	 	 	 	 	 
	 	 	
 
	Address:    (Please complete)
	 	 	 	 	 
	

(Type or print name of Lender)	 	
Street Address:
	 
	
 	 	
 	

	 	 	 	 	 
	 	 	 	 	

	By:	



	 	City:
	


	Name:	



	 	Province/State:
	


	Title:	



	 	Postal/Zip Code:
	


	By:	



	 	Country:
	


	Name:	



	 	Contact:
	


	Title:	


	 	Phone:
	


	 	 	 	Fax:
	


	 	 	 	E-mail:
	





 






 



SCHEDULE A



COMMITMENTS




	 	 	 
	Lender	 	
Commitment
	 	 	 
	JPMorgan Chase Bank, Toronto Branch	 	
Cdn.$25,000,000




 










 



SCHEDULE B



DISCLOSED MATTERS



[Note: The numbers in parentheses denote the provision of the Credit Agreement
which 
refers to this Schedule B.]



Governmental Approvals (3.3)




	1.	 	None



Litigation (3.5)




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



Real Property and Office and Switchroom Leases (3.8)


OWNED REAL PROPERTIES


Immovable Properties


Québec Property



	 	 	 	Le lot UN MILLION DEUX CENT CINQUANTE SEPT MILLE CINQ CENT TREIZE
(1 257 513) du cadastre du Québec, circonscription foncière de
Québec.



Nicolet Property




	 	 	 	Un immeuble situé dans le secteur St-Grégoire de Ville de
Bécancour, connu et désigné comme étant le lot numéro SEIZE de la
subdivision officielle du lot originaire numéro CINQUANTE-NEUF
(59-16) du cadastre de la Paroisse de St-Grégoire, circonscription
foncière de Nicolet.



Hull Property




	 	 	 	Un immeuble situé en la Municipalité de Gatineau, connu et désigné
comme étant le lot numéro UN MILLION TROIS CENT SOIXANTE-TREIZE
MILLE TROIS CENT SOIXANTE-DOUZE (1 373 372) du Cadastre du Québec,
circonscription foncière de Hull.



 






 






- 2 -

	Trois-Rivières Property
	 
	 	 	 	Un immeuble situé en la Municipalité de Pointe-du-Lac connu et
désigné comme étant le lot DEUX MILLIONS TROIS CENT TRENTE ET UN
MILLE SEPT CENT TRENTE-NEUF (2 331 739) du cadastre du Québec,
circonscription foncière de Trois-Rivières.



L’Assomption Property




	 	(a)	 	Le lot numéro TRENTE-DEUX de la subdivision
officielle du lot originaire numéro TROIS CENT QUARANTE-HUIT
(348-32) du cadastre officiel de la Paroisse de
Saint-Henri-de-Mascouche, circonscription foncière de
l’Assomption.
	 
	 	(b)	 	Le lot numéro DIX-NEUF de la subdivision
officielle du lot originaire numéro TROIS CENT QUARANTE-NEUF
(349-19) dudit cadastre.



Champlain Property




	 	 	 	Un immeuble situé en la Municipalité de Saint-Louis-de-France,
connu et désigné comme étant une partie du lot SOIXANTE-CINQ (Ptie
65) du cadastre de la Paroisse de Saint-Maurice, circonscription
foncière de Champlain, de figure irrégulière, dont les tenants et
aboutissants sont:
	 


	 	-	 	vers le nord-est, par la rue Courteau (montré à
l’originaire) et par une partie du lot 65, rue Courteau; vers
le sud-est, par une partie du lot 65; vers le sud-ouest, par
le lot 67-1 et par une partie du lot 67; vers le nord-ouest,
par le rang St-Alexis (montré à l’originaire);
	 


	 	 	 	Rattachement :
	 
	 	 	 	Le coin nord de ce lot correspond au coin nord du lot 65;
	 
	 	 	 	Dimensions :




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DIRECTION	 	LONGUEUR	 	 	 	 
	LIGNE	 	GÉODÉSIQUE	 	MÈTRES	 	LIMITE
	
	 	
	 	
	 	

	10261-23847
	 	 	136°50’20”	 	 	 	286,61	 	 	nord-est
	23847-10257
	 	 	146°27’10”	 	 	 	30,91	 	 	nord-est
	10257-10258
	 	 	136°57’15”	 	 	 	49,76	 	 	nord-est
	10258-10223
	 	 	220°050’30”	 	 	 	147,36	 	 	sud-est
	10223-10124
	 	 	316°033’25”	 	 	 	375,25	 	 	sud-ouest
	10124-10261
	 	 	440°13’53”	 	 	 	153,82	 	 	nord-ouest




	 	 	 	Superficie de : 56 305,1 mètres carrés.



 






 






- 3 -


	 	 	 	Le tout tel que montré par un liséré rouge sur le plan préparé par
Pierre Roy, arpenteur-géomètre, le 13 octobre 2000, sous le numéro
50408 de ses dossiers et sous le numéro 3488 de ses minutes.



Terrebonne Property




	 	 	 	Un immeuble situé en la Ville de Blainville, connu et désigné comme
étant le lot un million neuf cent sept mille sept cent
soixante-sept (1 907 767) du Cadastre du Québec, circonscription
foncière de Terrebonne.
	 
	 	With all the buildings thereon erected, and as the said properties now
subsist with all its rights, members and appurtenances, without exception
or reserve of any kind and together with and subject to all servitudes,
continued or discontinued, apparent or non apparent, attached thereto.



Servitudes




	 	All of the Borrower’s rights, title and interest in, to and pursuant to
the following servitudes affecting the immovable properties described
hereunder:



Sainte-Agathe-des-Monts Servitude




	 	 	 	Une servitude de droit de passage pour le bénéfice de la tour, des
constructions et ouvrages appartenant à Microcell Connexions Inc.,
identifiés comme étant le Fonds Dominant, sur la lisière ci-après
désignée, étant le Fonds Servant, à savoir :



Fonds Servant




	 	(a)	 	Le lot quarante-deux de la subdivision officielle
du lot originaire quatre (4-42), Rang 3, Canton de Beresford,
cadastre officiel de la Paroisse de Sainte-Agathe-des-Monts,
circonscription foncière de Terrebonne, (ledit lot connu comme
étant la rue Panorama);
	 
	 	(b)	 	Une partie du lot cent quarante-quatre de la
subdivision officielle du lot originaire quatre (4-144) Rang
3, Canton Beresford, dudit cadastre, décrite comme suit :
	 
	 	 	 	De figure trapézoïdale, indiquée par les nombres 1, 2, 3 et 4
sur le plan préparé par François Houle, arpenteur-géomètre,
le 25 octobre 2000, sous le numéro 2655 de ses minutes,
commençant au point « 1 » étant situé au coin sud-est du lot
4-144 du Rang III du Canton de Beresford, ladite parcelle est
bornée et décrite comme suit :
	 
	 	-	 	vers le sud-ouest, la ligne 1-2, par le lot 4-145
et mesurant le long de cette limite quarante-quatre mètres et
trois centièmes (44,03m) suivant une ligne ayant un gisement
de 298°21’23’’.



