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					                                       SUPERIOR COURT
                                             (Commercial Division)

           CANADA
           PROVINCE OF QUEBEC
           DISTRICT OF MONTREAL

          No.          500-11-031130-079

          DATE:        March 7, 2008


          IN THE PRESENCE OF :             THE HONOURABLE JOEL A. SILCOFF, J.S.C.


          IN THE MATTER OF A PROPOSED ARRANGEMENT CONCERNING BCE INC. AND
          THE HOLDERS OF ITS COMMON AND PREFERRED SHARES UNDER SECTION
          192 OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, c. C-44, AS
          AMENDED (THE UCeCA")

          - and-

          BCE INC.
          Petitioner
          - and-

          6796508 CANADA INC.
          - and-

          THE DIRECTOR APPOINTED PURSUANT TO THE CeCA
          Mis en cause
          - and-

          CONTESTING DEBENTUREHOLDERS AND TRUSTEES LISTED AT
          "APPENDIX A"
          Contesting Parties


                                               JUDGMENT




JS 0964
                                                                                    I
                                                                                    I

                                                                                    I
    500-11-031130-079                                                       PAGE: 2

                                              APPENDIX A

                    CONTESTING DEBENTUREHOLDERS            At~   TRUSTEES



    AEGON CAPITAL MANAGEMENT INC. ("Aegon")
    ADDENDA CAPITAL INC. ("Addenda")
    ELLIOTT & PAGES LIMITED                ("E & P")
    PHILLIPS, HAGERS & NORTH INVESTMENT MANAGEMENT LTD. (PH&N)
    SUN LIFE ASSURANCE COMPANY OF CANADA ("Sun Life Assurance")
    CIBC GLOBAL ASSET MANAGEMENT INC. ("CIBC Global")
    HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA, AS REPRESENTED
    BY THE MINISTER OF FINANCE ("Alberta")
    ...
    [ ]
    MANITOBA CIVIL SERVICE SUPERANNUATION BOARD ("MCSSB")
    TO ASSET MANAGEMENT INC. ("TO Asset")
    SUN LIFE INSURANCE (CANADA) LIMITED ("Sun Life Insurance")
    MANULIFE FINANCIAL CORPORATION ("Manulife")
THE WAWANESA LIFE INSURANCE COMPANY ("Wawanesa")
FRANKLIN TEMPLETON INVESTMENT CORP. ("Franklin")
BARCLAYS GLOBAL INVESTORS CANADA LIMITED ("Barclays")
[PUBLIC SECTOR PENSION INVESTMENT BOARD]1 ("PSP")
CIBC MELLON TRUST COMPANY ("CIBC Mellon")

COMPUTERSHARE TRUST COMPANY OF CANADA ("Computershare")




1     Discontinuance, February 14, 2008.
 500-11-031130-079                                                            PAGE: 3

      I. INTRODUCTION




 [1]    Petitioner, BCE Inc. ("BCE") seeks the final order (the "Motion for Final
 Order'') referred to in a previously filed Motion for Interim and Final Orders in
 Connection With a Proposed Arrangement (Sections 192 and 248 of the CBGA) (the
 "Arrangement Motion'').
[2]    More particularly, BCE asks the Court to sanction a Plan of Arrangement
submitted to and approved by its shareholders and other equity-linked right holders, in
accordance with the requirements of an Interim Order previously issued.

[3]    The Motion for Final Order is supported by Mise en cause, 6796508 Canada Inc.
(the "Purchaser"). It is opposed by the contesting debentureholders and trustees listed
in "Appendix An (the "Contesting Parties").

[4J     Contestations were filed on behalf of three separate groups:

        (a)   Oebentureholders subject to the 1976 Trust Indenture (the "1976
              Debentureholders") and CIBC Mellon Trust Company, the Trustee
              named thereunder;

       (b)    Debentureholders subject to the 1996 Trust Indenture (the "1996
              Debentureholders") and Computershare Trust Company of Canada, the
              Trustee named thereunder; and

       (c)    Debentureholders subject to the 1997 Trust Indenture (the "1997
              Debentureholders").

[5]   The Motion for Final Order was heard together with each of following four related
proceedings:

       (a)    500-17-038866-078: CIBC Mellon (Plaintiff) (re: 1976 Debentureholders),
              Motion for Declaratory Judgment (the "1976 Declaratory Motion" );

       (b)    500-17-038867-076:       Computershare    (Plaintiff) (re:           1996
              Debentureholders),   Motion for Declaratory Judgment (the           "1996
              Declaratory Motion");
       (c)    500-11-031677-079: Aegon Capital Management Inc. et als (Petitioners)
              (re: 1976/1996 Debentureholders), Motion for Oppression Remedy (the
              "1976/1996 Oppression     Remedy'~; and
 500-11-031130-079                                                                 PAGE:4

       (d)    500-11-031672-070: Addenda Capital Inc. et als (Plaintiffs) (re: 1997
              Debentureholders), Motion for Oppression Remedy (the "1997
                                                                                                I
                                                                                                I

              Oppression Remedy'}.
                                                                                                I
                                                                                                ,
                                                                                                [
                                           (collectively, the "Related Proceedings")            I



[6]   Seeing the lack of identity of the parties and of the remedies sought in each of          I
the Related Proceedings, and for the purpose of clarity, separate judgments are                 I
rendered in each of the Related Proceedings (the "Related Judgments") and released
concurrently with this judgment.

(7]    For the reasons expressed in each of the Related Judgments, the Court:

       (a)    determined, with respect to the 1976 Declaratory Motion, that:
                     Section 8.01 of the 1976 Trust Indenture between Bell Canada
                     and Plaintiff(defined therein) as Trustee does not applyby reason
                     of the Proposed Plan of Arrangement and the Proposed
                     Transaction (as these terms are defined in the 1976 Declaratory
                     Motion);

       (b)    determined, with respect to the 1996 Declaratory Motion, that:

                    Section 8.01 of the 1996 Trust Indenture between Bell canada
                    and Plaintiff(defined therein) as Trustee does not apply by reason
                    of the Proposed Plan of Arrangement and the Proposed
                    Transaction (as these terms are defined in the 1996 Declaratory
                    Motion);

       (c)    dismissed the 1976/1996 Oppression Remedy, and

       (d)   dismissed the 1997 Oppression Remedy.

[8)    The reader is encouraged to read each of the Related Judgments for a full
comprehension of the Court's rulings on the issues raised for determination in this and
the other Related Judgments.

[9]     The evidence, including expert evidence, filed by the parties in support of their
respective contentions in these proceedings, is deemed to have been filed and to form
part of the Court record in each of the other Related Proceedings.                          I
                                                                                            j

[10] The Court will limit its analysis in this judgment to the issues raised and the
conclusions sought in the Motion for Final Order. The findings and analysis herein shall
be deemed to form part of and to apply mutatis mutandis in each of the Related
                                                                                            I
Judgments.

[11] The Contesting Parties, other than CIBe Mellon and Oornputersnare, all claim to
                                                                                            I
own debentures issued by Bell Canada (the "Bell Canada Debentures"), are referred
to collectively as the "Contesting Debentureholders".                                       I
    500-11-031130-079                                                                PAGE: 5

    [12] All capitalized terms used but not otherwise defined herein, shall have the same
    meaning as set out in the Arrangement Motion and, more particularly. in the Glossary
    contained in the Notice of Special Shareholder Meeting and Management Proxy
    Circular and attachments (the "Circular"f filed. in draft form, in support thereof.

    II.         PRELIMINARY PROCEDURAL MATTERS

    [13] During the course of the hearings on the merits, presentation of and rulings on
    various Interlocutory Motions and objections were sometimes postponed or reserved, to
    be dealt with together in the arguments and judgments on the merits of the proceedings.
    It was agreed that unless expressly pleaded, the Court would assume that the parties in
    question desisted from either their Motions or their objections. To the extent necessary,
    rulings on the matters not desisted from will be dealt with in body of the Court's analysis
    of the merits in each of the Related Judgments.
    [14J   During the pre-hearing phase, as Well' as during the hearings on the merits,
    various parties were requested to produce documents and disclose information that
    constitute confidential proprietary, personal, financial, commercial or other confidential
    infonnation of a highly classified and/or sensitive nature pertaining to each of their
    respective businesses which, if made known to the public, could cause irreparable hann
    to each of them. At their requests. the Court issued various Confidentiality Orders
    governing the disclosure of such evidence and made several rulings in connection
    therewith. A final Confidentiality Order is being rendered concurrently with the Related
    Judgements.

    [15]
       Although the Court has considered the relevance and probative value of this
sensitive evidence and the corresponding arguments in connection therewith, seeing
the requirement of confidentiality, it will make no reference to such evidence in any of
the Related Judgments.

III.           IDENTITY OF THE PARTIES

              (1)      !flg
                                                                                                  I
[16]    BCE, Canada's largest communications company, was incorporated in 1970 and
                                                                                                  I
                                                                                                  j
continued under the GBGA in 1979. Its Articles of Incorporation were amended by: (i) a
Certificate and Articles of Amalgamation dated August 1, 2004. (ii) a Certificate and             I
Articles of Arrangement dated July 10, 2006, and (iii) a Certificate and Articles of
Amendment dated January 25.2007.

[17J There are more than 800 million BCE common shares and 110 million BCE
preferred shares issued and outstanding in the hands of more than 600 thousand
                                                                                                  I
                                                                                                  ,
registered and beneficial shareholders.



2
          Filed in its final form in the Motion for Final Order as ExhibitBCE-11.
500-11-031130-079                                                                 PAGE: 6

                                                       th
[18] Bell Canada was incorporated in the late 19 century by Federal Charter and
was subsequently continued under the CaCA. It became a wholly-owned subsidiary of
BCE in April 1983 pursuant to a plan of arrangement approved by this Court and
confirmed by the Court of Appeal of Quebec. There is no evidence that the 1983 plan of
arrangement was opposed by any of the Contesting Parties.

[19] At the present time, Bell Canada represents, on a non-consolidated basis,
approximately 56% of BCE's revenues and 77% of its assets. These percentages have
changed significantly over time.

[20] BCE and Bell Canada are now, and have always been, separate legal entities
with separate charters, Articles and by-laws. They have separate assets, debt
obligations, liabilities, credit ratings, bank accounts, accounting, bookkeeping and
investments. Accordingly, although Bell Canada is a wholly-owned subsidiary of BCE,
the stakeholders of the two entities are not identical.

