BCE, Bell Canada and CGI Solidify Partnership

Bell Canada and CGI Group Inc. renewed and extended on July 24, 2003, the agreements under which they respectively provide telecommunications and IS/IT services to each other and their customers. The IS/IT outsourcing agreements between Bell Canada and CGI, and between Bell Mobility and CGI, under which CGI performs a variety of IS/IT operations, maintenance and development services for Bell, have been amended and extended until June 30, 2012. Bell Canada and CGI also renewed and extended until June 30, 2012 the existing alliance agreement, which designates Bell Canada as CGI’s preferred telecommunications services provider, and under which Bell Canada and CGI collaborate to provide customers with integrated solutions offerings. In addition, Bell Canada and CGI agreed on the terms and conditions upon which they are prepared to enter into a new network services outsourcing agreement, under which CGI will outsource to Bell Canada the management of the telecommunications network used by CGI to provide services to its customers. This agreement will have a term ending June 30, 2012. As part of their renewed relationship, Bell Canada and CGI agreed to work together to develop and exploit certain of their intellectual property assets.

In addition, BCE Inc. and CGI signed a new shareholder’s agreement with respect to BCE’s 29.87 per cent ownership in CGI, replacing the prior agreement among BCE, CGI and CGI’s three majority shareholders. Under this agreement: the put and call options with CGI’s majority shareholders under this prior agreement were cancelled; BCE converted all its 7,027,606 CGI class B multiple voting shares into CGI class A single voting shares on a one-for-one basis; BCE agreed to maintain its equity interest (as a percentage of the total outstanding class A shares and class B shares) below 30 per cent on January 5, 2004, as a result of which the automatic conversion of all class B shares into class A shares (which would occur on January 5, 2004 under CGI’s “articles of incorporation” if on that date BCE’s total equity ownership in CGI were 30 per cent or more) will not occur; certain shareholder rights were provided to BCE, including pre-emptive rights, representation on CGI’s board of directors, and consent rights over certain significant transactions; and the restrictions on any future sale by BCE of its shares in CGI under the prior agreement were removed, and BCE agreed that any such future sale would be done in an orderly manner.

The share purchase value of the deal was $89 million and the outsourcing value was undisclosed.
Bell Canada was represented in-house by Gordon Ackroyd, senior counsel, Jane Luck, assistant general counsel, and Pascale Chapdeleine, executive director, intellectual property, BCE; and by Blake, Cassels & Graydon LLP in Toronto and Montreal, with a team led by Richard Corley and including Christine Ing, Sunny Handa, Marie-Hélène Constantin and Marie Sabourin. BCE was represented in-house by Patricia Olah, vice-president, corporate affairs, BCE Ventures Inc.; and by Francis Legault and Norman Steinberg of Ogilvy Renault in Montreal.

CGI was represented in-house by André Bourque, senior vice-president and CLO; and by McCarthy Tétrault LLP in Montreal, with a team led by Jean-René Gauthier and including Isabelle Synnott, George Maziotis and Mélanie Bernier.