 






 



- 4 -






	 	-	 	vers le nord-ouest, la ligne 2-3, par une partie
du lot 5A et mesurant le long de cette limite quatre mètres et
soixante-neuf centièmes (4,69m) suivant une ligne ayant un
gisement de 15°25’26’’.
	 
	 	-	 	vers le nord-est, la ligne 3-4, par le résidu du
lot 4-144 et mesurant le long de cette limite quarante-trois
mètres et quatre-vingt-douze centièmes (43,92m) suivant une
ligne ayant un gisement de 118°21’23’’.
	 
	 	-	 	vers le sud-est, la ligne 4-1, par le lot 4-42
(rue Panorama) et mesurant le long d’un arc quatre mètres et
soixante-treize centièmes (a :4,73m) ayant un rayon de vingt
mètres (r :20,00m).
	 



	 	Superficie : 200,5 mètres carrés.	 	 




Fonds Dominant




	 	La tour, les constructions et ouvrages sont érigés sur
l’emplacement suivant :
	 


	 	(a)	 	Une partie du lot cinq a (Ptie 5A), Rang 3,
Canton Beresford, cadastre officiel de la Paroisse de
Sainte-Agathe-des-Monts, circonscription foncière de
Terrebonne, décrite comme suit :
	 
	 	 	 	De figure irrégulière, indiquée par les nombres 2, 5, 6, 7, 8
et 3 sur ledit plan, commençant au point « 2 » étant situé au
coin sud-ouest du lot 4-144 du Rang III du Canton de
Beresford, ladite parcelle est bornée et décrite comme suit :
	 
	 	-	 	vers le sud-ouest, la ligne 2-5 sur ledit plan,
par une autre partie du lot 5A et mesurant le long de cette
limite huit mètres et cinq centièmes (8,05m) suivant une ligne
ayant un gisement de 298°21’23’’.
	 
	 	-	 	vers l’ouest, la ligne 5-6 sur ledit plan, par
une autre partie du lot 5A et mesurant le long de cette limite
cent trente-cinq mètres et cinq centièmes (135,05m) suivant
une ligne ayant un gisement de 0°04’07’’.
	 
	 	-	 	vers le Nord, la ligne 6-7 sur ledit plan, par
une autre partie du lot 5A décrite plus bas, et mesurant le
long de cette limite quatre mètres et soixante centièmes
(4,60m) suivant une ligne ayant un gisement de 96°19’15’’.
	 
	 	-	 	vers l’est, la ligne 7-8 sur ledit plan, par une
autre partie du lot 5A et mesurant le long de cette limite
cent trente et un mètres et quatre-vingt-deux centièmes
(131,82m) suivant une ligne ayant un gisement de 180°04’07’’.
	 
	 	-	 	vers le nord-est, la ligne 8-3 sur ledit plan,
par une autre partie du lot 5A et mesurant le long de cette
limite quatre mètres et vingt-sept centièmes (4,27m) suivant
une ligne ayant un gisement de 118°21’23’’.



 






 






- 5 -


	 	-	 	vers le sud-est, la ligne 3-2 sur ledit plan, par
le résidu du lot 4-144 et mesurant le long de cette limite
quatre mètres et soixante-neuf centièmes (4,69m) suivant une
ligne ayant un gisement de 195°25’26’’.
	 


	 	Superficie : 638,0 mètres
carrés.


	 
	 	(b)	 	Une partie du lot cinq a (Ptie 5A), Rang 3,
Canton de Beresford, dudit cadastre, décrite comme suit :
	 
	 	 	 	De figure carrée, indiquée par les nombres 6, 9, 10 et 11 sur
ledit plan, commençant au point « 6 », rattaché précédemment,
ladite parcelle est bornée comme suit :
	 
	 	-	 	vers l’est, la ligne 6-9 sur ledit plan, par une
autre partie du lot 5A et mesurant le long de cette limite six
mètres et dix-huit centièmes (6,18m) suivant un ligne ayant un
gisement de 6°19’15’’.
	 
	 	-	 	vers le nord, la ligne 9-10 sur ledit plan, par
une autre partie du lot 5A et mesurant le long de cette limite
six mètres et dix-huit centièmes (6,18m) suivant une ligne
ayant un gisement de 96°19’15’’.
	 
	 	-	 	vers l’est, la ligne 10-11 sur ledit plan, par
une partie du lot 5A et mesurant le long de cette limite six
mètres et dix-huit centièmes (6,18m) suivant une ligne ayant
un gisement de 186°19’15’’.
	 
	 	-	 	vers le sud, la ligne 11-6 sur ledit plan, par
une autre partie du lot 5A et mesurant le long de cette limite
six mètres et dix-huit centièmes (6,18m) suivant une ligne
ayant un gisement de 276°19’15’’.
	 


	 	 	 	Superficie : 8,2 mètres carrés.»
	 
	 	 	 	Pursuant to a Deed of Right of Way entered into between Chalets
Chanteclair Inc. and Microcell Connexions Inc., which right of way
is registered on November 29, 2000 at the Land Registration
Division of Terrebonne under number 1244541.



Lévis Servitude




	 	 	 	Une servitude de droit de passage pour le bénéfice de la tour, des
constructions et ouvrages appartenant à Microcell Connexions Inc.,
identifiés comme étant le Fonds Dominant, sur la lisière ci-après
désignée, étant le Fonds Servant, à savoir :



Fonds Servant




	 	(a)	 	Une partie du lot QUARANTE-trois (Ptie 43) du
cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon,
circonscription foncière de Lévis, désignée comme suit :



 






 






- 6 -


	 	 	 	De figure irrégulière, indiquée par les nombres 1 à 6 du plan
préparé par François Houle, arpenteur-géomètre, le 1er mai
2001, sous le numéro 3138 de ses minutes, commençant au point
« 1 » étant l’intersection entre la ligne séparative des lots
42 et 43 avec la limite SUD-EST de l’emprise du Chemin
Sainte-Anne Est (une partie du lot 43), ladite parcelle est
bornée et décrite comme suit :
	 
	 	-	 	vers le NORD-EST, par une partie du lot 42, dans
une première ligne 1-2, et mesurant le long de cette limite
quatre-vingt-quatre mètres et quatre-vingt-deux centièmes
(84,82m) suivant une ligne ayant un gisement de 134°57’29’’;
dans une deuxième ligne 2-3, et mesurant le long de cette
limite deux cent quarante-huit mètres et vingt et un centièmes
(248,21m) suivant une ligne ayant un gisement de 133°48’58’’.
	 