[21]   While BCE and Bell Canada now share a common set of directors and some
senior officers, this was not the case prior to January 2003. The operational officers of
Bell Canada are not officers of BCE.

[22] The Trust Indentures governing the Bell Canada Debentures define the
"Company" or "Corporation" to be Bell Canada. That phrase has never been modified to
include BCE or any other affiliate of BCE.

       (2)    Purchaser
[23] Purchaser is a corporation organized and incorporated under the CaCA by the
Ontario Teachers' Pension Plan Board ("Teachers''') as well as by affiliates of
Providence Equity Partners Inc. ("Providence") and Madison Dearborn Partners, LLC
("Madison Dearborn") (collectively the "Purchaser Parties") for the purpose of
entering into the Definitive Agreement and consummating the Plan of Arrangement.

[24] The Ontario Teachers' Pension Plan (the "Plan") has evolved from the pension
plan originally created in 1917 for Ontario teachers. Until 1990. the Plan was restricted
to investing in non-marketable Government of Ontario debentures. However, in 1990,
the Ontario government created Teachers' as an independent corporation with full
authority to invest all assets, report on its funding status, administer its activities and
pay members and their survivors the benefits promised.

[25]   The Plan continues to be a defined benefit plan co-sponsored by the Ontario
government, through the Ministry of Education, and by all the Plan members,
represented by the Ontario Teachers' Federation.      The co-sponsors are equally
responsible for the Plan's gains and losses.

[26] At the end of 2006, Teachers' managed $106 billion in net assets. It is BCE's
largest single shareholder.
500-11-031130-079                                                                PAGE: 7

[27] Providence is the largest private equity firm dedicated solely to the media and
entertainment, communications, education and information services industries. It
currently manages approximately US $21 billion of committed capital for its instjtutional
partners (including one of its largest investors, Teachers') and has been active in these
industries for almost 20 years.
[28] Madison Dearborn is an experienced and successful private equity investment
firm based in Chicago. It has more than US $14 billion of capital under management
and makes new investments through its most recent fund, Madison Dearborn Partners
V, a US $6.5 billion investment fund formed in 2006. Since its inception in 1992,
Madison Dearborn has invested in more than 100 companies. Over the past 20 years,
Madison Dearborn principals. as opposed to Madison Dearborn, have completed over
200 investments.
[29]   Madison Dearborn focuses on private equity transactions across a broad
spectrum of industries, inclUding basic industries, communications, consumer, energy
and power, financial services, real estate and health care. Over the last decade,
Madison Dearborn has been an active investor in the communication sector. It has also
been an active investor in the media business.

[30]   Teachers', Providence and Madison Dearborn are sophisticated investors. They
have extensive experience in leveraged buyouts and share a track record of successful
private equity investments involving highly levered companies.

       (3)    1976 and 1996 Debentureholders
[31] The 1976 and 1996 Debentureholders include Aegon, CISC Global, Sun life
Assurance, Sun Life Insurance, TO Asset, Addenda, PH&N, MCSSS, Manulife and
Alberta (the "1976 and 1996 Debentureholders").

[32] The 1976 and 1996 Debentureholders include some of Canada's largest and
most reputable financial institutions, pension funds and insurance companies. They are
sophisticated investors who possess an intimate and historic knowledge of the financial
markets and are major participants in the debt markets.
[33]   They have the following specific holdings:



       Debentures issued
       under
                                  Contesting
                                  Parties
                                                      Total
                                                      Outstanding
                                                                        % of Total
                                                                        Outstanding
                                                                                      1
       1976 Trust Indenture      $0.230 billion       $1 .794 billion   12.80%
       1996 Trust Indenture      $0.184 billion       $0.275 billion    66.91%
       TOTAL:                    $0.414 billion       $2.069 billion
 500-11-031130-079                                                               PAGE: 8



 [34J In addition, some of the 1976 Debentureholders hold separately traded interest
 and/or residual principal payments derived from stripped Bell Canada debentures (the
 "Strips"). The Strips amount to an additional $275 million economic interest in the
 1976 Debentures. This represents a further 15.33 % of the principal amount
 outstanding under the 1976 Trust Indenture.

 [35J The 1976 and 1996 Debentureholders have held the majority of their debentures
 since before any announcement relating to the possibility of the proposed leveraged
 buyout ("LBO"). Some of them purchased Bell Canada debentures subsequent to the
 announcement.
 [36] Certain of the 1976 and 1996 Debentureholders are restricted from holding non-
 investment grade bonds.

        (4)    1997 Debentureholders
[37] Since the discontinuance of PSP, the 1997 Debentureholders include Addenda,
PH&N, Sun Life Assurance, CIBC Global, Alberta, Wawanesa, TD Asset, Franklin and
Barclays.
[38] The 1997 Debentureholders include some of Canada's largest and most
reputable financial institutions, pension funds and insurance companies. They are
sophisticated investors who possess an intimate and historic knowledge of the financial
markets and are major participants in the debt markets.

[39] The 1997 Debentureholders hold approximately 21% of the approximately $5.1
billion of outstanding1997 Debentures with maturity dates before and after August 2010,
which represent a face value of $1,078,733,000.
       (5)    else Mellon & Computershare
[40) CIBC Mellon and Computershare are respectively the successor Trustees under:
(i) the Trust Indentures executed by and between Bell Canada and the Royal Trust
Company on July 1, 1976 by which the parties agreed to create and issue the 1976
debentures (the "1976 Trust Indenture") and (ii) the Trust Indenture executed by and
between Bell Canada and Montreal Trust Company on April 17, 1996 by which the
parties agreed to create and issue the 1996 debentures (the "1996 Trust Indenture").
[41) CIBC Mellon is also the Trustee named under the Trust Indenture executed by
and between Bell Canada and CIBe Mellon on November 18, 1997 by which the parties
agreed to create and issue the 1997 debentures (the "1997 Trust Indenture").
[42] CIBC Mellon did not receive an Extraordinary Resolution (as defined in the 1976
and 1997 Trust Indentures) authorizing it to institute proceedings from either the 1976 or
 500-11-031130-079                                                              PAGE: 9

 1997 Debentureholders. Nevertheless, it chose to participate with the               1976
 Debentureholders in their Contestation of the present Arrangement Motion.

 [43J   CIBC Mellon is also Plaintiff in the 1976 Declaratory Motion.

 [44]  Computershare is party to three of the Related Proceedings: (i) the Motion for
 Final Order, (ii) the 1996 Declaratory Motion and (iii) the 1976/1996 Oppression
 Remedy.

 [45] Computershare       received   an   Extraordinary    Resolution   from   the   1996
 Debentureholders.
IV.     BACKGROUND AND FACTUAL CONTEXT
        (1)   Factual Outline

[46]    Purchaser and BCE entered into the Definitive Agreement as of June 29,2007,
whereby Purchaser and BCE agreed, among other things and subject to the terms and
conditions of the Definitive Agreement, to implement the Plan of Arrangement, pursuant
to which Purchaser would acquire for cash all of the outstanding shares of BeE.

[47]   On April 9, 2007, BCE was put "in play" after Teachers' filed a Schedule 130
report with the United States Securities and Exchange Commission (the USEC")
informing the market that it had changed its investment intent with respect to BCE from
"passive" to "active".

[48J Prior to being put "in play", BCE had repeatedly declined to respond to overtures
received from various private equity firms wanting to discuss the possibility of a
privatization transaction. BCE's stated business strategy, prior to being put "in play",
had been to enhance shareholder value by executing its business plan, as modified
from time to time.

[49]   As far back as late October or early November 2006, BCE became aware of
rumours that 'Kohlberg Kravis Roberts & Co (UKKR"), a leading U.S. private equity firm,
was working on a potential transaction involving BCE. Mr. Michael Sabia, President and
Chief Executive Officer of BCE, contacted KKR directly with the purpose of squelching
these rumours and informing them that BCE was not interested in pursuing such a
transaction at that time.

[50] In February 2007, new rumours surfaced that KKR and the Canada Pension Plan
Investment Board (UCPP") were arranging financing to initiate a bid for BCE. Mr. Sabia
again contacted KKR to reiterate that BCE was not interested in pursuing such a
transaction at that time.

[51 J Shortly thereafter, additional rumours began to circulate that an investment
banking firm was assisting Teachers' with a potential transaction involving BCE.
According to Mr. Metcalfe. Vice-President of Teachers' Private Capital. a Teachers'
 500-11-031130-079                                                               PAGE: 10

 affiliate, Teachers' had considered the possibility of acquiring BCE as early as 2005. Mr.
 Bertram, Executive-Vice-President of Teachers', confirmed that Teachers' had decided
 to proceed with a bid for BCE in February 2007. Mr. Sabia conveyed the same message
 to Teachers', that he had previously delivered to KKR and to CPP, that BCE was not
 interested in pursuing a privatization transaction at that time.

[52] At a meeting of the BCE Board of Directors held on March 7, 2007, management
reported that two separate groups (KKRlCPP and Teachers') had expressed their
interest in pursuing a potential privatization transaction. Each of Goldman Sachs and
RBC Capital Markets, BCE's financial advisors, reviewed with the BCE Board various
alternative transactions to enhance shareholder value, including various recapitalization
and share repurchase scenarios combined with a further dividend increase, as well as
the privatization altemative.

[53] The Board determined that BCE should not pursue the privatization alternative at
that time and instructed management to so advise the KKRlCPP and Teachers' groups.

[54]     Messrs. Sabia and Vanaselja met again individually with representatives of the
 KKRlCPP and Teachers' groups. They relayed the BCE Board's position not to pursue
.the privatization alternative at that time.

[55]    Mr. Sabia reported these discussions to the BCE Board again on March 13,
2007, at which time the BCE Board re-affirmed its position that BCE's primary priority
should continue to be to execute on its 2007 business plan and that the privatization
alternative should not be pursued at that time. On the Board's instructions, Mr. Sabia
contacted representatives of the KKRlCPP and Teachers' groups on March 20,2007 to
relay the Board's position. No further discussions were contemplated by BCE at that
time.

[56] On March 29, 2007, an article appeared on the front page of the Globe & Mail
that inaccurately described BCE as being in discussions with a consortium comprised of
Teachers' and KKR. At the request of the Toronto Stock Exchange, BCE issued a press
release that day confirming that there were no ongoing discussions being held with any
private equity investor with respect to a privatization of BCE or any similar transaction,
and that BCE had no current intention to pursue such discussions.
[57] Approximately ten days later, on April 9, 2007, Teachers' filed its Statement of
Beneficia' Ownership on Schedute 13D with the SEC.

