Telesat Corporation and Telesat Partnership LP

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from the take-over bid requirements in Part 2 of NI 62-104 to allow for take-over bid thresholds to be calculated based on the aggregate number of the issuer's two classes of listed securities, as opposed to on a per-class basis -- listed securities separated into two distinct classes (by Canadian status of the holder) to allow the issuer to track its Canadian shareholder composition and ensure that it maintain its status as Canadian-controlled for regulatory, financing and contractual purposes -- listed securities trade under the same ticker symbol and CUSIP, are economically equivalent and are mandatorily inter-convertible upon a change in the holder's Canadian status -- relief granted to allow offerors to calculate their ownership position by combining the outstanding listed securities of both classes for the purposes of determining whether the take-over bid requirements are triggered.

Relief from the requirement to issue and file a news release in section 5.4 of NI 62-104 to allow the threshold triggering the requirement for an acquiror to file a news release during a take-over bid or an issuer bid to be calculated based on the aggregate number of the issuer's two classes of listed securities, as opposed to on a per-class basis -- listed securities separated into two distinct classes (by Canadian status of the holder) to allow the issuer to track its Canadian shareholder composition and ensure that it maintain its status as Canadian-controlled for regulatory, financing and contractual purposes -- listed securities trade under the same ticker symbol and CUSIP, are economically equivalent and are mandatorily inter-convertible upon a change in the holder's Canadian status -- relief granted to allow acquirors to calculate their ownership position by combining the outstanding listed securities of both classes for the purposes of determining whether the requirement to file a news release during a take-over bid or issuer bid is triggered.

Relief from the issuer bid requirements in Part 2 of NI 62-104 to allow for the thresholds in the exemption for normal course issuer bids in section 4.8(3) of NI 62-104 to be calculated based on the aggregate number of the issuer's two classes of listed securities, as opposed to on a per-class basis -- listed securities separated into two distinct classes (by Canadian status of the holder) to allow the issuer to track its Canadian shareholder composition and ensure that it maintain its status as Canadian-controlled for regulatory, financing and contractual purposes -- listed securities trade under the same ticker symbol and CUSIP, are economically equivalent and are mandatorily inter-convertible upon a change in the holder's Canadian status -- relief granted to allow the issuer to calculated thresholds for the normal course issuer bid exemption in section 4.8(3) of NI 62-104 on the basis of the outstanding listed securities of both classes.

Relief from the early warning requirements in section 5.2 of NI 62-104 to allow early warning thresholds to be calculated based on the aggregate number of the issuer's two classes of listed securities, as opposed to on a per-class basis -- listed securities separated into two distinct classes (by Canadian status of the holder) to allow the issuer to track its Canadian shareholder composition and ensure that it maintain its status as Canadian-controlled for regulatory, financing and contractual purposes -- listed securities trade under the same ticker symbol and CUSIP, are economically equivalent and are mandatorily inter-convertible upon a change in the holder's Canadian status -- relief granted to allow acquirors to calculate their ownership position by combining the outstanding listed securities of both classes for the purposes of determining whether the early warning requirements are triggered.

Relief to allow the issuer to provide disclosure on significant shareholders in its information circular on a combined basis for the issuer's two classes of listed securities, rather than for each of the listed classes -- listed securities separated into two distinct classes (by Canadian status of the holder) to allow the issuer to track its Canadian shareholder composition and ensure that it maintain its status as Canadian-controlled for regulatory, financing and contractual purposes -- listed securities trade under the same ticker symbol and CUSIP, are economically equivalent and are mandatorily inter-convertible upon a change in the holder's Canadian status -- relief granted to allow the issuer to provide disclosure on its significant shareholders calculated on the basis of the outstanding listed securities of both classes in its information circular.

Relief from the prescribed restricted security term and restricted share term requirements under NI 41-101, NI 44-101, NI 51-102, and OSC Rule 56-501 -- relief granted to allow the issuers to refer to the Class B variable voting shares, Class B limited partnership units and Class C limited voting shares by those specified alternative terms.

Applicable Legislative Provisions

National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and ss. 5.2, 5.4 and 6.1.

National Instrument 51-102 Continuous Disclosure Obligations, ss. 10.1(1)(a), 10.1(4), 10.1(6) and 13.1.

National Instrument 41-101 General Prospectus Requirements, ss. 12.2(3), 12.2(4) and 19.1.

National Instrument 44-101, Short Form Prospectus Distributions, s. 8.1.

Ontario Securities Commission Rule 56-501 Restricted Shares, ss. 2.3(1)(1.), 2.3(1)(3.), 2.3(2) and 4.2.