	 	-	 	vers le sud-est, la ligne 3-4, par une autre
partie du lot 43 et mesurant le long de cette limite dix
mètres et quatre centièmes (10,04m) suivant une ligne ayant un
gisement de 228°48’58’’.
	 
	 	-	 	vers le sud-ouest, par une autre partie du lot
43, dans une première ligne 4-5, et mesurant le long de cette
limite deux cent quarante-sept mètres et quarante-quatre
centièmes (247,44m) suivant une ligne ayant un gisement de
313°48’58’’; dans une deuxième ligne 5-6, et mesurant le long
de cette limite soixante-dix-huit mètres et quatre-vingt-sept
centièmes (78,87m) suivant une ligne ayant un gisement de
314°57’29’’.
	 
	 	-	 	vers le Nord-ouest, la ligne 6-1, par une autre
partie du lot 43, étant le Chemin Sainte-Anne Est et mesurant
le long de cette limite onze mètres et soixante-neuf centièmes
(11,69m) suivant une ligne ayant un gisement de 13°46’34’’.
	 


	 	Superficie : 3 296,7 mètres carrés


	 
	 	(b)	 	Une partie du lot QUARANTE-TROIS (Ptie 43) dudit
cadastre, désignée comme suit :
	 
	 	 	 	De figure parallélogrammique, indiquée par les nombres 3, 4,
7 et 8 sur ledit plan, commençant au point « 3 » précédemment
rattaché, ladite parcelle est bornée et décrite comme suit :
	 
	 	-	 	vers le nord-est, la ligne 3-7, par une partie du
lot 42 décrite plus bas, et mesurant le long de cette limite
dix mètres et quatre centièmes (10,04m) suivant une ligne
ayant un gisement de 133°48’58’’.
	 
	 	-	 	vers le sud-est, la ligne 7-8, par une autre
partie du lot 43 et mesurant le long de cette limite dix
mètres et quatre centièmes (10,04m) suivant une ligne ayant un
gisement de 228°48’58’’.



 






 






- 7 -


	 	-	 	vers le sud-ouest, la ligne 8-4, par une autre
partie du lot 43 et mesurant le long de cette limite dix
mètres et quatre centièmes (10,04m) suivant une ligne ayant un
gisement de 313°48’58’’.
	 
	 	-	 	vers le nord-ouest, la ligne 4-3, par une autre
partie du lot 43, décrite précédemment, et mesurant le long de
cette limite dix mètres et quatre centièmes (10,04m) suivant
une ligne ayant un gisement de 48°48’58’’.
	 


	 	 	 	Superficie : 100,4 mètres carrés.



Fonds Dominant




	 	 	 	La tour, les constructions et ouvrages sont érigés sur
l’emplacement suivant :
	 


	 	(a)	 	Une partie du lot quarante-deux (Ptie 42) du
cadastre officiel de la Paroisse de Saint-Étienne-de-Lauzon,
circonscription foncière de Lévis, désignée comme suit :
	 
	 	 	 	De figure carrée, indiquée par les nombres 11, 12, 14 et 15
sur ledit plan, commençant au point « 11 » ci-après rattaché,
ladite parcelle est bornée et décrite comme suit :
	 
	 	-	 	vers le NORD-OUEST, la ligne 11-14, par une autre
partie du lot 42, et mesurant le long de cette limite six
mètres et quatre-vingt-seize centièmes (6,96m) suivant une
ligne ayant un gisement de 49°43’36’’.
	 
	 	-	 	vers le Nord-est, la ligne 14-15, par une autre
partie du lot 42, et mesurant le long de cette limite six
mètres et quatre-vingt-seize centièmes (6,96m) suivant une
ligne ayant un gisement de 139°43’36’’.
	 
	 	-	 	vers le sud-est, la ligne 15-12, par une autre
partie du lot 42, et mesurant le long de cette limite six
mètres et quatre-vingt-seize centièmes (6,96m) suivant une
ligne ayant un gisement de 229°43’36’’.
	 
	 	-	 	vers le sud-ouest, la ligne 12-11, par une autre
partie du lot 42, et mesurant le long de cette limite six
mètres et quatre-vingt-seize centièmes (6,96m) suivant une
ligne ayant un gisement de 319°43’36’’.
	 


	 	 	 	Superficie : 48,4 mètres carrés.
	 


	 	(b)	 	Une partie du lot QUARANTE-DEUX (Ptie 42) dudit
cadastre, désignée comme suit :
	 
	 	 	 	De figure irrégulière, indiquée par les nombres 3, 9, 10, 11,
12 et 13 sur ledit plan, commençant au point « 3 », ci-après
rattaché, ladite parcelle est bornée et décrite comme suit :
	 
	 	-	 	vers le nord-ouest, la ligne 3-9, par une autre
partie du lot 42 et mesurant le long de cette limite dix
mètres et quatre centièmes (10,04m) suivant une ligne ayant un
gisement de 48°48’58’’.



 






 






- 8 -


	 	-	 	vers le nord-est, la ligne 9-10, par une autre
partie du lot 42 et mesurant le long de cette limite cent
seize mètres et quatre-vingt-six centièmes (116,86m) suivant
une ligne ayant un gisement de 133°48’58’’.
	 
	 	-	 	vers le nord-ouest, la ligne 10-11, par une autre
partie du lot 42 et mesurant le long de cette limite cinquante
mètres et soixante-douze centièmes (50,72m) suivant une ligne

ayant un gisement de 49°43’36’’.
	 
	 	-	 	vers le nord-est, la ligne 11-12, par une autre
partie du lot 42, décrite plus haut, et mesurant le long de
cette limite six mètres et quatre-vingt-seize centièmes
(6,96m) suivant une ligne ayant un gisement de 139°43’36’’.
	 
	 	-	 	vers le sud-est, la ligne 12-12, par une autre
partie du lot 42, et mesurant le long de cette limite soixante
mètres et six centièmes (60,06m) suivant une ligne ayant un
gisement de 229°43’36’’.
	 
	 	-	 	vers le sud-ouest, la ligne 13-3, par une partie
du lot 43, et mesurant le long de cette limite
cent-vingt-trois mètres et soixante-dix centièmes (123,70m)
suivant une ligne ayant un gisement de 313°48’58’’.
	 


	 	 	 	Superficie : 1 588,3 mètres carrés.»
	 
	 	 	 	Pursuant to a Deed of Right of Way entered into between Mr. Roch
Desrochers and Microcell Connexions Inc., which right of way is
registered on July 11, 2001 at the Land Registration Division of
Levis under number 452431.