[58] In the days following, there was heightened press speculation conceming a
potential privatization of BCE, including certain reports indicating that Teachers' had put
together a mostly Canadian consortium to potentially launch a take-over bid for BCE
and had secured the necessary equity and debt financing commitments.

[59] BCE, having been put "ln play", the Board was required to address its revised
fiduciary obligations and the appropriate role to follow in the circumstances. To this end.
extensive consultations ensued with its various legal and financial advisors.
    500-11-031130-079                                                                PAGE: 11

    [60] Relying on the principles described by the Supreme Court of DeJaware in, what
    has often been referred to as the "seminal" case of Rev/on, Inc. v. Mac Andrew &
    Forbes Ho/dings, Inc. 3, the Board determined they had an overriding duty to maximize
    shareholder value and obtain the highest value for its shareholders while respecting the
    contractual obligations of the corporation and its subsidiaries. The Contesting
    Debentureholders dispute the interpretation and application by BCE of the "Rev/on
    Duty" in the circumstances described in these proceedings.

    [61] The application of the "Rev/on Duty"to the Directors of BCE will be discussed in
    greater detail below.

    [62] At a meeting held on April 14, 2007, the Board reviewed with its legal and
    financial advisors, the strategic alternatives that might be pursued. It determined that, in
    the circumstances, it was in the best interests of both the corporation and its
    shareholders to guard against the risk that, if a change of control of BCE became likely,
    no single bidding group would be able to assemble such a significant proportion of
    available debt and Canadian equity that they would be able to preclude competing
    bidding groups from securing the necessary capital to participate effectively in an
    auction process. The Board instructed management and BCE's financial advisors to
    hold exploratory discussions with interested parties to encourage them to assemble a
    competing bidding group.

[63] In a press release dated April 17, 2007, BCE announced that it was reviewing its
strategic alternatives with a view to further enhancing shareholder value. To this end,
the Strategic Oversight Committee (the "SOC") of the Board was formed, consisting of
Donna Soble Kaufman as the Chair, Andre Berard, James Pattison and Thomas C.
O'Neill. None of the members of the SOC has ever been a member of management of
BCE.

[64] The SOC retained independent legal and financial advisors to assist it in carrying
out its mandate. It was also assisted throughout the process by BCE's legal and
financial advisors, including Goldman, Sachs & Co., RBC Dominion Securities Inc.,
CIBC World Markets Inc.• BMO Nesbitt Bums Inc., Davies Ward Phillips & Vineberg
LLP, Stikeman Elliott LLP, Sullivan & Cromwell LLP and Blake, Cassels and Graydon
LLP.

[65] From its formation on April 20, 2007 through June 29, 2007, the SOC held a total
of 30 formal meetings. Throughout the strategic review process, members of the SOC
were in direct contact with various interested parties. During the same period, the BCE
Board held ten separate meetings at which the strategic review process was discussed.

[66] It was determined that an auction process would best serve the interests of BCE
and its shareholders. Guidelines relating to the auction process were put in place in
early June 2007.


3     (1986) 506 A.2d 173 al146 (Del. Sup. Ct.) {Rev/on]
 500-11-031130-079                                                               PAGE: 12

 [67) On June 13,2007, Goldman, Sachs & Co., acting on behalf of BCE, sent a letter
 to all potential participants in the auction process, providing them with the bidding rules
 and the form of a proposed definitive transaction agreement. The bidding rules set out
 the details required for the submission of offers by the participants in the auction
 process as well as the criteria to be considered in evaluating any bids that were
 received.
 [68] The deadline for the submission of offers was fixed at 9:00 A.M., June 26, 2007.
 They required among other things, the production by the bidders of a detailed mark-up
 of any proposed changes to the definitive transaction agreement circulated by BCE,
 accompanied by fully executed equity and debt commitment letters sufficient to support
 the bidder's offer.
[69] The bidders were advised that, in evaluating the competitiveness of proposed
bids, BCE would consider, among other things, the impact that the bidders' proposed
financing arrangements would have on BCE and Bell Canada debentureholders and, in
particular, whether their bids respected the contractual rights of those debentureholders
under the applicable Trust Indentures.

[70) On June 18, 2007, Purchaser submitted a set of preliminary materials, including
an electronic mark-up of the proposed definitive transaction agreement, marked to show
changes to the form agreement provided to the bidders by BCE.

[71] On June 22, 2007, each of the bidders was provided with a revised form of
definitive transaction agreement prepared by BCE's legal advisors.
[72] On June 26, 2007, Purchaser tendered its proposal to the SOC, committing to
acquire all of BCE's common shares for $42.25 cash per share through a plan of
arrangement.

[73] According to Purchaser, it was always its intention to respect the rights of the
Contesting Debentureholders. None of the proposals submitted by Purchaser ever
provided for any redemption or "buyout" of the Bell Canada Debentures, except for
those with near term maturities.
[74] The auction process resulted in offers being submitted on June 26, 2007 from
three groups: Purchaser, CPP and KKR (the "CPP Consortium") and Cerberus Capital
Management, L.P. ("Cerberus").

[75] The offers submitted by Purchaser and by the CPP Consortium were all-cash
offers, while the offer from Cerberus consisted of cash and stock (in the form of "roll-
over" or "stub-equity"), with the substantial portion of the offer value in cash.

[76] All three offers contemplated the addition of a substantial amount of new debt for
which Bell Canada would be liable, either as borrower or as guarantor. In addition, all
three offers would have resulted in BCE having a consolidated debtlEBITDA ratio of at
least 5.8 and, accordingly, all would likely have resulted in a downgrade of the Bell
    500-11-031130-079                                                                          PAGE: 13

    Debentures to below investment grade. As well, all three of the offers left the Bell
    Canada Debentures issued under the various Trust Indentures in place except for those
    with near term maturities.

    [77] According to Purchaser, for tax reasons, its June 26, 2007 offer contemplated
    two amalgamations would be effected following the acquisition of the BCE Shares. This
    would have permitted the interest associated with the acquisition debt to be available to
    offset taxable income of BCE and Bell Canada.

    [78]   On June 28, 2007. the SOC met with its financial and legal advisors and with
    management to review and evaluate each of the bids. It concluded that one or more of
    the offers submitted could lead to an acceptable transaction and that final stage
    negotiations should be concluded as rapidly as possible in order to ensure that such
    offers were preserved, especially in light of ongoing deterioration in the debt markets.
    To this end, the SOC instructed its legal and financial advisors to continue negotiations
    and to request that each of the three bidding consortia put its best offer forward before
    the meeting of the BCE Board scheduled for the next day.

    [79] BCE's advisors informed Purchaser that BCE had reservations about the
    inclusion of their proposed amalgamations involving Bell Canada as part of the Plan of
    Arrangement, and that the transactions proposed by the other two bidders did not
    contemplate such amalgamations. BCE was concerned that the proposed
    amalgamations introduced an unnecessary transaction risks into the acquisition and,
    accordingly, advised Purchaser that its bid was less competitive from a structural
    standpoint relative to the other bidders.

[80] Purchaser then considered alternative transaction structures that could preserve
tax efficiencies while avoiding the amalgamation involving Bell Canada with other
entities, proposed in its original offer. This alternative structure, which did not include an
amalgamation or steps having the same effect as an amalgamation of Bell Canada as
one of the transaction steps, is reflected in the revised proposal submitted by Purchaser
on June 29, 2007.

{81] Purchaser's revised proposal increased the initial offer to $42.75 cash per
common share. It included various revised pre and post closing steps that Purchaser
has or intended to require BCE or its subsidiaries perform, as defined in Section 5.05 of
the Definitive Agreement.

f82] On June 29,2007, after comparing the three offers, the Board determined, based
on the recommendation of the SOC, that Purchaser's revised offer of $42.75 per share,
was superior to the other offers. By resolution adopted unantrnousty", the Board
determined that Purchasers revised offer was fair to the shareholders and in the best
interests of the corporation. It instructed its advisors to conclude negotiations with

4
       For professional reasons, Board Member Brian Levitt recused himself from any deliberations relating
     . to the Strategic Review Process.
    500-11-031130-079                                                                     PAGE: 14

    Purchaser on the remaining outstanding issues with a view to concluding the Definitive
    Agreement that evening or by no later than June 30, 2007.

    [83]     The Definitive Agreement was signed as of June 29, 2007

    [84]   In evaluating the fairness of the consideration to be paid to shareholders under
    the Plan of Arrangement, the Board and the SOC received opinions from each of SMO
    Capital Markets, CIBC World Markets and RBC Capital Markets. The Board also
    received an opinion from Goldman Sachs and the SOC also received an opinion from
    Greenhill & Co.

    [85]   The BCE Board did not receive a fairness opinion in respect of the Bell Canada
    Debentureholders. BCE takes the view that, since the rights of the Bell Canada
    Debentureholders were not being arranged, it would not have been customary or
    required for such an opinion to be provided. The Contesting Parties suggest otherwise.

    [86] On August 10, 2007, the Court issued the Interim Order (the "Interim Order"),
    referred to in the Arrangement Motion, requiring BCE to:

           ... convene, hold and conduct the Meeting on September21. 2007 at which time
           the Shareholders will be asked to consider and, if thought appropriate, to pass,
           with or without variation, the Arrangement Resolution substantially in the form set
           forth in Appendix "A" to the Circular (Exhibit P-1, en liasse) to, among other
           things, authorize, approve and adopt the Arrangement and the Plan of
           Arrangement, and to transact such other business as may properly come before
           the Meeting, ...;

[87] The Meeting of Shareholders was held pursuant to the terms of the Interim Order
on September 21, 2007; the formalities set out therein were complied with.