November 16, 2021

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the "Jurisdiction") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF TELESAT CORPORATION (the "Issuer") AND TELESAT PARTNERSHIP LP (the "Partnership" and together with the Issuer, the "Filers")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that:

1. In connection with National Instrument 62-104 Take-Over Bids and Issuer Bids ("NI 62-104"):

(a) an offer to acquire outstanding Class A common shares of the Issuer (the "Class A Shares") or Class B variable voting shares of the Issuer (the "Class B Variable Voting Shares", and together with the Class A Shares, the "Listed Shares"), as the case may be, which would constitute a take-over bid under the Legislation as a result of the securities subject to the offer to acquire, together with the offeror's securities, representing in the aggregate 20% or more of the outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, at the date of the offer to acquire, be exempt from the requirements set out in Part 2 of NI 62-104 applicable to take-over bids (the "TOB Relief");

(b) an acquiror who acquires, during a take-over bid or an issuer bid, beneficial ownership of, or control or direction over, Class A Shares or Class B Variable Voting Shares, as the case may be, that, together with the acquiror's securities of that class, would constitute 5% or more of the outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, be exempt from the requirement set out in section 5.4 of NI 62-104 to issue and file a news release (the "News Release Relief");

(c) an issuer bid made by the Issuer in the normal course on a published market, other than a designated exchange, with respect to Class A Shares or Class B Variable Voting Shares, as the case may be, be exempt from the requirements in Part 2 of NI 62-104 applicable to issuer bids (the "NCIB Relief"); and

(d) an acquiror who triggers the disclosure and filing obligations pursuant to the early warning requirements set out in section 5.2 of NI 62-104 with respect to the Class A Shares or Class B Variable Voting Shares, as the case may be, be exempt from such requirements (the "Early Warning Relief");

2. The Issuer be exempt from the disclosure requirements in Item 6.5 of Form 51-102F5 Information Circular ("Form 51-102F5" and such relief, the "Continuous Disclosure Relief"); and

3. The requirements under:

(a) (i) Subsections 12.2(3) and 12.2(4) of National Instrument 41-101 General Prospectus Exemptions ("NI 41-101"), and (ii) Item 1.13(1) of Form 41-101F1 Information Required in a Prospectus ("Form 41-101F1") relating to the use of restricted security terms;

(b) Item 1.12(1) of Form 44-101F1 Short Form Prospectus (including in respect of any equivalent disclosure in a prospectus or supplement filed pursuant to National Instrument 44-102 Shelf Distributions ("NI 44-102")) relating to the use of restricted security terms;

(c) Subsections 10.1(1)(a), 10.1(4) and 10.1(6) of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102") relating to the use of restricted security terms; and

(d) Subsections 2.3(1)(1.), 2.3(1)(3.) and 2.3(2) of Ontario Securities Commission Rule 56-501 Restricted Shares ("Rule 56-501") relating to the use of restricted share terms,

shall not apply to any of the Class B Variable Voting Shares, the Class C limited voting shares of the Issuer (the "Class C Limited Voting Shares") or the Class B limited partnership units of the Partnership (the "Class B Units", and such relief, the "Nomenclature Relief", and together with the TOB Relief, the News Release Relief, the NCIB Relief, the Early Warning Relief, and the Continuous Disclosure Relief, the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, the Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Quebec, Saskatchewan and the Yukon Territory.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102, National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues ("NI 62-103"), and NI 62-104 have the same meaning if used in this decision, unless otherwise defined. The meaning of the term "Canadian" is as such term is defined in the Investment Canada Act.

Representations

This decision is based on the following facts represented by the Filers:

1. The Issuer is a corporation validly existing and in good standing under the Business Corporations Act (British Columbia).

2. The Issuer's registered office is located at 666 Burrard Street, Suite 1700, Vancouver, British Columbia, V6C 2X8 and its head office and principal place of business is located at 160 Elgin St. Suite 2100, Ottawa, Ontario, K2P 2P7.

3. The Issuer is not a reporting issuer in any jurisdiction and is not in default of any applicable requirement of securities legislation.

4. The authorized share capital of the Issuer consists of an unlimited number of super voting shares (the "Super Voting Shares"). As at November 9, 2021, there are 50 Super Voting Shares issued and outstanding, all of which are held by the incorporator of the Issuer, Henry Intven.

5. The Partnership is a limited partnership formed and in good standing under the laws of the Province of Ontario.

6. The Partnership's head office and principal place of business is located at 160 Elgin Street, Suite 2100, Ottawa, Ontario, K2P 2P7.

7. The Issuer is the general partner of the Partnership.

8. The Partnership is not a reporting issuer in any jurisdiction and is not in default of any applicable requirement of securities legislation.