Office and Switchroom Leases




	 	(a)	 	Office space situated on the 4th, 9th, 10th and 11th Floors
at the building located at 1250 Rene Levesque Boulevard West,
Montreal, Quebec, containing an area of approximately 124,500 square
feet pursuant to a Sublease Agreement between IBM Canada Limited as
Sublessor, Societe en Commandite Douze-Cinquante/Twelve-Fifty
Company Limited, as Lessor and Microcell 1-2-1 Inc. (now known as
Microcell Telecommunications Inc.) as Subtenant dated as of the 3rd
day of February, 1995 as amended by an Amendment to Sublease dated
March 28, 1996 and by a Second Amendment to Sublease dated November
22, 1996. The 11th and 9th floor has been sub-leased to Cap Gemini
Ernst & Young starting January 1, 2003 and March 1, 2003
respectively. (A portion of the 10th floor representing half of the
floor will also be sub-leased by Cap Gemini at a later date).
	 
	 	(b)	 	Office space situated on the 20th and 21st floors of the
building located at 1250 René-Lévesque Boulevard West, Montreal,
Quebec, containing an area of approximately 47,403 square feet
pursuant to a Sublease Agreement between Bowater Pulp & Paper
(Canada) Inc. as Sublessor, and Parent as Subtenant dated as of the
17th day of December 1998. The 20th floor has been sub-leased to PSP
starting December 1, 2002.



 






 






- 9 -


	 	(c)	 	Office space situated on Level A and part of Level B & C at
the building located at 800 de la Gauchetière West, Montreal,
Quebec, containing an area of approximately 317,000 square feet
pursuant to an Offer to Lease entered into between Place Bonaventure
Inc. (now known as WPBI Property Management Inc.), as Lessor and
Parent, as Tenant dated as of July 14th 1998, as amended by
Amendments to Lease dated March 22, 1999, October 1, 2000 and June
15, 2001. A portion of level C representing 12,796 square feet has
been canceled, without penalty, on July 1, 2002. The rest of Level C
which represents 42,204 square feet is under negotiation for a
sub-lease by January 1, 2003;
	 
	 	(d)	 	Office space situated on the 17th Floor of the building
located at 20 Bay Street, Toronto, Ontario containing an area of
approximately 21,350 square feet pursuant to a Lease with Omers
Realty Co. made as of February 1, 1996 as amended by Lease Amending
Agreements made as of May 1, 1997, May 26, 1997 and June 1, 1997.
	 
	 	(e)	 	Office space situated on the 5th and 8th Floors of the
building located at 815 West Hastings Street, Vancouver, British
Columbia, containing an area of approximately 14,000 square feet,
pursuant to a Lease entered into between Investors Group Trust Co.
Ltd. and Parent as of March 22, 1996. Since June 14, 2002 the
office space has been reduced to 12,437 square feet and renewed
until June 14, 2005.
	 
	 	(f)	 	Office space situated on the 20th floor of the building
located at 500 – 4th Avenue S.W., Calgary, Alberta, containing an
area of approximately 10,253 square feet, pursuant to a Lease
entered into between O&Y Properties Inc. and Grosvenor Canada
Limited and Parent as of February 7, 2001. This office space has
been sub-leased to Integrated Data Corporation starting July 1,
2003.
	 
	 	(g)	 	Office space situated at 891 Charest blvd, suite 201, Quebec,
Quebec, containing an area of approximately 3,875 square feet,
pursuant to a Lease entered into between Téléimmeuble Inc. and
Parent as of January 2000;
	 
	 	(h)	 	Switch Room and computer room space situated on the 5th Floor
of the building located at 1250 Rene Levesque Boulevard West,
Montreal, Quebec containing an area of approximately 8,642 square
feet, pursuant to a Sublease dated as of February 3, 1995 between
IBM Canada Limited as Sublessor, Societe en Commandite
Douze-Cinquante/Twelve-Fifty Company Limited as Lessor and Microcell
1-2-1 Inc. (now known as Microcell Telecommunications Inc.) as
Subtenant which Sublease Agreement was assigned as of March 31, 1996
and amended by an Amendment to Sublease dated April 19, 1996 and by
an Second Amendment to sublease dated October 9, 2002;
	 
	 	(i)	 	Switch Room space situated on part of the 2nd Floor of the
building located at 10 Bay Street, Toronto, Ontario, containing an
area of approximately 8,663 square feet, pursuant to a Lease entered
into between Omers Realty Co. and Microcell Telecommunications Inc.
dated February 1, 1996 which Lease was assigned to



 






 






- 10 -


	 	 	 	Borrower as of March 31, 1996 and amended by a Lease Amending
Agreement to the Lease effective July 1, 1997;
	 
	 	(j)	 	Switch Room space situated on the 3rd Floor of the building
located at 815 West Hastings Street, Vancouver, British Columbia,
containing an area of approximately 4,788 square feet, pursuant to a
Lease entered into between Investors Group Trust Co. Ltd. and
Microcell Telecommunications Inc. dated March 22, 1996 which Lease
was assigned to Borrower as of March 31, 1996;
	 
	 	(k)	 	Switch Room space situated on part of the 5th Floor of the
building located at 630 Third Avenue South West, Calgary, Alberta,
containing an area of approximately 6,280 square feet, pursuant to
an Offer to Lease entered into between Shaw Communications Inc. and
Borrower dated August 8, 1997;
	 
	 	(l)	 	Switch Room space situated on Level A of the building located
at 800 de la Gauchetière West, Montreal, Quebec, containing an area
of approximately 15,594 square feet, pursuant to a Lease Agreement
dated March 16th, 1999 and August 1, 2001 between WPBI Property
Management Inc. and Borrower;
	 
	 	(m)	 	Switch Room space situated on the 5th floor of the building
located at 2 Robert - Specks Park Way, Mississauga, Ontario,
containing an area of approximately 10,627 square feet, pursuant to
a Lease Agreement dated November 1, 2000 between Clarica Life
Insurance Company and Canadian Partners Fund Inc. (as Lessor) and
Borrower; and
	 
	 	(n)	 	Switch Room space situated on the 1st floor of the building
located at 555 sixth street, NewWestminster, British Columbia,
containing an area of approximately 10,644 square feet, pursuant to
a Lease Agreement dated as of November 22, 2000 between Canacemal
Investment Inc. and Borrower.



Compliance with Laws and Agreements (3.6) and Defaults (3.12)


1.     Defaults under the Credit Agreement and the Notes (as these terms are
defined in the Plan of Arrangement); on the Effective Date of the Plan of
Arrangement these defaults will be cured pursuant to section 6.18 of the Plan
of Arrangement.


Subsidiaries (3.14)




	1.	 	2861399 Canada Inc. (Pre-Filing Parent and wholly-owned subsidiary of
Microcell Telecommunications Inc.)
	 
	2.	 	Inukshuk Internet Inc. (wholly-owned subsidiary of Borrower and
Unrestricted Subsidiary)
	 
	3.	 	Telcom Investments Inc. (wholly-owned subsidiary of Borrower and
Unrestricted Subsidiary)



 






 



- 11 -


Material Contracts (3.16)




	1.	 	Tranche B Credit Agreement.
	 
	2.	 	Tranche C Credit Agreement.



Environmental Matters (3.17)




	1.	 	None



Employee Matters (3.18)




	 	1.	 	     Employment Agreement with Alain Rhéaume, President and Chief
Operating Officer of the Borrower, providing for an indemnity of 24
months in the event of dismissal without reasonable cause.
	 