[88]       The shareholders approved the Arrangement Resolution by a majority of
97.93%.
[89J On September 11, 2007, BCE issued and posted a press release on its website
indicating that the Motion for Final Order would be presented before this Court on
                   5
October 10, 2007 •

[90] The Interim Order provides that the only persons entitled to appear and be heard
at the hearing on the Motion for Final Order shall be BCE, Purchaser, the Director
appointed pursuant to the CeCA and any person that:

           (i)    files an appearance with this Court's registry and serves same on BCE's
                  Counsel, at least seven (7) days prior to the hearing of the Motion for a
                  Final Order, failing which such Person shall not be entitled to appear; and




5     In accordance with paragraph 65 of the Interim Order,
     500-11-031130-079                                                                         PAGE: 15

            (ii)    if such appearance is with a view to contesting the Motion for a Final
                    Order, serves on BCE's Counsel, at least seven (7) days prior to the
                    hearing of the Motion for a Final Order, a written contestation supported
                    as to the facts alleged by affidavit(s), and exhibit(s) if any, failing which
                    such Person shall not be permitted to contest the Motion for a Final
                    Orde~;

    [91] The delay to appear and file a written contestation with respect to the Motion for
    Final Order expired on October 3, 2007. The Contesting Parties were the only persons
    who filed Appearances and Contestations within the stipulated delay.

    [92J By their Contestations filed in these proceedings and by the proceedings
    introductive of suit filed in each of the Related Proceedings, the Contesting Parties
    challenged the Plan of Arrangement and seek the relief more fully described in each of
    their respective proceedings.
    [93] Hearing on the Motion for Final Order commenced on October 10,2007. Seeing
    the complexity of the issues to be resolved in these and the Related Proceedings,
    hearings were continued to December 3,2007.
    [94] On November 14, 2007, Mrs. Erika S. Tiedemann served Counsel for each of
    BCE and Purchaser a document entitled, "Notice of Appearance of Erika S. Tiedemann,
    a Dissenting Shareholder". Mrs. Tiedemann seeks to contest the Plan of Arrangement
    due to what she refers to as: ... irregularities, irrationalities, contradictions, illogical reasoning,
    leading to fraudulentpractices by newcomers, foreigners... (The remaining text is deleted by
    the Court in the interest of propriety).

[95] Mrs. Tiedemann was in attendance at the resumption of hearings on December
3, 2007. After hearing her representations, the Court ruled that her Notice of
Appearance was filed beyond the delays fixed by the Court and that it was, moreover,
defective in form and substance. Accordingly, her purported intervention was dismissed.
However, with the consent of the parties, she was invited to remain in the room during
public hearings and was permitted to ask relevant questions of witnesses who appeared
on behalf of the interested parties. She availed herself of these privileges.
           (2)     The Plan of Arrangement and the Definitive Agreement

[96] The essential elements of the Plan of Arrangement and the Definitive Agreement
are not contested. The details are accurately described, in summary form, in Part 7 of
the BCE Factum. Except for some self-serving characterizations expressed by BeE
counsel, (all of which have been deleted from the following extract by the undersigned).
the summary reflects accurately the essence of the Plan of Arrangement and the
Definitive Agreement as described in the Circular.



6      Para. 67.
 500-11-031130-079                                                                      PAGE: 16

         The price to be paid by the Teachers' Consortium of $42.75 per common share
         represents a premium of approximately 40% over the price of BCE's common
         shares on the day prior to it first becoming publicly speculated that BCE might be
         subject to a change of control. This 40% premium represents approximately
         $10.2 billion in additional value to BCE common shareholders. The transaction
         proposed by the Teachers' Consortium contemplates a [...] new capital structure
         that will facilitate ongoing investment in BCE. The total capital required for the
         privatization transaction amounts to approximately $50 billion. Pro Forma for the
         transaction and acquisition financing, BCE will have $38.5 billion of debt which
         represents [approximately] 6.2x debtlEBITDA. This debt is supported by nearly
         $8 billion of new equity capital which is being committed to the transaction (one
         of the largest LBO equity commitments in history). [...]

       The senior secured debt will be unconditionally guaranteed by certain of the
        Purchaser's wholly-owned subsidiaries. This will include BCE and Bell Canada.
       However, with respect to Bell Canada, in compliance with the terms of the 1976
       Trust Indenture and the 1997 Trust Indenture, the guarantee to be given by Bell
       Canada will rank equally with the debentures issued pursuant to the 1976 Trust
       Indenture and the 1997 Trust Indenture as well as the master lease and certain
       other senior debt obligations of Bell Canada but only to the extent that the total
       amount of senior secured first lien debt of Bell Canada does not exceed the
       maximum amount permitted by section 5.09 of the 1976 Trust Indenture (the
       "Pari Passu Guarantee"). Otherwise, the guarantee will be on a senior
       subordinated basis, with respect to both the Pari Passu Guarantee and the
       existing debt under the 1976 and 1997 Trust Indentures (the "Senior
                                   tt
       Subordinated Guarantee          The Pari Passu Guarantee and the Senior
                                        ) .


       Subordinated Guarantee will rank senior with respect to Bell Canada's
       Subordinated Debentures issued under the 1996 Trust Indenture.

         In very general terms, the various steps in the Plan of Arrangement will result in:
        (i) the transfer of all common and preferred shares of BCE (collectively, the
        ..Shares") to the Purchaser in exchange for $42.75 per common share with the
        consideration paid to the preferred shareholders varying depending upon the
      . particular series of preferred shares; (ii) the Purchaser will then transfer the
        Shares to one of its Subsidiaries (" SUbco"), designated in writing prior to the
        Effective Time in consideration for the issuance of certain promissory notes and
        shares of Subco; and (iii) following the completion of the transfer of the Shares
        by the Purchaser to Subco as described above, Subco and BCE will amalgamate
        under section 192 of the CaCA to form BCE Amalco. None of the steps in the
        Plan of Arrangement involves Bell Canada, and none of the steps arranges or
       alters the rights of the Bell Debentureholders under the Trust Indentures.

       [ ...]

[97]   Pursuant to section 5.5 of the Definitive Agreement entitled "Cooperation
Regarding Reorganization", BCE agreed, upon request of Purchaser, to cause its
subsidiaries to use all commercially reasonable efforts to, inter alia, effect, in the period
immediately prior to the Effective Time, such reorganizations of their business,
 500-11-031130-079                                                            PAGE: 17

 operations and assets as Purchaser might request, acting reasonably (the "Pre-
 Acquisition Reorganization).
 [98] The obligations of BCE with respect to any Pre-Acquisition Reorganization are
 expressly conditional on, among other things, the understanding and agreement that
 any Pre-Acquisition Reorganization shall not require BCE or any subsidiary of BCE to
 contravene any applicable laws, their respective organizational documents or any
 contract (including the Bell Canada Trust Indentures). The Pre-Acquisition
 Reorganization transactions are referred to solely in the Definitive Agreement and do
 not form part of the steps contemplated to be accomplished by the Plan of Arrangement
 for which Court approval is sought.
V.     POSITIONS OF THE PARTIES
       (1)   BCE
[99J BCE maintains that it has satisfied the requirements for a corporation seeking
approval of a plan of arrangement pursuant to Section 192 CBCA.

[100] It suggests that, in considering whether the Plan of Arrangement is fair and
reasonable, the Court should attach significant weight to the vote of the shareholders
whose rights are being arranged. The BCE shareholders approved the Plan of
Arrangement and Definitive Agreement by a majority of over 97%.

[101] BCE contends, moreover, that the Contesting Debentureholders have no
standing to contest the Plan of Arrangement and should not be given the right to vote
they request, since their rights are not being "arranged" in any way. They will have the
same right to be paid principal and interest by Bell Canada after the Plan of
Arrangement is approved as they did before.

[102] BCE further contends that the Contesting Debentureholders are no different from
any other stakeholders such as employees, suppliers or other creditors whose
economic interests might be affected by the proposed transaction. Such stakeholders
are not given standing to vote on the arrangement or to oppose it in judicial
proceedings.

11031 Under reserve, BCE contends that even if the Contesting Debentureholders are
granted standing, the Plan of Arrangement is fair and reasonable and ought to be
approved by the Court.

      (2)    Purchaser
[104J Purchaser supports BCE's contentions regarding compliance with the applicable
test for a corporation seeking approval of a plan of arrangement pursuant to Section
192 GaGA.
    500-11-031130-079                                                            PAGE: 18

   [105] Purchaser contends that, by all standards, the Plan of Arrangement is
   procedurally and substantively fair and reasonable, both from the point of view of the
   Contesting Parties as well as from an overall perspective, and therefore should be
   approved by the Court.
   [106] Finally, Purchaser contends that it would be inappropriate for the Court to amend
   the Plan of Arrangement or render any orders that would have the effect of imposing
   upon Purchaser, BCE or Bell Canada terms or conditions for the proposed transaction
   that would be at a variance with those negotiated and agreed in the Definitive
   Agreement.

          (3)    1976 and 1996 Debentureholders
   [107] The 1976 and1996 Debentureholders contend that BCE has failed to discharge
   its burden of establishing that the Plan of Arrangement is fair and reasonable, not only
   for the shareholders concerned but, as well, for the Contesting Debentureholders.
   [108] They assert, moreover, that they are beneficiaries of the protective covenants
   contained in Sections 8.01 of the 1976 Trust Indenture and the 1996 Trust Indenture
   and that these covenants apply to the underlying transactions forming part of the Plan of
   Arrangement. Accordingly, they contend that the Plan of Arrangement cannot be
   sanctioned by the Court unless it is approved by the respective Trustees under each of
   the Trust Indentures ... as being in no wise [way] prejudicial to the interests of the
   Debentureholders. Such approval has not been requested by either BCE or Purchaser,
   nor has it been offered by either of the Trustees.

   [109] The 1976 and 1996 Debentureholders add that that the Plan of Arrangement and
   the underlying transactions, in particular the proposed LBO, are oppressive and unfairly
   prejudicial to the Contesting Debentureholders and that they unfairly disregard their.
   interests.

   [110] Alternatively and subsidiarily, they ask that they be made parties to the Plan of
   Arrangement and be given the right to vote thereon.

         (4)    1997 Debentureholders
  [111J The 1997 Debentureholders contend, as well, that BCE has failed to discharge
  its burden of establishing that the Plan of Arrangement is fair and reasonable, not only
  for the shareholders concerned but, as well, for the Contesting Debentureholders. They
  assert that the Plan of Arrangement and the underlying transactions are oppressive and
, unfairly prejudicial to the Contesting Debentureholders and that they unfairly disregard
  their interests.

  [112] Alternatively and subsidiarily, they ask that they be made parties to the Plan of
  Arrangement and be granted the right to vote thereon.
 500-11-031130-079                                                              PAGE: 19

        (5)     CISC Mellon & Computershare
                (I)    CISC Mel/on
 [113] At the informal request of the 1976 Debentureholders. CIBC Mellon joined them
 as co-contesting parties in their Contestation of the Motion for Final Order.