The Transaction

9. The Filers are parties to a transaction agreement and plan of merger dated November 23, 2020 (the "Transaction Agreement") with Telesat Canada ("Telesat"), Telesat CanHold Corporation, Loral Space & Communications Inc. ("Loral"), Lion Combination Sub Corporation, Public Sector Pension Investment Board ("PSP Investments"), and Red Isle Private Investments Inc. ("Red Isle").

10. Loral is a corporation validly existing and in good standing under the laws of the State of Delaware.

11. Loral's principal executive office is located at 600 Fifth Avenue, New York, New York, 10020, United States of America.

12. Loral is not a reporting issuer in Canada but is a public company in the United States. Loral is not in default of any applicable requirement of securities legislation.

13. Loral's voting common shares are listed for trading on the Nasdaq Stock Exchange under the symbol "LORL".

14. Loral holds an indirect 62.6% equity interest in Telesat and an indirect 32.6% voting interest on all matters on which Telesat shareholders are entitled to vote.

15. The principal shareholder of Loral is MHR Fund Management LLC ("MHR"), a New York based private equity firm. MHR, through certain of its affiliated funds, holds approximately 39.9% of Loral's voting common shares and is the holder of all of Loral's non-voting common shares. MHR's principal executive office is located at 1345 Avenue of the Americas, 42nd Floor, New York, New York,10105, United States of America.

16. PSP Investments is a Canadian Crown corporation validly existing and in good standing under the laws of Canada. PSP Investments was established to invest funds for the pension plans of the Public Service, the Canadian Armed Forces, the Royal Canadian Mounted Police, and the Reserve Force.

17. PSP Investments' registered office is located at 1 Rideau Street, 7th Floor, Ottawa, Ontario, K1N 8S7 and its principal place of business is located at 1250 Boulevard René Lévesque West, Suite 1400, Montreal, Quebec, H3B 5E9.

18. PSP Investments holds its interest in Telesat through a wholly owned subsidiary, Red Isle. Red Isle is a corporation validly existing and in good standing under the Canada Business Corporations Act.

19. Red Isle' registered office and principal place of business is located at 1250 Boulevard René Lévesque West, Suite 1400, Montreal, Quebec, H3B 5E9.

20. Red Isle's interest in Telesat consists of a 36.7% equity interest, a 67.4% voting interest on all matters except for the election of directors, and a 29.4% voting interest for the election of directors.

21. Pursuant to the Transaction Agreement, the Filers will complete an integration transaction (the "Transaction") that will result in, among other things:

(a) the Partnership indirectly acquiring all of the equity interests of both Telesat and Loral;

(b) each common share of Loral outstanding immediately prior to the effective time of the Transaction being converted into the right to receive,

(i) if the Loral stockholder elects to receive units of the Partnership pursuant to the Transaction Agreement (a "Partnership Election"), one newly issued Class A limited partnership unit of the Partnership (a "Class A Unit") if such Loral stockholder can demonstrate that it is Canadian, and otherwise one newly issued Class B Unit, or

(ii) if the Loral stockholder makes an election to receive shares of the Issuer or does not validly make a Partnership Election, one newly issued Class A Share if such Loral stockholder can demonstrate that it is Canadian, and otherwise one newly issued Class B Variable Voting Share;

(c) Red Isle receiving a combination of Class C fully voting shares of the Issuer (the "Class C Fully Voting Shares"), Class C Limited Voting Shares (and together with the Class C Fully Voting Shares, the "Class C Shares"), and Class C limited partnership units of the Partnership (the "Class C Units") in exchange for its equity interests in Telesat;

(d) the Filers filing a joint non-offering prospectus, and upon obtaining a receipt for the final prospectus, becoming reporting issuers in the provinces and territories of Canada; and

(e) the Class A Shares and Class B Variable Voting Shares being listed for trading on the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (collectively, the "Nasdaq") and the Toronto Stock Exchange (the "TSX"), in each case, under a single ticker symbol (being, "TSAT") and CUSIP.

Share Capital of the Issuer and the Partnership

22. In connection with the completion of the Transaction, the Issuer will undertake a re-organization and file articles of amendment (the "Amended Articles"), following which the Issuer's authorized share capital will consist of: (a) an unlimited number of Class A Shares; (b) an unlimited number of Class B Variable Voting Shares; (c) an unlimited number of Class C Fully Voting Shares; (d) an unlimited number of Class C Limited Voting Shares; (e) one Class A Special Voting Share; (f) one Class B Special Voting Share; (g) one Class C Special Voting Share; (h) an unlimited number of Super Voting Shares; (i) one Golden Share; and (j) an unlimited number of "blank check" Class A Preferred Shares (the "Preferred Shares").