	 	2.	 	     Employment Agreement with André Tremblay, President and Chief
Executive Officer of Parent, providing for an indemnity of 24 months in
the event of dismissal without reasonable cause.
	 
	 	3.	 	     Employment Agreement with Jacques Leduc, Chief Financial Officer
and Treasurer of Parent, providing for an indemnity of 24 months in the
event of dismissal without reasonable cause before September 30, 2004.
	 
	 	4.	 	     Retention program for key employees disclosed in Appendix G of the
Information Circular.








 


- 12 -



Intellectual Property Rights (3.20)




	1.	 	Registered Trade Marks:




	 	(a)	 	FIDO registered by Borrower on April 28, 1997, registration
no. TMA475,321;
	 
	 	(b)	 	FIDO registered in the United Sates by Borrower on December
11, 2001, registration no. 2,517,638;
	 
	 	(b)	 	FIDO & DESIGN registered by Borrower on February 2, 1998,
registration no. TMA489,000;
	 
	 	(c)	 	FIDO & DESIGN registered in the United States by Borrower on
April 16, 2002, registration no. 2,560,921;
	 
	 	(c)	 	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on
February 21, 2001, registration no. TMA541,416;
	 
	 	(b)	 	FIDOMATIC registered by Borrower on June 11, 2001,
registration no. TMA546,433;
	 
	 	(c)	 	FIDO (CARACTÈRES CHINOIS) DESIGN registered by Borrower on
April 19, 2002, registration no. TMA560,471;
	 
	 	(d)	 	FIDOMATIC & DESIGN registered by Borrower on June 12, 2001,
registration no. TMA546,451;
	 
	 	(e)	 	FIDOMATIC & DESIGN registered in the United States by
Borrower on December 17, 2002, registration no. 2 661 037
	 
	 	(f)	 	FIDO C’EST VOUS LE MAÎTRE & DESIGN registered by Borrower on
March 13, 2001, registration no. TMA542,267;
	 
	 	(g)	 	FIDO YOU ARE THE MASTER & DESIGN registered by Borrower on
March 13, 2001, registration no. TMA542,265;
	 
	 	(h)	 	FIDO & DESIGN registered by Borrower on February 26, 2001,
registration number TMA541,562;
	 
	 	(i)	 	FIDOPRO registered by Borrower on February 27, 2001,
registration no. TMA541,653;
	 
	 	(j)	 	INSTANT REPLY registered by Borrower on June 11, 2001,
registration no. TMA546,429;



 






 






- 13 -


	 	(k)	 	RÉPONSE ÉCLAIR registered by Borrower on June 11, 2001,
registration no. TMA546,430;
	 
	 	(l)	 	LA MESSAGERIE VOCALE PERFORMANCE registered by Borrower on
June 12, 2001, registration no. TMA546,480;
	 
	 	(m)	 	FIDO E-MAIL registered by Borrower on June 12, 2001,
registration no. TMA546,477;
	 
	 	(n)	 	COURRIEL FIDO registered by Borrower on June 12, 2001,
registration no. TMA546,478;
	 
	 	(o)	 	FIDODATA registered by Borrower on February 21, 2001,
registration no. TMA541,437;
	 
	 	(p)	 	PERFORMANCE VOICE MESSAGING registered by Borrower on June
12, 2001, registration no. TMA546,454;
	 
	 	(q)	 	MICROCELL registered by Pre-Filing Parent on March 30, 1999,
registration no. TMA510,356;
	 
	 	(r)	 	MICROCELL SOLUTIONS & DESIGN registered by Pre-Filing Parent
on September 9, 1999, registration no. TMA516,140;
	 
	 	(s)	 	MICROCELL CAPITAL & DESIGN registered by Pre-Filing Parent on
September 30, 1998, registration no. TMA501,581;
	 
	 	(t)	 	MICROCELL CONNEXIONS & DESIGN registered by Pre-Filing Parent
on March 29, 1999, registration no. TMA510,183;
	 
	 	(u)	 	MICROCELL LABS & DESIGN registered by Pre-Filing Parent on
September 30, 1998, registration no. TMA501,578;
	 
	 	(v)	 	FIDO registered by Borrower on February 20, 2003 under no.
TMA576,104;
	 
	 	(w)	 	i.FIDO registered by Borrower on March 25, 2003 under no.
TMA578,101;
	 
	 	(x)	 	POPFONE registered by Pre-Filing Parent on July 8, 1994 under
no. TMA430,217;
	 
	 	(y)	 	POPFONE DESIGN registered by Pre-Filing Parent on June 10,
1994 under no. TMA428,627.




	2.	 	Trade Mark Applications:



 






 






- 14 -


	 	(a)	 	ACCÈS FINANCES application filed by Borrower on March 9, 2000
under no. 1,050,426;
	 
	 	(b)	 	ACCESS FINANCES application filed by Borrower on March 9,
2000 under no. 1,050,425;
	 
	 	(c)	 	SERVICES I.FIDO

I.FIDO SERVICES application filed by Borrower on October 5, 2000
under no. 1,077,633;
	 
	 	(d)	 	FIDO M@GAZINE application filed by Borrower on March 6, 2001
under no. 1,095,074;
	 
	 	(e)	 	MICROCELL SCP application filed by Pre-Filing Parent on July
20, 2001 under no. 1,110,248;
	 
	 	(f)	 	MICROCELL PCS application filed by Pre-Filing Parent on July
20, 2001 under no. 1,110,245;
	 
	 	(g)	 	MICROCELL SCP & DESIGN application filed by Pre-Filing Parent
on July 20, 2001 under no. 1,110,246 and;
	 
	 	(h)	 	MICROCELL PCS & DESIGN application filed by Pre-Filing Parent
on July 20, 2001 under no. 1,110,247;



	3.	 	Patent Application:
	 
	(a)	 	METHOD AND SYSTEM FOR EFFECTING AN ELECTRONIC TRANSACTION




	 	•	 	Nature of interest (owner, licensee, other): Owner
	 
	 	•	 	Date of Application: April 4, 2002, claiming
priority of a provisional application filed April 4, 2001.
	 
	 	•	 	Country of Application: United States (“US”)
and Patent Cooperation Treaty, designating all countries
except the US (“PCT”), respectively under no. 10/117,623 and
no. PCT/CA02/00473.




	 	 	Please note that both the PCT and the US applications are currently in
the name of Microcell i5 inc.