[114] CIBC Mellon takes no position other than to put forward the arguments, grounds
and position of the 1976 Debentureholders. which it adopted as its own.
[115] CIBC Mellon asserts that, to the extent that BCE or Purchaser contended that
the 1976 Debentureholders do not have standing to proceed with their Contestation,
since the Trustee is the only person charged with initiating any proceedings in relation
to the 1976 Trust Indenture, an argument on which it takes no position. it has, by
constituting itself co-contesting party, given the 1976 Debentureholders the requisite
standing.

               (ii)    Computershare
[116] By Extraordinary Resolution of the 1996 Debentureholders adopted on October
4, 2007, Computershare was instructed to join with them in their Contestation of the
Motion for Final Order.

[117] As instructed, Computershare joined the 1996 Debentureholders as co-
contesting party in order to assist them and put forward the grounds and arguments
raised in the Contestation filed on their behalf.

[118] Computershare takes no any position other than to put forward the arguments,
grounds and position of the 1996 Debentureholders. which it adopted as its own.
[119] Computershare asserts that, to the extent that BCE or Purchaser contend that
the 1996 Debentureholders do not have standing to proceed with their Contestation
since the Trustee is the only person charged with initiating any proceedings in relation
to the 1996 Trust Indenture, an argument on which it takes no position. by constituting
itself co-contesting party. it has given the 1996 Debentureholders the requisite standing.
VI.    ISSUES

[120] The issues raised for determination in the Motion for Final Order are the
following:

              (i)     Whether the Contesting Parties have standing to oppose the
                      Motion for Final Order; and

              (ij)    Whether the Plan of Arrangement respects the criteria for approval
                      under the provisions of Section 192 CaCA and, in particular,
                      whether the Plan of Arrangement is fair and reasonable.
    500-11-031130-079                                                                           PAGE: 20

    VII.    LAW AND ANALYSIS
            (i)     The Standing of the Contesting Parties
    [121] BCE contends that the Contesting Parties do not have standing to oppose the
    Motion for Final Order for a number of reasons, including:

           (a)     they are not parties to the Court supervised contract proposed to the
                   equity and equity-linked holders of BCE;

           (b)     the only rights "arranged" under the Arrangement are the rights of the
                   Shareholders and holders of Options and ECP Interests;

           (c)     BCE is not asking this Court to arrange or modify the Contesting Parties'
                   rights under the Indentures or the Bell Debentures. To the contrary. the
                   Definitive Arrangement that governs the transaction explicitly provides
                   that the terms of those Indentures must be respected, and they will be;

           (d)    their only relationship with BCE is as contingent unsecured creditors as a
                  result of a guarantee unilaterally given by BCE;

           (e)    they have no entitlement to vote upon the Arrangement; and

           (f)    the Contesting Bell Debentureholders have no standing to assert any right
                  under the Indentures. as only the trustees under those Indentures have
                  the legal capacity to do S07.

 [122] More particularly, BCE contends that the Contesting Debentureholders should
 not be given standing because the Plan of Arrangement does not involve Bell Canada
or the proposed $30 billion guarantee of the debt which Bell Canada is to assume.
While in the strict sense and from a narrow non-commercial perspective, this may be
true, there can be no doubt that in reality, this guarantee forms an integral part of the
Plan of Arrangement. The full consequences of the implementation of the Plan of
Arrangement cannot be analyzed in isolation and with commercial "blinders". They must
be analyzed in the context of the concurrent obligations assumed by BCE to cause Bell
Canada to assume $30 billion of the acquisition debt necessary to complete the Plan of
Arrangement. Implementation of the Plan of Arrangement would not be possible without
the Bell Canada guarantee.

[123] Arguments similar to those raised by BCE regarding standing on an application
to approve an arrangement were considered and rejected by the U.K. Chancery Court
(Companies Division) in Re BAT Industries Pic ("BAT,)8.

[124] In dismissing these arguments. Neuberger J. stated at page 4:


      BCE's Motion to Dismiss the Contesting Parties' Contestations (sections 75.1 and 165 of the C.c.p.
      and section 248 of the CBCA).
8     Unreported, September 3, 1998 (Chancery Division).
 500-11-031130-079                                                                      PAGE: 21

        In my judgment, while these [...] arguments have force and it will be necessaryto
        return to them, they do not lead to the conclusion for which Mr Richards
        contends, namely that it is not open to the court as a matter of principle either to
        hear, or to take into account the interests and concerns of, persons such as the .
        objectors in a case such as this.
        There is nothing in 5.425 (2) which indicates that the power of the court is to be
        fettered as to whom it can hear and what it must take into account. Given that the
        circumstances in which a company and its members may wish to come up with a
        scheme are multifarious, it seems to me scarcely surprising that the legislature
        did not consider it appropriate to lay down any limitations as to the procedure
        which the court should adopt or the factors it should take into account, when
        considering whether or not to sanction a scheme....

        [...]
        ...while it may require exceptional circumstances, it is open to the court to
        take into account the legitimate concerns of third parties in relation to a
        proposed scheme. even If they are not members of the Company.

                                                                      (emphasis added)

[125]   NeUberger J., concludes at page 5:

        Accordingly, it does appear to me that, as a matter of prinCiple, the court can take
        into account the concerns of the objectors even though they are not the
        company, or members of the company, and one can take them into account even
        though their concems arise not from the scheme itself but from a step which will
        inevitably follow if and when the scheme is implemented.

[126] BCE advances an additional reason why the Contesting Debentureholders have
no standing to assert any right under their respective Trust Indentures. It contends that,
only the trustees under the Trust Indentures have the legal capacity to do so. In the
context of the present proceedings, this argument is somewhat academic since -the
respective Trustees are parties to Contestations filed in connection with the Motion for
Final Order on behalf of each of the 1976 and the 1996 Debentureholders. The
Trustees do have standing.

[127] Although perhaps intellectually of some interest, It would serve no useful purpose
to analyze whether, in the absence of any intervention by the Trustee under the 1997
Trust Indenture, the 1997 Debentureholders have the necessary standing to contest the
Motion for Final Order

[128] In these proceedings, the Contesting Parties oppose the Plan of Arrangement as
being both unfair and oppressive. In their respective Oppression Remedies, the
Contesting Debentureholders also contend that the Plan of Arrangement is oppressive
and unfairly disregards their interests. These contentions are addressed and disposed
of in each of the judgments on the "Oppression Remedies, both of which were
dismissed.
         500-11-031130-079                                                                           PAGE: 22

         [129] Although the Court found that the conduct of BCE in the circumstances and, in
         particular, the adoption of Plan of Arrangement was not oppressive with respect to the
         Contesting Debentureholders, BCE still has the burden, in these proceedings, to prove
         that the Plan is sufficiently fair to warrant approval by this Court.

         [130] Although the actual wording of Section192 of the CBCA provides no standard for
         evaluating faimess,

               ...the jUrisprudence has established that for an arrangement to get court
               approval it must not only be not oppressive, it must be fair and reasonable''.

     [131] Thus, on the first issue raised for determination, the Court finds that the dismissal
     of both the 1976/1996 Oppression Remedy and the 1997 Oppression Remedy do not
     have the authority of "chose jugee" such as to deny the respective Trustees standing to
I    contest the Motion for Final Order. The object of the two proceedings differs as does the
     burden.

     [132] In a similar matter in Scion Capital 1O , where the contestation of a plan of
     arrangement and an oppression claim arising from the same facts were joined, Veale J.
     found that an arrangement which is fair cannot be oppressive, adding that the
     contrary is not necessarily true:

               72. The petition for oppression has been heard at the same time as the
               application for approval of the plan of arrangement. There is some relationship
               between the two proceedings in that a plan of arrangementcannot be approved if
               it is oppressive. However, if the oppression proceeding fails, it does not
               automatically result in approval of the proposed arrangement; the applicant
               must demonstrate that the requirements of s. 195 of the Y.B.C.A have been met;
               Re Canadian Pacific Ltd., cited above.

                                                                         (emphasis added)

     [133] The question to be answered is: Fairness to whom? This subject will be
     addressed under separate headings below.

               (II)    Respect of the criteria for approval of the Plan of Arrangement under
                       the provisions of Section 192 CBCA
    [134] In issuing a Final Order approving the Plan Arrangement under Section 192
    CBCA, the Court must be satisfied that:

              (1)     the statutory requirements have been fulfilled, more particularly that:

                      (a)     the Plan of Arrangement is an "arrangement" as defined in Section
                              192( 1) CeCA;


    9     Canadian Pacific Ltd. (Re), (1990) 73 O.R. (2d) 212 at 233 (H.C.J.).
    10
          Bolivar Gold Corp. v. Scion Capital, (2006) Y.J. 17 (Y.S.C.) (QL), affd (2006) Y.J. 11 (Y.CA) (QL).
 500-11-031130-079                                                                                 PAGE: 23

                   (b)     the corporation is not insolvent within the meaning of Section
                           192(2); and
                   (c)     it is not practicable for the corporation to effect a fundamental
                           change in the nature of the Plan of Arrangement under any other
                           provision of the GaGA;
           (2)     the Plan of Arrangement is put forward in good faith;
                                                                                   11
           (3)     the corporation has complied with the Interim Order               ;   and

           (4)    the Plan of Arrangement is fair and reasonable".

(1)        The statutory requirements have been fulfilled
[135J The Court was, at the time of issuance of the Interim Order, and still is of the
opinion that the requisite statutory requirements had and have been fulfilled.