23. All of the outstanding Super Voting Shares will be redeemed at their issue price upon completion of the Transaction. The Amended Articles will prohibit the issuance of Super Voting Shares, and the Issuer will undertake in writing to the principal regulator that no Super Voting Shares will be issued (the "Undertaking"), which Undertaking will remain in force until such time as the Amended Articles are amended to remove the Super Voting Shares from the Issuer's authorized share capital.

24. In connection with the completion of the Transaction, the Partnership will undertake a re-organization and adopt an amended and restated limited partnership agreement (the "A&R Partnership Agreement"). Pursuant to the A&R Partnership Agreement, the authorized capital of the Partnership will consist of: (a) an unlimited number of general partnership units (the "GP Units"); (b) an unlimited number of Class A Units; (c) an unlimited number of Class B Units; (d) an unlimited number of Class C Units; and (e) an unlimited number of Class D limited partnership units (the "Class D Units").

25. Although Class D Units form part of the authorized capital of the Partnership, they can only be issued to a wholly owned subsidiary of the general partner of the Partnership immediately before the Class A Units, Class B Units and Class C Units (collectively, the "Partnership Units") cease to be outstanding.

26. The Partnership Units provide economic rights that are substantially equivalent to the corresponding rights of holders of Class A Shares, Class B Variable Voting Shares and Class C Shares (collectively, the "Issuer Shares").

27. The holders of Partnership Units are indirectly entitled to vote in respect of matters on which holders of the Issuer Shares are entitled to vote, including in respect of the election of directors of the Issuer, through the Class A Special Voting Share, the Class B Special Voting Share and the Class C Special Voting Share (collectively, the "Special Voting Shares").

28. In connection with the Transaction, the Issuer, the Partnership and the trustee (the "Trustee") of Telesat Corporation Trust (the "Trust") entered into a voting trust agreement (the "Trust Voting Agreement").

29. The Special Voting Shares are held by TSX Trust Company, the Trustee. The Special Voting Shares entitle the Trustee to that number of votes on applicable matters on which holders of Issuer Shares are entitled to vote that is equal to the number of Issuer Shares into which the Partnership Units held by such persons are convertible. Pursuant to the A&R Partnership Agreement, each holder of Partnership Units has the right to direct the Issuer as to how to instruct the Trustee to vote the voting power of the Special Voting Shares corresponding to such holder's Partnership Units.

30. Pursuant to the Trust Voting Agreement, the Trustee is required to cast such votes in accordance with voting instructions provided to it by the Issuer, in its capacity as general partner of the Partnership. In the absence of instructions from the Issuer with respect to all or any such votes, the Trustee will not exercise those votes. The Special Voting Shares cannot be sold, assigned, or otherwise transferred without the consent of the Issuer.

31. The Special Voting Shares have no material economic rights and are not entitled to receive any dividend payable by the Issuer.

32. The Filers' share structure has been implemented for the sole purposes of (a) ensuring the Filers' continued status as Canadian-controlled, (b) providing for certain favourable tax treatment for stockholders of Loral in connection with the Transaction, and (c) ensuring PSP Investments' ongoing compliance with the obligations imposed under its governing legislation.

33. The Filers are not required to be Canadian-controlled under applicable legislation or regulations. However, the Filers believe that there are benefits to being Canadian-controlled for regulatory and financing purposes and have entered into contractual arrangements with the Government of Canada that require each of them to be and remain Canadian-controlled.

34. To ensure that the Filers remain Canadian-controlled following completion of the Transaction, the Issuer will issue a Golden Share, which will be held and voted by the Trust.

35. The Golden Share is entitled to participate in a particular vote only when:

(a) in the event of a vote with respect to the election of directors of the Issuer, the number of fully diluted Class B Variable Voting Shares is greater than the aggregate number of fully diluted Class A Shares and Class C Fully Voting Shares;

(b) in the event of a vote with respect to any matter other than the election of directors of the Issuer, the number of fully diluted Class B Variable Voting Shares is greater than the aggregate number of fully diluted Class A Shares and Class C Shares; or

(c) a person who is not Canadian beneficially owns or controls more than one-third of the sum of (i) the number of votes attached to the Issuer Shares and the Special Voting Shares then outstanding, and (ii) the Golden Share Canadian Votes (as defined and described below) (such person, a "Non-Canadian Principal Shareholder" and such limitation, the "Non-Canadian Voting Limitation").