 






 





- 15 -


Indebtedness for Borrowed Money (3.23, 4.1(m), 6.1(d))



	1.	 	Tranche B Credit Agreement.
	 
	2.	 	Tranche C Credit Agreement.
	 
	3.	 	First Preferred Shares.
	 
	4.	 	Second Preferred Shares.
	 
	5.	 	First Notes (if issued).
	 
	6.	 	Second Notes (if issued).



Permits, Licences; Authorizations (3.24)



	1.	 	Special authorization to provide Personal Communications Services (PCS)
pursuant to s. 5(1)(v) of the Radiocommunication Act issued by Industry
Canada on April 15, 1996 and renewed on March 29, 2001 in favour of the
Borrower (formerly Microcell Connexions Inc.) together with license
conditions for Personal Communications Service (PCS) licensees accepted by
the Borrower on April 25, 1996 and on March 29, 2001.



Executive Office; Location of Records (5.1(xxvi))



	1.	 	Jurisdictions in which tangible assets are located:
	 
	 	 	Parent:

Quebec:

Ontario

Alberta

British Columbia


	 
	 	 	Borrower:

Quebec

Ontario

Alberta

British Columbia

Saskatchewan

Manitoba

Nova Scotia

Newfoundland




 






 






- 16 -


	2.	 	Jurisdictions in which aggregate accounts receivable exceeding $50,000
per year are generated:
	 
	 	 	Parent:

Quebec

	 
	 	 	Borrower:

Quebec

Ontario

Alberta

Saskatchewan

Manitoba

British Columbia

	 
	3.	 	Locations of Chief Executive Offices:
	 
	 	 	Borrower, Pre-Filing Parent and Parent:
	 
	 	 	800 de La Gauchetière Street West, Suite 4000, Montreal, Quebec
	 
	4.	 	Locations of Registered Office:
	 
	 	 	Borrower, Pre-Filing Parent and Parent:
	 
	 	 	1250 René-Lévesque blvd.
West, 38th floor, Montreal, Quebec



Liens (6.2)




	1.	 	Act of Movable Hypothec on a commercial paper of $3,000,000 dated May 28,
2002 with the Bank of Montreal to guarantee the issuance of letters of
credit.
	 
	2.	 	Act of Movable Hypothec on a commercial paper of $1,000,000 dated October
17, 2002 with the Bank of Montreal to guarantee the issuance of letters of
credit.
	 
	3.	 	Act of Movable Hypothec on a commercial paper of $337,000 dated October
23, 2002 with the Bank of Montreal to guarantee the issuance of letters of
credit.



The Pre-Filing Parent and the Borrower have also entered into a number of
commercial leases for various automobile vehicles and office equipment. These
leases are true leases as opposed to capital leases. Therefore the vehicles
and equipment leased do not form part of the Pre-Filing Parent or the Borrower
property and assets and are not capitalized in their balance sheet. The
following is a summary description of these leases.


 






 



- 17 -



	4.	 	Commercial Lease Agreements with Location Fortier Inc. and Deragon Leasing
Inc. concerning 78 vehicles for two, three and four year terms.

	 
	5.	 	Commercial Lease Agreements with IBM Canada Ltd., CIT Financial services,
Pitney Bowes Leasing a division of Pitney Bowes Canada Ltd., Minolta (Montreal)
Inc. and Contract Funding Group and Panasonic concerning office photocopiers
and fax.
	 
	6.	 	Commercial lease Agreements with various automobile leasing companies
concerning 44 vehicles used by employees as part of their employee benefits.



Existing Investments (6.4)



	1.	 	Long term investments (Shares or Units)
	 
	 	 	Canadian LNP Consortium Inc. (owned by Borrower)
	 
	 	 	
Canadian Numbering Administration Consortium Inc. (owned by Borrower)
	 
	 	 	Canadian Portable Contribution Consortium Inc. (owned by Borrower)
	 
	 	 	
Telcom Management Limited Partnership (owned by Pre-Filing Parent)
	 
	 	 	
Les placements Microcell Capital, S.E.N.C. (owned by Pre-Filing Parent)
	 
	 	 	
Les placements Microcell Capital, S.E.N.C. (owned by Borrower)
	 
	 	 	
Telcom Management Limited Partnership (owned by Borrower and Pre-Filing Parent)
	 
	 	 	
Telcom Investments Inc. (owned by Borrower)
	 
	 	 	
Saraide, Inc. (owned by Borrower)
	 
	 	 	
Argo II - The Wireless Internet Fund Limited Partnership (owned
by Borrower)
	 
	 	 	
Oz Communications, Inc. (owned by Borrower)
	 
	 	 	
GSM Capital Limited Partnership (owned by Borrower and Pre-Filing
Parent)
	 
	2.	 	Other short term instruments in the form of marketable securities, which
constitute Permitted Investments, are contained in the investments
accounts of the Borrower, the Parent and the Pre-Filing Parent.



Restrictive Agreements (6.9)




	1.	 	Tranche B Credit Agreement.
	 
	2.	 	Tranche C Credit Agreement.



 






 






EXHIBIT A



FORM OF

ASSIGNMENT AND ASSUMPTION



          This Assignment and Assumption (the “Assignment and Assumption”) is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by
the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a
part of this Assignment and Assumption as if set forth herein in full.



          For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor’s rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the Credit Agreement
(including any letters of credit and guarantees included in such Credit
Agreement) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor
(in its capacity as a Lender) against any Person, whether known or unknown,
arising under or in connection with the Credit Agreement, any other documents
or instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including
contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.




	 	 	 	 	 
	1.	 	
Assignor:
	 	     
	 	 	 	 	 
	2.	 	
Assignee:
	 	     
	 	 	 	 	[and is an Affiliate of [identify Lender]]
	 	 	 	 	 
	3.	 	
Borrower:
	 	Microcell Solutions Inc.
	 	 	 	 	 
	4.	 	
Administrative Agent:
	 	JPMorgan Chase Bank, Toronto Branch, as the

administrative agent under the Credit Agreement
	 	 	 	 	 
	5.	 	
Credit Agreement:
	 	The [Cdn.$25,000,000] Credit Agreement dated
as of May 1, 2003 among Microcell Solutions
Inc., as Borrower, Microcell



 






 




- 2 -



	 	 	 	 	 
	 	 	 	 	Telecommunications Inc., as Parent, the Lenders parties
thereto, and JPMorgan Chase Bank, Toronto Branch, as
Administrative Agent, Collateral Agent and Issuing
Bank.


	 	 	 
	6.	 	
Assigned Interest:




	 	 	 	 	 	 	 	 	 
	Aggregate Amount of	 	Amount of	 	 	 	 
	Commitments/Loans	 	Commitment/Loans	 	Percentage Assigned of
	for all Lenders	 	Assigned	 	Commitment/Loans1
	
	 	
	 	

	$
	 	$	 	 	 	 	%	 



Effective
Date:               , 20     [TO
BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]


The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 
	 	ASSIGNOR
	 	 
	 	[NAME OF ASSIGNOR]
	 	 
	 	By:
	 	  	

	 	      Title:
	 	 
	 	ASSIGNEE
	 	 
	 	[NAME OF ASSIGNEE]
	 	 
	 	By:
	 	 	

	 	      Title:








	1 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.


