MANAGEMENT SERVICES AGREEMENT

THIS MANAGEMENT SERVICES AGREEMENT (“Agreement”) is made and entered into as of May 19, 2005 (“Effective Date”) by and among Acceris Management and Acquisition LLC, a Minnesota limited liability company (“Manager”), Acceris Communications Corp., a Delaware corporation (“Company”), Acceris Communications Inc., a Florida corporation (“ACI,” and together with the Company, the “Sellers”), Counsel Corporation, an Ontario, Canada company (“Counsel”) (collectively the Company, ACI and Counsel are the “Company Parties”), and, for the sole purpose of making the guaranty contained in Section 22, North Central Equity LLC, a Minnesota limited liability company (“Guarantor”).

WHEREAS, the Sellers have agreed to retain the Manager to manage the Company during the interim period from the Execution Date to the Closing Date under the Asset Purchase Agreement (the “Purchase Agreement”) among the Company Parties and the Manager.

WHEREAS, the Closing under the Purchase Agreement will not occur until after, among other things, the receipt of all governmental consents required by the Purchase Agreement and the approval of ACI’s stockholders;

WHEREAS, the Sellers desire to utilize Manager’s services on an exclusive basis to manage, to fullest extent permissible under Law (as defined below), the operations of the Company pending receipt of the foregoing consents and approvals and Manager desires to provide such services to the Company on the terms and subject to the conditions stated herein.

NOW, THEREFORE, in consideration of the above recitals and mutual promises and other good and adequate consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

1.    Definitions. “Funds Advance” means for any period of calculations for the Company the sum of: (i) operating cash flow as determined in accordance with GAAP, (ii) actual capital expenditures as determined in accordance with GAAP, (iii) payments with respect to the Leases and Personal Property Leases, and (iv) reductions in the Wells Fargo, Inc. asset based loan facility, less any payments made by the Manager in respect of Excluded Liabilities. Payments by Manager or Company of Excluded Liabilities shall not be deemed to be or included in the definition of Funds Advance. Capitalized terms used in this Agreement and not otherwise defined shall have the meaning assigned in the Purchase Agreement.

2.    Compliance with Applicable Laws and Regulations.

2.1    The Company Parties and Manager desire that this Agreement and the obligations performed hereunder be in substantial and good faith compliance with (i) all applicable rules, regulations and policies of the Federal Communications Commission (“FCC”) and any state public utility commission(s) (the “State PUC(s)”); (ii) the Communications Act of 1934, as amended (the “Act”), 47 U.S.C 151, et seq., (iii) applicable state and provincial laws applicable to the Company Parties and (iv) any other applicable Canadian or US federal, state and local law, regulation or policy (collectively, “Law(s)”).

2.2    It is expressly understood by the parties that nothing in this Agreement is intended to give Manager any right that would be deemed to constitute a transfer of control (as is defined in the Act and/or any applicable FCC or other relevant Law) of any of the applicable licenses from the Company to Manager to the extent prohibited by applicable Law. Each party shall perform its obligations under this Agreement in accordance with applicable Law.

2.3    If the FCC or any State PUC or other governmental body of competent jurisdiction determines that a provision of this Agreement violates any applicable Law, or if the staff of the FCC or any State PUC has advised the parties, orally or in writing, that the review of any request by the parties for authority for the transactions contemplated hereby will be inordinately delayed or will likely be determined adversely to the parties, the parties will use their respective reasonable efforts to negotiate in good faith to modify this Agreement to the minimum extent necessary so as to comply with such order, decree, action or determination and/or remove any controversy identified by the FCC or a State PUC without material economic detriment or effect to either party, and to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. This Agreement, as so modified, shall then continue in full force and effect.

3.    Appointment of Manager. The Sellers hereby appoint Manager, to the fullest extent permissible under Law, as the sole and exclusive provider of all services necessary or appropriate for the supervision and management of the Company, as described more fully in Section 4 (the “Services”). The Company Parties consent to and agree to the appointment of the Manager. Manager hereby accepts such appointment on the terms and subject to the conditions stated herein.

4.    Scope of the Services.

4.1    Management. During the Term (defined below), and under the supervision, control and direction from time to time of the Company and the Company’s Board of Directors and by its Designated Executive (as defined below), Manager shall establish and implement operational policies and provide general management and direction of the day-to-day operations of the Company and shall exercise general supervision and direction of the Company and the affairs of the Company to the fullest extent permissible under Law and shall make decisions with respect to operations of the Company, subject to the reporting duties to the Designated Executive (defined below) and the Company’s Board of Directors.

(a)    Manager agrees to report regularly at mutually agreeable times to the Company’s chief executive officer or a designee of the chief executive officer (“Designated Executive”) concerning the status of the operations of the Company, but no less frequently than bi-monthly, unless such update is waived by the Company or the Company Parties.