36. Voting power will be attributed to the Golden Share in two ways. First, the Golden Share will be attributed with the number of votes required to ensure that the votes cast by the holders of Class A Shares and Class A Units (indirectly via the Class A Special Voting Share), Class C Shares and Class C Units (indirectly via the Class C Special Voting Share), and the Golden Share, together, represent a simple majority of the votes cast and entitled to vote (such voting power, the "Golden Share Canadian Votes"). Second, the Golden Share will be attributed with the number of votes in excess of the Non-Canadian Voting Limitation exercised by a Non-Canadian Principal Shareholder.

37. The Golden Share voting rights will be voted pro rata consistent with the sum of the aggregate votes of the Class A Shares and the Class A Special Voting Share (in each case, excluding any votes cast by or on behalf of PSP Investments and/or its affiliates) controlled by holders who can demonstrate that they are Canadian. However, if (a) one or more holders other than PSP Investments or its controlled affiliates holds an aggregate amount of Class A Shares and/or Class A Units exceeding 5% of the aggregate number of outstanding Issuer Shares and Partnership Units taken as a whole as of the record date for the applicable vote (each such holder, a "5% Voter"), and (b) the 5% Voters together hold over 50% of the aggregate number of outstanding Class A Shares and Class A Units (in each case, excluding any Class A Shares or Class A Units held by or on behalf of PSP Investments and/or its affiliates) taken as a whole as of the record date for the applicable vote, one-half of the voting rights attached to the Golden Share will be voted pro rata consistent with the aggregate votes cast on the applicable matter as described in the first sentence of this paragraph and the other half will be voted pro rata consistent with the aggregate votes cast on the applicable matter by the holders of Class A Shares and the Class A Special Voting Share (in each case, excluding any votes cast by or on behalf of the 5% Voters and PSP Investments and/or its affiliates).

38. The Golden Share has no material economic rights and is not entitled to receive any dividend payable by the Issuer.

39. The holders of the Issuer Shares, the Special Voting Shares and the Golden Share are generally entitled to receive notice of and attend meetings of the Issuer's shareholders and receive copies of all proxy materials, information statements and other written communications given in respect of the Listed Shares.

40. The holders of Issuer Shares are entitled to one vote for each Issuer Share held at all meetings of the shareholders of the Issuer, except meetings at which only holders of another class or of a particular series have the right to vote, provided that holders of Class C Limited Voting Shares are not entitled to vote on the election of directors of the Issuer.

41. The Amended Articles provide that the holders of Issuer Shares vote together as a single class with the Partnership Units (via the Special Voting Shares), and the Golden Share, with a simple majority of votes required to pass the majority of matters (other than the election of directors of the Issuer, which shall be decided by a plurality of votes cast).

42. The Amended Articles provide that the holders of Issuer Shares are entitled to receive dividends if, as and when declared by the board of directors of the Issuer (the "Issuer's Board") out of the assets of the Issuer and payable in such manner as the Issuer's Board may determine, provide that any dividend must be declared and paid in equal amounts per Issuer Share.

43. An issued and outstanding Class A Share will immediately be converted into a Class B Variable Voting Share automatically and without any further act of the Issuer or the holder thereof if such Class A Share is or becomes beneficially owned or controlled, directly or indirectly, by a person who is not Canadian.

44. If an issued and outstanding Class B Variable Voting Share becomes beneficially owned and controlled, directly or indirectly, by a person who is Canadian, then such holder may notify the Issuer of its Canadian status and upon providing evidence satisfactory to the Issuer to confirm its Canadian status, the Class B Variable Voting Share shall convert automatically into a Class A Share.

45. If an offer is made to purchase either Class A Shares or Class B Variable Voting Shares and the offer is required to be made to all or substantially all of the holders of such class of Listed Shares under applicable securities legislation or stock exchange rules, then each share of the other class of Listed Shares, as applicable, will be convertible at the option of its holder into one Listed Share of the class for which the offer has been made at any time while the offer is in effect until one day after the time prescribed by the applicable securities legislation for the offeror to take up and pay for such Listed Shares pursuant to the offer.

46. The Class C Shares may not be held by anyone other than Red Isle or PSP Investments (or permitted transferees of either of them that are wholly owned by PSP Investments). Prior to transferring a Class C Share, Red Isle must first convert such Class C Share into a Class A Share.

47. Under the A&R Partnership Agreement, the Partnership Units are non-transferrable except in limited circumstances. Holders of Partnership Units are required to convert their Partnership Units into shares of the Issuer prior to disposition. Each Class A Unit is exchangeable for one Class A Share. Each Class B Unit is exchangeable for one Class B Variable Voting Share. Each Class C Unit is exchangeable for one Class C Fully Voting Share or one Class C Limited Voting Share, at the discretion of the holder of Class C Units.