           (a)     The Plan of Arrangement is an "arrangement"
[136J The Plan of Arrangement is fully described in Schedule A to AppendiX "B" of the
Circular. In essence, it involves the exchange of the common shares and the preferred
shares of BCE for cash and as well, because of subsequent transactions to be
performed, falls within the definition of an "arrangement" set out in Section 192(1) (f)
CaCA 13•


11    In the circumstances, it is appropriate to add this additional element as a condition precedent to the
      granting of the Motion for Final Order.
12    In the matter of the arrangement proposed by Abitibi Consolidated lnc., August 7, 2007, Montreal,
      500-11-030772-079 CQe. Sup.Ct.) [AbitibI]; Re Forest Gate Resources Inc., June 9,2005, Montreal,
      500-11-025537-057, SOQUIJ AZ-50322641 (Qc. Sup.Ct.) [Forest Gate]; Re Telesystem
      International Wireless Inc.• May 20,2005, Montreal, 500-11-025519-055, SOQUIJ AZ-50315604 (Oc.
      Sup.Ct.) [Te/esystem}; Re Molson Inc., J.E. 2005-241 (Qc. Sup.Ct.) [Molson No.2]; In the Matter of
      e Proposed Atrangement concerning Boomerang Tracking lnc., (2004) O.J. 11281 (Oe. Sup.Ct.) (Ol)
     [Boomerang No.ZJ; Cinar Corp. c. Shareholders of Cinar Corp., J.E. 2004-713 (Oc. Sup.Ct.) [Cinar
     No. 2]; Re St. Lawrence & Hudson Railway Co., (1998) O.J. 3934 (Ont. C.J. (Gen. Div.» (Ql) [St.
     Lawrence]; Pacifica Papers Inc. v. Johnstone, (2001) 15 B.L.R. (3d) 249 (B.C.S.C.) [Pacifica
     Papers] affd. (2001) 19 B.LR. (3d) 62 (B.C.CA); Re Tttzec Corp., (1994). 21 Alta. L.R.(3d) 435 [Trlzec].
IJ   Section 192. (1) In this section, -arraRgement" includes:
     (a) an amendment to the articles of a corporation;
     (b) an amalgamation of two or more corporations;
     (c) an amalgamation of a body corporate with a corporation that results in an amalgamated
          corporation subject to this Act;
     (d) a division of the business carried on by a corporation;
     (e) a transfer of all or substantially all the property of a corporation to another body corporate
           in exchange for property, money or securities of the body corporate;
     (f)   an exchange of securities of a corporation for property, money or other securities of the
           corporation or property, money or securities of another body corporate;
     (f.1) a going-private transaction or a squeeze-out transaction in relation to a corporation;
     (g) a liquidation and dissolution of a corporation; and
     (h) any combination of the foregoing.
     500-11-031130-079                                                                             PAGE: 24

             (b)     The Corporation is not insolvent

     [137] Section 192 (2) CaCA defines the solvency test applicable in considering the
     approval of a Plan of Arranqement".

     [138] The Court was satisfied, at the time of issuance of the Interim Order, and still is,
     that BCE was not and is not insolvent within the meaning of Section 192(2) cacA.

             (c)    It Is not practicable for the Corporation to effect a fundamental
                    change in the nature of the Plan of Arrangement under any other
                    provision of the CeCA
 [139] The "practicability test" is defined in Section 192(3) CBCA 15• The test has been
 interpreted in a broad and inclusive manner, in accordance with the policy
 considerations set out in the Po/icy concerning Arrangements under Section 192 of the
 CaCA, issued by Industry Canada (Corporations Canada) (the "Policy Statement"}":

            The Director endorses the view that the impracticability requirement means
                                                 ft
            something less than "impossible and, generally, that the test would be satisfied
            by demonstrating that it would be inconvenient or less advantageous to the
            corporation to proceed under other provisions of the Act. The Director endorses
            this view subject to a concern that the arrangement provisions of the Act not be
            utilized to subvert the procedural or substantive safeguards applicable to other
            sorts of transactions possible under the Act.

 [140J In St. Lawrence, Blair J. described the "practlcabillty" test as follows:

            The test is one of 'practicability', not 'impossibility'. The Applicants need not
            prove that the transactions contemplated in the Plan are impossible to
            accomplish in some other way: CBCA, s. 192(3): Re Trizec Corp., supra, at pp.
           440 - 441 17•

[141] In Pacifica Papers, the Court stated:
                                                                                                                  I
           (... ) [w]hat is not practical must mean not practical in a business sense so that
           reasonable and fair business objectives can be pursued by corporations without




14     Section 192(2). For the purposes of this section, a corporation is insolvent:
                                                                                                              I
                                                                                                              j
       (a) when it is unable to pay its liabilities as they become due; or
       (b) when the realizable value of the assets of the corporation are less than the
                                                                                                              I
                                                                                                              I

           aggregate of its liabilities and stated capital of all classes.


                                                                                                              I
15     Section 192(3). Application to court for approval of arrangement
       (3) Where it is not practicable for a corporation that is not insolvent to effect a fundamental
       change in the nature of an arrangement under any other provision of this Act, the corporation
       may apply to a court for an order approving an arrangement proposed by the corporation.
16     Policy Statement 15.1, November 7, 2003, s. 2.07.
17     St. Lawrence, supra note 12 at 18.
         500-11-031130-079                                                                    PAGE: 25

               onerous time and financial constraints: Ultra Petroleum Corp., Re, 2000 YTSC
                                                    18
               507 (Y.T.S.C.) at paras. 17-22.... ).
                                              (

     [142] The Court was satisfied, at the time of issuance of the Interim Order, and still is,
     that the "practicability test" of Section 192(3) CaCA has been met.

     [143] In an affidavit dated August 9, 2007, Patricia A. Olah, Corporate Secretary and
     Lead Govemance Counsel of BCE, affirms:

               32. It is impracticable, if not impossible, to effect the result contemplated by the
               Arrangement under any provision of the GaGA other than Section 192 of the
               CECA for the following reasons:

                       (a) the fact that the transaction contemplated in the Definitive Agreement
                       is dependent upon the Purchaser acquiring all of the Common Shares
                       and Preferred Shares and eliminating all of the Options and ECP
                       Interests of BCE at one time. The only practical way to achieve this is
                       through an arrangement under Section 1920ftheCSC4; and
                       (b) the fact that the Arrangement is dependent upon the completion of a
                       number of interrelated and sequenced corporate steps and it is essential
                       that no elementof the Arrangement occur unless there is certaintythat all
                       of the other elements of the Arrangement occur within the strict time
                       periods provided and in the correct order. The only practical way to
                       achieve the required certainty and timing is through an arrangement
                       under Section 192 of the GaCA;

    [144] The Court concurs with her analysis. It is uncontradicted.

              (2)      The Plan of Arrangement Is put forward in good faith
    [145] When issuing the Interim Order, the Court was satisfied that the Plan of
I   Arrangement was put forward in good faith. The shareholders have since been fairly
    and heard on the matter in accordance with recognized principles of corporate
    democracy.

    [146] The Court is particularly impressed by the fact that the shareholders approved
    the Plan of Arrangement by a majority of some 97.93%. Although, in and of itself, these
    results do not bind the Court, they are, at the very least, indicative of the acceptance by
    the shareholders of the wisdom, sincerity and good faith of the SOC and the Board in
    recommending the approval of the Plan of Arrangement.

    [147] Moreover, there is no evidence whatsoever susceptible of creating any
    reasonable doubt in the minds of an informed investor in that regard. The
    uncontradicted evidence supports BCE's contentions that the Plan of Arrangement is
    the result of an extensive, complex strategic review and auction process, whose


    18    Pacifica Papers, supra note 12 at para. 59.
     500-11-031130-079                                                                     PAGE: 26

     overriding objective was to rnaxtrruze shareholder value, while respecting the
     corporation's legal and contractual obligations.

 [148] BCE contends that this objective of maximizing shareholder value was achieved,
 while respecting the legal and contractual rights of other stakeholders, including those
 of the Contesting Debentureholders. This contention is opposed by the Contesting
 Debentureholders. The issue is summarily addressed under the next heading of this                    I
 judgment and, in greater detail, in the Related Judgments in each of the Oppression
 Remedies.                                                                                            I
           (3)      Compliance with the Interim Order
 [149] Based on the uncontradicted evidence filed in support of the Motion for Final
 Order19, the Court is satisfied that the Shareholders' Meeting was called, held and
 conducted in accordance with the provisions of the Interim Order.
                                                                                                      I
 (150] On September 11 ,2007, in accordance with paragraph 65 of the Interim Order,
 BCE issued a press release indicating that the Motion for Final Order would be heard on
 October 10,2007.
                                                                                                      I
           (4)     The Plan ofArrangement is fair and reasonable
 [151] The central issue to be determined by the Court in adjudicating the Motion for
Final Order is whether the Plan of Arrangement is fair and reasonable. The Court earlier
raised the question of "fairness to whom?" It seems only logical and "fair" to conduct this
analysis having regard to the interests of BCE and those of its shareholders and other
stakeholders, if any, whose interests are being arranged or affected.

[152] Although not having the force of law, and certainly not binding on the Court, the
Policy Statement 15.1 (Policy concerning Arrangements under Section 192 of the
GaGA) is most instructive. It sets out the position of the Director appointed under the
GaGA as to the procedural safeguards and substantive requirements applicable to
arrangements under section 192 of the GeCA. The following extracts have particular
application to the present proceedings:

          2.05 The use of the term "security holder", rather than "shareholder", in section
          192 of the Act clearly allows courts to entertain proposed arrangement
          transactions which alterdebtholders' rights.
          3.06 Generally, the Director believes that notice should be given to those security
          holders entitled to vote in respect of a plan and that all security holders affected
          by a plan (see discussion in paragraph 3.07 below) - should be entitled to vote in
          respect of that plan.




19    Affidavit of Patricia A. Otah, dated November 8,2007.
 500-11-031130-079                                                                      PAGE: 27

        3.08 Section 192 of the Act does not require security holder approval as a pre-
       condition to a court order approving an arrangement. However, the Director is
       of the view that, at a minimum, all security holders whose legal rights are
       affected by a proposed arrangement are entitled to vote on the
       arrangement. The Director is also of the view that. notwithstanding that a
       proposed arrangement may not affect the legal rights of holders of securities of a
       particular class, it may nevertheless be appropriate in cases where a proposed
       arrangement fundamentally alters the security holders' investment, whether
       economically or otherwise, that the right to vote on the arrangement should be
       provided to these security holders. [...) At the same time, the Director
       recognizes that in determining whether debt security holders should be
       provided with voting and approval rights. the trust indenture or other
       contractual instrument creating such securities should ordinarily be
       determinative absent extraordinary circumstances.
       4.01 The Director believes that in addition to demonstrating compliance with
       jurisdictional requirements (discussed above in Section 2) and statutory and
       court-ordered procedural requirements (including those designed to ensure
       procedural fairness), there rests with the applicant proposing an
       arrangement an onus to demonstrate that the proposed arrangement is fair
       from the perspective of the security holder constituencies whose rights are
       affected by the arrangement.
       4.02 Although the substantive fairness of a proposed arrangement is a
       determination ultimately to be made by the court in each particular case, the
       Director also will consider the fairness of the proposed arrangement. In the
       Director's fairness review, the Director will consider the materials provided in
       connection with the interim hearing application and, in particular, overall financial
       statements and the overall financial position of the corporation and other bodies
       corporate involved in the arrangement both before and after giving effect to the
       proposed arrangement. [...]