2






 





- 3 -



	 	 
	Consented to and Accepted:2
	 	 
	JPMORGAN CHASE BANK, TORONTO BRANCH, as

     Administrative Agent and Issuing Bank
	 	 
	By

	


	 	Title:
	 	
	Consented to:3
	 	
	MICROCELL SOLUTIONS INC.	
	 	
	By
	


		Title:








	2 Not required with respect to any assignment to a Lender or an Affiliate of a
Lender.
	 
	3 Not required at any time after and during the occurrence of an Event of
Default. Not required with respect to any assignment to a Lender or a Lender
Affiliate.


3






 






ANNEX 1


MICROCELL TRANCHE A EXIT FACILITY AGREEMENT



STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION



          1. Representations and Warranties.



          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim,
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby, including the payment to the Administrative
Agent of a processing and recordation fee of Cdn.$5,000, pursuant to Section
9.4(b) of the Credit Agreement (except in the case of an assignment to an
Affiliate of the Assignor); and (b) assumes no responsibility with respect to
(i) any statements, warranties or representations made in or in connection with
the Credit Agreement or any other Financing Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Financing Documents or any collateral thereunder, (iii) the financial condition
of the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Financing Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Financing Document.



          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.1 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Lender, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Financing Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Financing Documents are required to be performed by it as a Lender.




 






 




- 2 -


          2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee
whether such amounts have accrued prior to the Effective Date or accrued
subsequent to the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for the periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.



          3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be governed by, and construed in accordance with, the laws of the
Province of Ontario and the federal laws of Canada applicable therein.



2






 





EXHIBIT B



FORM OF INTERCREDITOR AGREEMENT



 






 





EXHIBIT C



NOTICE OF BORROWING /CONTINUATION/CONVERSION




	TO: 	 	JPMORGAN CHASE BANK, TORONTO BRANCH
	 
	RE:	 	 Tranche A Exit Facility Agreement dated as of May 1, 2003 made
between, among others, the undersigned (the “Borrower”), you, as
Administrative Agent, and the lenders from time to time party thereto
(as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”)



          We refer to the Commitments of the Lenders under the Credit Agreement and
we hereby give you notice that on [insert date] we wish to obtain a Borrowing
in the aggregate amount of [Canadian][U.S.]$     .



          The Borrowing requested hereby is to take the form of:




	 	 	 	 	 
		 	
[   ]
	 	a B/A Borrowing
	 
	 	 	
[   ]
	 	a Prime Rate Borrowing
	 
	 	 	
[   ]
	 	a Base Rate Borrowing
	 
	 	 	
[   ]
	 	a Eurodollar Borrowing



          The Contract Period in respect of the B/A Borrowing requested hereby is
     days1.


          The Interest Period in respect of the Eurodollar Borrowing requested
hereby is      days2.



          The funds requested hereunder are hereby requested to be disbursed to our
account at [Bank], Account #     . We confirm that this account
complies with the requirements of Section 5.17 of the Credit Agreement, and
that the advance notice required has been provided in compliance with Section
2.2 of the Credit Agreement.



          We hereby certify, after due and careful investigation, that3:




	 	(i)	 	each of the representations and warranties made
by the Borrower in the Credit Agreement are true and correct
on and as of the date hereof except








	1 This sentence is only required in the context of a Borrowing Request for a
B/A Borrowing.
	 
	2 This sentence is only required in the context of a Borrowing Request for a
Eurodollar Borrowing.
	 
	3 This certification need not be made on conversions or rollovers.
	 
	Note: A separate Notice of Borrowing/Continuation/Conversion must be submitted
for each Type of Borrowing.


 






 






- 2 -


	 	 	 	to the extent that (i) any change to the representations and
warranties has been disclosed to the Administrative Agent and
accepted by the Required Lenders, or (ii) any representation
and warranty is stated to be made as of a particular time;
and
	 
	 	(ii)	 	on and as of the date hereof, no Default has
occurred and is continuing.



      All terms defined in the Credit Agreement and used herein have the
meanings given to them in the Credit Agreement.




	 	 	 	 
	DATED:	 	 


	 
	 	 	 	 
	 	 	
MICROCELL SOLUTIONS INC.
	 			
	 	 	
By:	 
	 	 	 	


	 	 	
Name:
	 	 	
Title:
	 	 	 	 
	 	 	
By:	 
	 	 	 	


	 	 	
Name:
	 	 	
Title:



2






 



TRANCHE “A” EXIT FACILITY AGREEMENT



dated as of



May 1, 2003



among



MICROCELL SOLUTIONS INC.



as Borrower,



MICROCELL TELECOMMUNICATIONS INC.



as Parent and Guarantor,



THE LENDERS FROM TIME TO TIME PARTIES HERETO



as Lenders



and



JPMORGAN CHASE BANK TORONTO BRANCH



as Administrative Agent and Collateral Agent





 






 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1	 	
DEFINITIONS
	 	 	2	 
	1.1	 	
Defined Terms
	 	 	2	 
	1.2	 	
Terms Generally
	 	 	25	 
	1.3	 	
Accounting Terms; GAAP
	 	 	25	 
	1.4	 	
Time
	 	 	26	 
	1.5	 	
Permitted Liens
	 	 	26	 
	1.6	 	
Schedules and Exhibits
	 	 	26	 
	ARTICLE 2	 	
LOANS
	 	 	26	 
	2.1	 	
Loans
	 	 	26	 
	2.2	 	
Borrowing, Continuation, Conversion and Roll-Over Elections
	 	 	27	 
	2.3	 	
Interest and Acceptance Fees
	 	 	30	 
	2.4	 	
Repayment of Loans; Fees
	 	 	31	 
	2.5	 	
Evidence of Debt
	 	 	32	 
	2.6	 	
Prepayments of Loans
	 	 	33	 
	2.7	 	
Banker’s Acceptances
	 	 	34	 
	2.8	 	
Alternate Rate of Interest
	 	 	37	 
	2.9	 	
Increased Costs; Illegality
	 	 	37	 
	2.10	 	
Break Funding Payments
	 	 	39	 
	2.11	 	
Taxes
	 	 	40	 
	2.12	 	
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	41	 
	2.13	 	
Currency Indemnity
	 	 	43	 
	2.14	 	
Mitigation Obligations; Replacement of Lenders
	 	 	43	 
	2.15	 	
Letters of Credit
	 	 	44	 
	2.16	 	
Indemnity for Returned Payments
	 	 	49	 
	2.17	 	
Increase in Commitments; Permitted Additional Exit Facility Debt
	 	 	49	 
	2.18	 	
Hedging Arrangements
	 	 	49	 
	2.19	 	
Existing Security
	 	 	50	 
	ARTICLE 3	 	
REPRESENTATIONS AND WARRANTIES
	 	 	50	 
	3.1	 	
Organization; Powers
	 	 	50	 
	3.2	 	
Authorization; Enforceability
	 	 	50	 