48. Except for certain limited circumstances as set out in the A&R Partnership Agreement (i.e., issuances necessary to implement reciprocal changes to the capital of the Partnership as are adopted by the Issuer and the automatic exchanges of Class A Units and Class B Units in the event that the beneficial ownership or control of such units changes from Canadian to non-Canadian and vice versa) no additional limited partnership units of the Partnership (other than Class D Units) are permitted to be issued by the Partnership.

49. Partnership Units that are exchanged into the corresponding class of Issuer Shares will be cancelled, and such Partnership Units will not be reissued by the Partnership.

50. Upon completion of the Transaction:

(a) the Class A Shares will be held by certain former direct shareholders in Telesat and by Loral stockholders that elect to receive shares of the Issuer or fail to make a valid Partnership Election, and who, in each case, demonstrate that they are Canadian;

(b) the Class B Variable Voting Shares will be held by certain former direct shareholders in Telesat and by Loral stockholders that elect to receive shares of the Issuer or fail to make a valid Partnership Election, and who, in each case, do not demonstrate that they are Canadian;

(c) the Class C Shares will be held by Red Isle;

(d) the Class A Units will be held by the limited partners (other than Red Isle, Red Isle's permitted transferees that are wholly owned by PSP Investments, or any holder of Class D Units in their capacity as such) who can demonstrate to the Partnership that they are Canadian;

(e) the Class B Units will be held by the limited partners (other than Red Isle, Red Isle's permitted transferees that are wholly owned by PSP Investments, or any holder of Class D Units in their capacity as such) who do not demonstrate that they are Canadian;

(f) the Class C Units will be held by Red Isle or its permitted transferees that are wholly owned by PSP Investments;

(g) the GP Units will be held by the Issuer as the general partner of the Partnership.

Aggregation Relief

51. The Class A Shares and Class B Variable Voting Shares will be the only securities of the Issuer listed on a stock exchange. The Class A Shares and Class B Variable Voting Shares will be listed on the Nasdaq and the TSX and will trade under the same ticker symbol, being "TSAT", and under the same CUSIP.

52. The Issuer is not required to be Canadian-controlled under applicable legislation or regulations. However, it believes that there are benefits to being Canadian-controlled for regulatory and financing purposes and is party to contractual arrangements with the Government of Canada that require it to be and remain Canadian-controlled.

53. To maintain the Issuer's status as Canadian, the Amended Articles employ a variable voting mechanism by way of the Golden Share and the separation of its shares into classes based on the holder's status as Canadian or non-Canadian.

54. The voting power attributed to the Golden Share will vary, as described in paragraphs 35 through 37, to ensure that the aggregate number of votes cast by Canadians, including Red Isle, with respect to a particular matter, will equal a simple majority of all votes cast in respect of such matter, which may result in the dilution of the voting power of the Issuer's non-Canadian shareholders, being the holders of Class B Variable Voting Shares. Moreover, if a person who is not Canadian controls one-third or more of the votes of the Issuer Shares and the Partnership Units, any voting power of that shareholder in excess of one-third of the voting power (less one vote) of the Issuer Shares will be attributed to the Golden Share and voted by the Trustee as provided in the Amended Articles.

55. There is commonality of interest among the Listed Shares, and aside from the differences in (a) who may hold Class A Shares and Class B Variable Voting Shares, as between Canadians and non-Canadians, and (b) the potentially dilutive effect of the voting power of the Golden Share to the Issuer's non-Canadian shareholders (i.e., the holders of the Class B Variable Voting Shares) in circumstances where the Golden Share voting mechanic is triggered to ensure that the Issuer remains Canadian-controlled, the Listed Shares are the same in all respects and are mandatorily inter-convertible.

56. Although the Listed Shares are two separate and distinct classes of shares, they are economically equivalent. The relevance of the distinction between the two classes (i.e., the Canadian status of the holder) is solely for the Issuer (i.e., so that the Issuer can track its Canadian shareholder composition) but has no relevance to the holders of the Listed Shares for economic purposes.

57. An investor does not control or choose which class of Listed Shares it acquires and holds. There are no unique features of either the Class A Shares or the Class B Variable Voting Shares which an existing or potential investor can choose to acquire, exercise or dispose of. The class of Listed Shares ultimately available to an investor will solely be a function of the investor's non-Canadian status or ability to evidence its Canadian status. Moreover, if after having acquired a Class A Share an investor's Canadian status changes, the shares will convert accordingly and automatically, without formality or regard to any other consideration.