                                                                     (emphasis added)
[153] By letter dated January 30, 2008, addressed to Louis-Martin O'Neill, one of
BCE's counsel of record, by Christopher M. Burrell, Compliance and Policy Directorate.
Corporations Canada, on behalf of the Director, he acknowledged receipt of the relevant
materials filed in connection with the Motion for Final Order and confirmed:

      Based on the foregoing information filed in support of the final hearing, please be
      informed that the staff of the Director has determined that the Director does not
      need to appearto be heard on the application.

[154] It would appear that the Director found nothing in the materials submitted to
warrant his intervention in the fairness question. Nevertheless, the Court proposes to
consider the issue of fairness and reasonableness, (a) from the perspective of the
shareholders; and (b) from the perspective of the Contesting Debentureholders.
     500-11-031130-079                                                                         PAGE: 28

            (a)     Factors evidencing fairness and reasonableness with respect to the
                    shareholders
     [155] In Boomerang Tracking Inc. 20 the Court had occasion to review the authorities on
     the issue of fairness and reasonableness with respect to the shareholders concerned.

           17.     Although the Arrangement Resolution was adopted by a significant
           majority of the Boomerang Shareholders, the Court is not bound by the result of
           the vote if, in its opinion, the Arrangement does not meet the criteria established
           by law. However, in the circumstances of the present case, these results are a
           very important factor to be considered.

           18.    On this subject, M. & P. Martel in La compagnie au Quebec, Volume I:
           Les aspects juridiques writes at page 19-76:

                    Le vote des actionnaires n'est qu'indicatif, en ce que Ie tribunal n'est lie ni
                    par I'approbation ni meme par Ie retus dune categorie d'actions, mais il
                    est indeniab/e qu'un vote favorable unanime ou presque dissipe
                                                               a
                    genera/ement les hesitations du tribunal ratifier I'arrangement.

           19.   To determine whether a proposed arrangement is fair and
           reasonable, the Courts have applied what Is called the "business
           judgment" test. In Re Trizec, supra, Forsyth, J. writes at paragraph 31:
                    This test, which has been accepted and restated in numerous decisions,
                    boils down to whether the court may conclude that an intelligent and
                    honest business person, as a member of the class concerned and acting
                    in his or own interest, might reasonably approve of the plan.

          20.     See as well, Pacifica Papers Inc. v. Johnstone, (2001) 15 B.L.R. (3d) 249
          (B.C. S.C.), conf. by (2001) 19 B.loR. (3d) 62 (B.C.CA) and Re Canadian
          Pacific Ltd. (1996), 30 O.R. (3d) 110 (Ont. C.J.).

                                                                    (emphasis added)

[156] The Court is satisfied that the Plan of Arrangement is fair and reasonable, from
the perspective of the shareholders. In arriving at this conclusion, the Court retains the
following determinative elements put in evidence and referred to, in summary form, in
the BeE Factum:

              (a)     a premium will be paid to the Shareholders. The consideration of
                      $42.75 to be paid to the Common Shareholders pursuant to the
                      Arrangement represents a premium of approximately 40.1% over the
                      average closing price of the Common Shares for the three-month
                      period ended March 28, 2007, being the last trading day prior to any
                      public speculation of a potential privatization transaction involving
                      BCE;


20    Supra note 12 at paras 17-19.
 500-11-031130-079                                                                        PAGE: 29

              (b)      the arrangement was approved by over             97%    of the     BCE
                       Shareholders who voted on the Arrangement;

             (c)       the Definitive Agreement and the Arrangement are the culmination of
                       an exhaustive. robust strategic review and auction process, and are
                       the result of arm's length negotiations conducted among
                       representatives of BCE and the Teachers' Consortium;

             (d)       the BCE Board, which is comprised almost entirely of independent
                       directors, and the SOC instituted by the BCE Board, have determined
                       that the Arrangement is fair and reasonable in the best interests of
                       BCE and the Shareholders and unanimously recommended that
                       Shareholders vote in favour of the Arrangement;

             (e)       the BCE Strategic Oversight Committee and the BCE Board were
                       assisted throughout the strategic review and auction process by
                       expert legal and financial advisors;

             (f)       fairness opinions in respect of the consideration provided to
                       Shareholders were provided by five leading financial advisors;

             (g)       the BCE Shareholders were provided in the Circular with full
                       disclosure of all the relevant facts pertaining to the Arrangement and
                       the Definitive Agreement;

             (h)       three independent proxy solicitations firms recommended that the
                       BCE Shareholders vote in favour of the Arrangement;

             (i)       no Superior Proposal was put forward by any third party; and

             (j)       dissent rights were made available to the BCE Shareholders. Only
                       one shareholder, out of more than 600,000 Shareholders, exercised
                       her right of dissent.

                                                                   (references omitted)

       (b)          Factors evidencing fairness and reasonableness with respect to the
                    Contesting Debentureholders
 [157] As previously mentioned. the Plan of Arrangement is limited solely to the
compulsory acquisition of all outstanding shares and the acquisition or monetization of
other equity and equity-linked rights of BCE. It does not, in any way, alter or arrange the
legal rights of the Contesting Debentureholders. They have the same right to be paid
principal and interest by Bell Canada after the Plan of Arrangement is implemented as
they did before. Unlike the shareholders who will be obliged by this Court's Order, to
exchange their shares for cash, even without their consent, the rights of the Contesting
Debentureholders under the various Trust Indentures are not being altered or arranged
in anyway.
     500-11-031130-079                                                                         PAGE: 30

  [158J The fact that the BCE shareholders will receive a substantial premium on the
  previous value of their shares and that, at the present time, the economic interests of
  the Contesting Debentures may be adversely affected does not, in and of itself, give
  them the right to vote as a separate class on the Plan of Arrangement. It would be a
I foregone conclusion that, if granted the right to vote as a class, the Contesting
  Debentureholders would vote so as to defeat the Arrangement Resolution.

     [159] The Contesting Parties were not precluded from pursuing and indeed did pursue
     other appropriate remedies to advance their stated claims. A total of four other
     proceedings were instituted by them collectively, two Oppression Remedies and two
     Declaratory Motions.

 [160] In judgments rendered on each of the Declaratory Motions, the Court found,
 contrary to the contentions of the Contesting Debentureholders, that Sections 8.01 of
 the applicable Trust Indentures do not apply by reason of the implementation of the
 Plan of Arrangement and the Definitive Agreement.

 [161] In judgments rendered on each of the Oppression Remedies, the Court found
 that both claims of oppression were unfounded and that the Plan of Arrangement was
 substantively fair and reasonable to the Contesting Debentureholders. Accordingly, the
 Court concluded that they were not entitled to any rights over and above the respect of
 their contractual rights as contained in the Trust Indentures and the respect of their
 reasonable expectations, as sophisticated investors, resulting therefrom.

 [162] The Court's reasoning in judgments dismissing the 1976/1996 Oppression
 Remedy is adopted herein by reference to form part hereof. The following extracts
 which summarize the Court's views, are reproduced below for ease of reference:

          [199J   There is no serious evidence that the rights of the Contesting
          Debentureholders were disregarded by the BCE Board, let alone unfairly
          disregarded. On the contrary, the evidence discloses that their rights were in fact
          considered and evaluated. The Board concluded, justly so, that the terms of the
          1976, 1996 and 1997 Trust Indentures do not contain change of control
          provisions, that there was not a change of control of Bell Canada contemplated
          and that, accordingly, the Contesting Oebentureholders could not reasonably
          expect BCE to reject a transaction that maximized shareholder value, on the
          basisof any negative impactthem.

          [200]   "Unfairly disregard" means to ignore, to pay no attention to or to treat the
          interests of a complaining securifj'holder as being of no importance." In Brant
          Investments Ltd. v. KeepRite tnc? , the Ontario Courtof Appeal held:

                  Of course, there may be many situations where the rights of minority
                  shareholders have been prejudiced or their interests disregarded, without

21    Piller Sausages & Delicatessens Ltd. v. Cobb International Corp., (2003) 35 B.L.R. (3d) 193 at para.
      19-20 (Ont. S.C.J.) aff'd (2003) 40 B.L.R. (3d) 88 (Ont. C.A.).
22    (1991) 3 O.R. (3d) 289 at 301 (C.A.).
     500-11-031130-079                                                                         PAGE: 31

                    any remedy being appropriate. The difficult question is whether or not
                    their rights have been prejudiced or their interests disregarded 'unfairly".

           [201] It is important to retain that all three of the competing offers received from
           the private equity bidders who participated in the auction process, contemplated
           a similarly highly leveraged financing package which would have had the same
           adverse effect on the debentureholders. Should.the Board have rejected all three
           of these offers on that basis alone? The Court thinks not.

           [202] The Contesting Debenturenolders rely on the Supreme Court of Canada
           decision in Peoples in asserting that the Rev/on Duty of maximizing shareholder
           value is not the law in Canada and that the directors in the performance of their
           fiduciary duty should not be looking only to the interests of the shareholders.
           They cite the follOWing extract from Peoples, in support of their premise:

                   Insofar as the statutory fiduciary duty [so 122(1)(a) of the CBCA] is
                   concerned, it is clear that the phrase the "best interests of the
                   corporation" should be read not simply as "the best interests of the
                   shareholders". From an economic perspective, the "best interests of the
                   corporation" means the maximization of the value of the corporation .,.
                   However, the courts have long recognized that various other factors
                   may be relevant In determining what directors should consider in
                   soundly managing with a view to the best interests of the
                   corporation.

                   We accept as an accurate statement of law that in determining
                   whether they are acting with a view to the best interests of the
                   corporation it mav be legitimate. given all the circumstances of a
                   given case, for the board of directors to consider, inter alia, the
                   interests of shareholders, employees, suppliers, creditors,
                   consumers, governments and the environmenf3.