-i-






 


TABLE OF CONTENTS
(continued)



	 	 	 	 	 	 	 
	 	 	 	 	Page
	3.3	 	
Governmental Approvals; No Conflicts
	 	 	50	 
	3.4	 	
Financial Condition; No Material Adverse Effect
	 	 	51	 
	3.5	 	
Litigation
	 	 	51	 
	3.6	 	
Compliance with Laws and Agreements
	 	 	51	 
	3.7	 	
Taxes
	 	 	52	 
	3.8	 	
Titles to Real Property
	 	 	52	 
	3.9	 	
Titles to Personal Property
	 	 	52	 
	3.10	 	
Pension Plans
	 	 	52	 
	3.11	 	
Disclosure
	 	 	52	 
	3.12	 	
Defaults
	 	 	52	 
	3.13	 	
Casualties; Taking of Properties
	 	 	52	 
	3.14	 	
Subsidiaries
	 	 	53	 
	3.15	 	
Insurance
	 	 	53	 
	3.16	 	
Material Contracts
	 	 	53	 
	3.17	 	
Environmental Matters
	 	 	53	 
	3.18	 	
Employee Matters
	 	 	55	 
	3.19	 	
Fiscal Year
	 	 	55	 
	3.20	 	
Intellectual Property Rights
	 	 	55	 
	3.21	 	
Investment and Holding Company Status
	 	 	55	 
	3.22	 	
PCS Network Ownership
	 	 	56	 
	3.23	 	
No Indebtedness for Borrowed Money
	 	 	56	 
	3.24	 	
Permits, Licences, etc.
	 	 	56	 
	3.25	 	
Security Interests
	 	 	56	 
	3.26	 	
Regulatory Compliance
	 	 	57	 
	3.27	 	
Budget Update
	 	 	57	 
	ARTICLE 4	 	
CONDITIONS
	 	 	57	 
	4.1	 	
Conditions Precedent to Effectiveness of Agreement
	 	 	57	 
	4.2	 	
Each Credit Event
	 	 	61	 
	ARTICLE 5	 	
AFFIRMATIVE COVENANTS
	 	 	62	 
	5.1	 	
Financial Statements and Other Information
	 	 	62	 



-ii-






 


TABLE OF CONTENTS
(continued)



	 	 	 	 	 	 	 
	 	 	 	 	Page
	5.2	 	
Existence; Conduct of Business
	 	 	68	 
	5.3	 	
Payment of Obligations
	 	 	68	 
	5.4	 	
Maintenance of Properties
	 	 	68	 
	5.5	 	
Maintenance of Authorizations
	 	 	68	 
	5.6	 	
Books and Records; Inspection Rights
	 	 	69	 
	5.7	 	
Compliance with Laws and Material Contracts
	 	 	69	 
	5.8	 	
Use of Proceeds and Letters of Credit
	 	 	69	 
	5.9	 	
Further Assurances
	 	 	69	 
	5.10	 	
Insurance
	 	 	70	 
	5.11	 	
Operation and Maintenance of Property
	 	 	70	 
	5.12	 	
Additional Subsidiaries; Additional Liens
	 	 	70	 
	5.13	 	
Intentionally Deleted
	 	 	70	 
	5.14	 	
Financial Covenants
	 	 	71	 
	5.15	 	
Most Favoured Nations
	 	 	75	 
	5.16	 	
Landlord Consents
	 	 	76	 
	5.17	 	
Bank Accounts
	 	 	76	 
	ARTICLE 6	 	
NEGATIVE COVENANTS
	 	 	76	 
	6.1	 	
Indebtedness
	 	 	76	 
	6.2	 	
Liens
	 	 	77	 
	6.3	 	
Fundamental Changes
	 	 	77	 
	6.4	 	
Investments, Loans, Advances, and Guarantees
	 	 	78	 
	6.5	 	
Hedging Agreements
	 	 	78	 
	6.6	 	
Restricted Payments
	 	 	79	 
	6.7	 	
Transactions with Affiliates
	 	 	79	 
	6.8	 	
Repayment of Debt
	 	 	80	 
	6.9	 	
Restrictive Agreements
	 	 	80	 
	6.10	 	
Capital Lease Obligations
	 	 	80	 
	6.11	 	
Sales and Leasebacks
	 	 	81	 
	6.12	 	
Pension Plan Compliance
	 	 	81	 
	6.13	 	
Sale or Discount of Receivables
	 	 	81	 



-iii-






 


TABLE OF CONTENTS
(continued)



	 	 	 	 	 	 	 
	 	 	 	 	Page
	6.14	 	
Unconditional Purchase Obligations
	 	 	81	 
	6.15	 	
Ownership of Shares
	 	 	81	 
	6.16	 	
No Amendments to Material Contracts
	 	 	82	 
	ARTICLE 7	 	
EVENTS OF DEFAULT
	 	 	82	 
	7.1	 	
Events of Default
	 	 	82	 
	ARTICLE 8	 	
THE ADMINISTRATIVE AGENT
	 	 	86	 
	8.1	 	
Appointment of Agent
	 	 	86	 
	8.2	 	
Limitation of Duties of Agent
	 	 	87	 
	8.3	 	
Lack of Reliance on the Agent
	 	 	87	 
	8.4	 	
Certain Rights of the Administrative Agent
	 	 	88	 
	8.5	 	
Reliance by Administrative Agent
	 	 	88	 
	8.6	 	
Indemnification of Agent
	 	 	88	 
	8.7	 	
The Agent in its Individual Capacities
	 	 	88	 
	8.8	 	
May Treat Lender as Owner
	 	 	89	 
	8.9	 	
Successor Administrative Agent
	 	 	89	 
	8.10	 	
Lenders to Enforce through Administrative Agent
	 	 	89	 
	8.11	 	
Quebec Security
	 	 	90	 
	ARTICLE 9	 	
MISCELLANEOUS
	 	 	92	 
	9.1	 	
Notices
	 	 	92	 
	9.2	 	
Waivers; Amendments
	 	 	93	 
	9.3	 	
Expenses; Indemnity; Damage Waiver
	 	 	94	 
	9.4	 	
Successors and Assigns
	 	 	97	 
	9.5	 	
Survival
	 	 	100	 
	9.6	 	
Counterparts; Integration; Effectiveness
	 	 	100	 
	9.7	 	
Severability
	 	 	100	 
	9.8	 	
Right of Set Off
	 	 	100	 
	9.9	 	
Governing Law; Jurisdiction; Consent to Service of Process
	 	 	101	 
	9.10	 	
WAIVER OF JURY TRIAL
	 	 	101	 
	9.11	 	
Headings
	 	 	102	 
	9.12	 	
Confidentiality
	 	 	102	 




-iv-