58. Pursuant to the terms of the Amended Articles, (a) Class A Shares will convert mandatorily and automatically and without any further act of the Issuer or the holder to a Class B Variable Voting Share if transferred to a non-Canadian, and (b) if a Canadian acquires a Class B Variable Voting Share, upon delivery of evidence to the Issuer that it is a Canadian, such Class B Variable Voting Share will convert mandatorily and automatically and without any further act of the Issuer or the holder to a Class A Share.

59. Administrative processes are required to ascertain whether a holder is Canadian and accordingly, no person will know the number of Class A Shares and Class B Variable Voting Shares outstanding, on a class by class basis, at any given time. However, the aggregate number of Listed Shares outstanding is and will be known at all times.

60. The Issuer has developed and adopted policies and procedures for canvassing holders of the Listed Shares on a quarterly basis to ascertain the Canadian status of the holders of the Listed Shares. In connection with proxy solicitations for matters on which shareholders of the Issuer are entitled to vote, the Issuer will request on each proxy a declaration of such shareholder's Canadian status.

Nomenclature Relief

61. Section 1.1 of NI 41-101 and section 1.1 of NI 51-102 define "restricted security terms" to mean each of the terms "non-voting security", "subordinate voting security" and "restricted voting security".

62. Section 1.1 of Rule 56-501 defines "restricted share terms" to mean "non-voting shares", "subordinate voting shares", "restricted voting shares" or any other term deemed appropriate by the Director.

63. The Class B Variable Voting Shares and the Class B Units may be considered restricted securities and restricted shares, as applicable, under NI 41-101, NI 51-102 and Rule 56-501 as the voting power of the Filers' non-Canadian shareholders, being the holders of Class B Variable Voting Shares and Class B Units, may be diluted by the voting power attributed to the Golden Share which voting power will vary to ensure that the aggregate number of votes cast by Canadians, including Red Isle, with respect to a particular matter, will equal a simple majority of all votes cast in respect of such matter.

64. There are no analogous restricted security nomenclature requirements under United States securities laws or the rules of the Nasdaq. Loral stockholders receiving Class B Variable Voting Shares or Class B Units are not required to be provided with, nor would they expect to receive, restricted security disclosure or securities bearing restricted security designations. Moreover, Loral stockholders voted to approve the Transaction (including the approval by disinterested Loral stockholders) at a special meeting of stockholders, pursuant to the mailing of a proxy statement and prospectus to Loral stockholders in which a detailed description of the Canadian-control mechanics were set out.

65. Holders of Class B Units (i.e., Loral stockholders) made an election and chose, with the benefit of detailed disclosure in the proxy statement and prospectus, to receive such Class B Units upon completion of the Transaction and to hold their interests in the Filers in the form of such securities. With the exception of certain limited circumstances set out in the A&R Partnership Agreement, Class B Units are non-transferrable and no additional Class B Units will be issued.

66. The Issuer desires to use the term "variable voting" to describe the qualified and limited rights of the Class B Variable Voting Shares resulting from the variable voting power of the Golden Share in any offering documents, future prospectuses and all future continuous disclosure documents of the Issuer.

67. The Class C Limited Voting Shares are restricted securities and restricted shares, as applicable, under NI 41-101, NI 51-102 and Rule 56-501 as the Class C Limited Voting Shares do not entitle the holder thereof to vote on the election of directors of the Issuer. The Class C Shares (including the Class C Limited Voting Shares) were included in the capital structure of the Issuer solely to ensure, at the request of PSP Investments, PSP Investments' compliance with its governing legislation with respect to the ability to elect directors; the Class C Shares serve no other purpose.

68. Under the Amended Articles, no person other than Red Isle or permitted transferees of Red Isle that are wholly owned by PSP Investments can acquire Class C Shares. In order to dispose of a Class C Share, Red Isle or PSP Investments, as the case may be, must convert the Class C Share into a Class A Share.

69. Red Isle and PSP Investments are sophisticated investors and understand the qualified and limited voting rights associated with the Class C Limited Voting Shares. PSP Investments has delivered a written acknowledgement to staff of the principal regulator to confirm and acknowledge that it understands and is aware of the limited rights of the Class C Limited Voting Shares and that it does not require the use of a prescribed restricted security term or restricted share term by the Issuer to explicitly indicate the restricted nature and rights of the Class C Limited Voting Shares.