                                                                   (emphasis added)

          [203] Contrary to the views expressed by the Contesting Debentureho/ders, the
          Court finds that the rUling in Peoples is not necessarily incompatible with the
          application of the Revlon Duty by the BCE Board in accepting Purchaser's offer.
          Given all the circumstances, the Court is satisfied that the best interests of both
          BCE and Bell Canada, as well as those of its shareholders, are and will be
          served by the implementation of the Plan of Arrangement and the Definitive
          Agreement. The sole fact that the shareholders stand to benefit from the
          transaction While the debentureholders are prejudiced, in and of itself, does not
          give rise to a conclusion that the directors have not performed their fiduciary
          duties to the corporation in an appropriate manner.

          [204] It would appear that when the various arguments advanced by the
          Contesting Debentureholders in this and the other Related Proceedings are

23    Peoples Department Stores Inc. (Trustee of), [2004J 3 S.C.R. 461 at para 42 [Peoples).
 500-11-031130':079                                                                  PAGE: 32

       examined in the light of day, what in fact, is their fundamental complaint and what
       they consider unfair, is that upon completion of the Plan of Arrangement, the
       BCE common shareholders will receive a premium of approximately 40 % to the
       closing price of the shares as of March 28, 2007, the last trading day before there
       was public speculation about a possible transaction. Not only will the Contesting
       Debentureholders not participate in this substantial windfall gain by the
       shareholders but rather, based on prevailing market prices during the hearing on
       the merits of these proceedings, they will see the value of their debentures
       decline in by an average of some 18%.

       [205] The Contesting Debentureholders contend that, under certain conditions,
       Teachers', only one of the Purchaser Parties, might have been prepared to offer
       more than the $42.75 a share accepted by the Board and the shareholders. In
       such case. the Contesting Debentureholders hypothesize. their debentures could
       have been redeemed with the additional amounts available or they would have
       otherwise been compensated for their losses.

       [206] This contention is unsupported by the evidence and is pure speculation
       on their part. Although, under certain undisclosed conditions, Teachers' might
       have been prepared to pay more than the price offered and accepted, there is no
       evidence that the other Purchaser Parties would have so agreed or that the
       Contesting Debentureholders would have received the advantages they
       describe.

       [207] There was an auction process put in place by the BCE Board and the
       SOC, acting reasonably and with the advice and assistance of experienced
       advisors. Three offers were received. Purchaser's offer was deemed most
       favourable and accordingly it was accepted. That is the proof. Anything else,
       including the scenario suggested by the Contesting Debentureholders, is pure
       speculation and cannot be retained.

      [208J Subsidiarily, they argue that the total acquisition price Purchaser was
      prepared to pay should have been divided more equitably among the
      shareholders and the debentureholders. There is no legal basis for such
      assertion. Moreover, it would have been unfair to the shareholders of BCE not to
      have maximized shareholder value in order to somehow apportion some the
      benefits available from the proposed LBO "equitably", as the Contesting
      Debentureholders request, when in tact and in law, they are not entitled to
      participate in such benefits.

[163J Although they claim to be entitled to relief on grounds independent from those
raised in the Oppression Remedies, it is clear from the evidence and from their
Contestations that their opposition to the Plan of Arrangement is based substantially
upon what they believe to be the alleged oppressive and unfairly prejudicial conduct of
BCE. These very same allegations have been appropriately raised, pleaded and
disposed of in the judgments on the Oppression Remedies. Seeing the total absence of
proof of additional grounds of contestation based on fairness, other than those raised
     500-11-031130-079                                                                    PAGE: 33

     and disposed of in the Oppression Remedies, the Contestations to the Motion for Final               i

     Order must fail.

 [164] In Re. Gentra Inc. ,24 Farley J. held that rights that are not compromised by a plan
 of arrangement are not relevant at the fairness hearing. In approving a plan of
 arrangement, he refused to consider the complaints made about management since the
 right to assert those complaints was unaffected by the plan of arrangement:                             I
           It does not seem to me that such approval by the Court would preclude any
           interested party from pursuing other litigation as to non-affected rights as set out


                                                                                                         I
           in that order [Le., the final order]. Similarly, if anyone were to afterwards
           determine that there was evidence to support a claim that the M.S.P.P. condition
           was obtained on a phoney basis (although there is nothing in the material which
           would appear to support that conclusion), I would not think that this approval
           would preclude that litigation from being pursued."

 [165] The reasoning in Gentra was followed by the British Columbia Court of Appeal in
 Samos Investments Inc. v. Pattison. 26 See, as well, in this regard: PefroKhazakhstan
                                     27
 Inc. v. Lukoil Overseas Kumkol B. V. , and re Big Bear Exploration tid".

[166J In the circumstances of the present proceedings, in particular seeing the
absence of oppression and the absence of any contractual limitations contained in the
relevant Trust Indentures preventing the implementation of the Plan of Arrangement and
the Definitive Agreement, there is no justification to stretch the permissive language of
Section 192 CBCA in such manner as to grant the Contesting Debentureholders, whose
rights are not being "arranged", the right to vote as an independent class. To do so
would unjustly give the Contesting Debentureholders. a veto over a transaction with an
aggregate common equity value of approximately $35 billion that was approved by over
97% of the shareholders. Moreover, to do so would set a dangerous precedent and
could result in uncertainty and instability in the equity and debt markets for years to
come.

VIII.     COSTS

[167] In a letter dated February 12,2008, counsel. on behalf of their respective clients,
confirmed their agreement with respect to the issue of Costs associated with the
Related Proceedings in the following manner;
                                                                                                     I
                                                                                                     I
          1. all parties have agreed that the judgments on the merits (the "Judgments on
          the Merits") to be rendered in the above-captioned matters shall reserve the
          issue of costs (both with respect to the awarding and the amount thereof) such
                                                                                                     I
                                                                                                     I
24 Re. Gentra Inc., (1993) O.J. 2078 (Ont. CU. (Gen. Div.» (Ol) [Gentra].                            I
25 Ibid. at para. 35.
26 (2000) 3 B.LR. (3d) 283 (B.C.S.C.) affd (2000) 12 B.L.R. (3d) 181 (B.C.CA).
27 (2005) 12 BLR. (4th) 128 (Alta. O.B.).
28
   (2000) AR. 338 (Alta. a.B.).


                                                                                                     I
                                                                                                     I
 500-11-031130-079                                                                   PAGE: 34

       that any party to the litigation shall be entitled. following final judgment on the
       judgments on the Merits (including the determination of all appeals therefrom
       and/or the expiry of all appeal periods with respect thereto) to apply for an order
       granting costs and to fix the amount or basis for calculation of same;

       2. such application shall be made to the Honourable Joel A. Silcott, or if he is
       unable to act, to another judge of the Quebec Superior Court;



 [168] Accordingly, the Court sanctions and declares executory, the agreement as to
 Costs referred to in the above-mentioned letter.

 IX.   CONCLUSIONS

[169) I wish to express my gratitude to the experienced counsel of record for each of
the parties in these proceedings and to acknowledge their highest standards of
advocacy, professionalism and courtesy, I wish to thank, as well, their respective
associates and support staff, for the unprecedented level of excellence with which these
proceedings have been prepared and presented.

[170J Finally, I wish to thank Andrew Okladov, my clerk and Gouled Ahmed, my bailiff
for their invaluable assistance and attention throughout.



FOR THESE REASONS. THE COURT:

[171J GRANTS, in part, the Motion for Final Order,

[172] ORDERS that service of the Motion for Final Order, made in accordance with the
Interim Order, is valid and sufficient and amounts to valid service of same;

[173] DECLARES the Arrangement, as set forth in the Plan of Arrangement, Appendix
"B" to the Circular, to be duly adopted by the shareholders in accordance with the
Interim Order,

[174] DECLARES that such Arrangement conforms with the requirements of the
GaGA;

[175] DECLARES that the Arrangement, as set forth in the Plan of Arrangement, is fair
and reasonable;

[176] DECLARES that the Arrangement, as set forth in the Plan of Arrangement, is
approved and ratified;

[17 71 ORDERS that the Arrangement shall take effect, in accordance with the terms of
the Plan of Arrangement on the Effective Date, as defined therein; and
                                                                          PAGE: 35
500-11-031130-079

[178] RESERVES judgment on the issue of Costs, to be dealt with subsequently in
accordance with the terms of an agreement among counsel, confirmed in a letter dated
February 12, 2008 and sanctioned by the Court.




                                            oe::=   ~,f'~.SC'
                                                        )..                   -,       •
                                                    JOEL A. SILCOFF, J.S.C.


Me William Brock
Me Kent Thomson
Me James Doris
Me Louis-Martin O'Neill
Me Sandra Mastrogiuseppe
Me Nick Rodrigo
Me Sean Campbell
Davies Ward Phillips & Vineberg
Attorneys for BeE Inc. & Bell Canada, Petitioner

Me James A. Woods
Me Christopher Richter
Me Fran~js Touchette
Me. Bogdan Catanu
Me Sarah Woods
Woods s.e.n.c.r.l

Me Benjamin Zamett
Me Jessika Kimmel
Goodmans (Toronto)
Attorneys for 6796508 Canada Inc., (Purchaser), Mise en cause,


Me Avram Fishman
Me Mark E. Meland
Me Fabrice Benoit
Me Suzanne Villeneuve
Me Genevieve Cloutier
Me Jason Dolman
Me Panora Ang
F~hmanF~nzMe~ndPaqwn
                                                                   PAGE: 36
500-11-031130-079

Me John Finnigan
Me John Porter
Me Ray Thapar
Me Seema Aggarwal
Me Kim Ferreira
Thornton Grout Finnigan LLP (Toronto)
Attorneys for 1976/1996 Debenturehotders, Contesting Parties

Me Robert Tessier
Me Ronald M. Auclair
Miller Thomson Pouliot
Attorneys for CIBC Mellon and Computershare, Trustees

Me Markus Koehnen
Me Paul MacDonald
Me Emmanuelle Saucier
Me Brett Harrison
Me Marie-Christine Demers
McMillan Binch Mendelsohn
Attorneys for 1997 Debentureholders, Contesting Parties

Me Jacques D'Arche
Me Tommy Tremblay
Borden Ladner Gervais
Me Michael Watson
Gowlings (Toronto)
Attorneys for lenders of 6796508 Canada Inc.

Dates of hearing: October 10, 2007; December 3,4,5,6,7,10,11,12,13,14,18 & 19
                  2007;Janua~8,9. 10, 11,14,15,16,17,22,23,24,25,28,29,30
                  &31,2008

				
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