70. The features of the Class B Variable Voting Shares, the Class B Units, and the Class C Limited Voting Shares will be set out in disclosure documents pursuant to NI 41-101, National Instrument 44-101 Short Form Prospectus Distributions, NI 44-102 and NI 51-102, as applicable, in compliance with the form requirements of such instruments.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) each of the Filers discloses the Exemption Sought and the terms and conditions of this decision in (i) the final prospectus, and (ii) each annual information form, management information/proxy circular, and other document where the characteristics of its securities are described that is filed on SEDAR following the date of this decision;

(b) no Super Voting Shares are issued and outstanding following the completion of the Transaction, the Amended Articles prohibit the issuance of Super Voting Shares, and the Issuer provides the Undertaking to the principal regulator, which will remain in force until such time as the Amended Articles are amended to remove the Super Voting Shares from the Issuer's authorized share capital;

(c) no Preferred Shares (i) carrying a greater number of votes on a per share basis, irrespective of the number or percentage of preferred shares owned, than any of the Issuer Shares, or (ii) that would cause any of the factors set out in section 4.1 of Rule 56-501 to be present in relation to any of the Issuer Shares, regardless of the existing restrictions on the Class B Variable Voting Shares and the Class C Limited Voting Shares, are issued and outstanding;

(d) with respect only to the TOB Relief, the securities subject to the offer to acquire, together with the offeror's securities, would not represent in the aggregate 20% or more of the outstanding Class A Shares and Class B Variable Voting Shares, as the case may be, calculated using (i) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares, determined in accordance with subsection 1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (ii) a numerator including as offeror's securities all of the Class A Shares and Class B Variable Voting Shares, as applicable, that constitute offeror's securities.

(e) with respect only to the News Release Relief, the Class A Shares or Class B Variable Voting Shares, as the case may be, that the acquiror acquires beneficial ownership of, or control or direction over, when added to the acquiror's securities of that class, would not constitute 5% or more of the outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, calculated using (i) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares, determined in accordance with subsection 1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (ii) a numerator including as acquiror's securities, all of the Class A Shares and Class B Variable Voting Shares, as applicable, that constitute acquiror's securities.

(f) with respect only to the NCIB Relief, the Issuer complies with the conditions in subsection 4.8(3) of NI 62-104, except that: (i) the bid is for not more than 5% of the outstanding Class A Shares and Class B Variable Voting Shares on a combined basis, as opposed to a per-class basis, and (ii) the aggregate number of Class A Shares and Class B Variable Voting Shares acquired in reliance on the NCIB Relief by the Issuer and any person acting jointly or in concert with the Issuer within any 12-month period does not exceed 5% of the outstanding Class A Shares and Class B Variable Voting Shares on a combined basis, as opposed to a per-class basis, at the beginning of such 12-month period;

(g) with respect only to the Early Warning Relief:

(i) the acquiror complies with the early warning requirements, except that, for the purpose of determining the percentage of outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, that the acquiror has acquired or disposed of beneficial ownership, or acquired or ceased to have control or direction over, the acquiror calculates the percentage using (A) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares, determined in accordance with subsection 1.8(2) of NI 62-104, on a combined basis, as opposed to a per-class basis, and (B) a numerator including, as acquiror's securities, all of the Class A Shares and Class B Variable Voting Shares, as applicable, that constitute acquiror's securities; or

(ii) in the case of an acquiror that is an eligible institutional investor, the acquiror complies with the requirements of the alternative monthly reporting system set out in Part 4 of NI 62-103 to the extent it is not disqualified from filing reports thereunder pursuant to section 4.2 of NI 62-103, except that, for purposes of determining the acquiror's securityholding percentage, the acquiror calculates its securityholding percentage using (A) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares determined in accordance with subsection 1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (B) a numerator including all of the Class A Shares and Class B Variable Voting Shares, as applicable, beneficially owned or controlled by the eligible institutional investor;

(h) with respect only to the Continuous Disclosure Relief, the Issuer provides the disclosure required by Item 6.5 of Form 51-102F5 except that for the purposes of determining the percentage of voting rights attached to the Class A Shares or Class B Variable Voting Shares, the Issuer calculates the voting percentage using (i) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares on a combined basis, as opposed to a per-class basis, and (ii) a numerator including all of the Class A Shares and Class B Variable Voting Shares beneficially owned, or over which control or direction is exercised, directly or indirectly, by any person who, to the knowledge of the Issuer's directors or executive officers, beneficially owns, controls or directs, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to the outstanding Class A Shares and Class B Variable Voting Shares on a combined basis, as opposed to a per-class basis; and

(i) with respect only to the Nomenclature Relief, (i) the Class B Variable Voting Shares be referred to as "Class B Variable Voting Shares", (ii) the Class C Limited Voting Shares be referred to as "Class C Limited Voting Shares", and (iii) the Class B Units be referred to as "Class B Units".