(b)    It is understood that the Sellers have not given Manager any authority to pay or cause the Company to pay any Excluded Liabilities, and that the Sellers have instructed Manager that Manager shall not cause the Company to pay any Excluded Liabilities.

(c)    Manager shall manage the Company and report to the Designated Executive from time to time as provided for in this Agreement and shall use its best efforts to manage the Company in substantial good faith compliance with its obligations under this Agreement. Manager shall use its good faith best efforts to manage the responsibilities of operating and managing the Company’s operations under this Agreement. Day to day operations shall include customer billing, management of Company cash flows and cash collections and outflows, processing employee payroll and other related duties.

5.    Responsibilities of the Company. During the Term the Company Parties shall assist and fully cooperate on a timely basis with Manager in its performance of the Services. Time is of the essence under this Agreement and all Company Parties will work diligently to make decisions and execute any agreements or action plans for the Company in as reasonably expeditious manner as reasonably possible to allow Manager to perform the Services. The Company Parties shall have the Designated Executive [available either on site or by telephone during all regular business hours and such Designated Executive shall have full and complete authority to bind the Company to decisions regarding operation of the Company, check signing for the Company, and contractual obligations or agreements that the Manager recommends that the Company execute or perform during the Term. To the extent that, in the reasonable opinion of Manager, the Designated Executive is not reasonably fulfilling these cooperation, signing or approval requirements under this Agreement to allow the Manager to successfully perform its duties under this Agreement, the Manager’s obligation to advance funds under the second sentence of Section 7 shall cease until such time as the Company Parties have cured or remedied such decision making issue to the reasonable satisfaction of the Manager. Without limiting the foregoing, the Company Parties shall undertake the following responsibilities to assist the Manager and to allow the Manager to manage the day to day operations of the Company:

(a)    shall provide Manager with all information and materials in their possession or subject to their control to enable Manager to provide the Services under this Agreement;

(b)    shall perform any acts reasonably necessary to conduct the operations of the Company, excluding those acts that are to be performed by Manager in connection with the Services, pursuant to and in accordance with the request of Manager;

(c)    shall continue to communicate with third parties, including state and federal regulatory commissions, in cooperation with Manager, including responding to their inquiries, requests and correspondence;

(d)    shall promptly inform Manager, and provide Manager with copies of, all correspondence and communications relating to the Company from third parties; and

(e)    At the request of Manager, they shall cause the Company to timely exercise rights it has under any of the contracts or agreements of the Company, including, but not limited to, rights, whether in law or equity, with respect to breach, termination, set-off, indemnity, waiver, sub-contracting and assignment and shall execute commitments, agreements, contracts, instruments or agreements as are reasonable for operation of the Business and are requested by the Manager.

(f)    shall be responsible for preparing and filing federal, state or local income tax returns due during the Term of this Agreement.

(g)    Sellers currently maintain directors and officer’s liability, commercial general liability and umbrella liability insurance policies related to the operations of the Company. Sellers shall use their commercially reasonable best efforts to cause the Manager to be named as an additional insured, with respect to this Agreement, under the foregoing policies and to give to Manager  endorsements naming the Manager as an additional insured. Manager shall pay any related premium or other charge required by any insurer or agent.

6.    Independent Contractor Status. Manager is an independent contractor in the performance of the Services under this Agreement and shall determine the method, details and means of performing the Services. Without limiting the generality of the foregoing, Manager shall be permitted, in its sole discretion, but in no way shall be required to (i) enter into and perform contracts and agreements in its own name for the furnishing of services, equipment, parts and supplies in connection with the Services, and (ii) recruit and hire and terminate its own employees and independent contractors to provide the Services. Manager shall solely establish the terms and conditions of employment for its employees and shall pay all salaries and other compensation due to such employees.

7.    Compensation. As its compensation for the Services, the Company shall pay Manager a fee equal to the net income (determined according to GAAP) of the Company during the Term, plus 5% of such net income (the “Fee”). It is further agreed that in performing the Services, Manager will provide to or procure for the Company funds in an amount equal to the Funds Advance. The parties agree that if the net income of the Company is not sufficient to entitle Manager to the Fee, then Manager shall not be entitled to the Fee or any reimbursement from Company Parties for funds it may have advanced to or for the Company under this Agreement and that such advances instead shall be considered non-reimbursable expenses incurred by Manager in the performance of this Agreement. Nothing herein shall be construed to limit Managers right to recover the Break Up Fee, it being expressly understood that that Manager’s right to recover the Break Up Fee survives this Section 7 and is in no way limited by this Section 7.

8.    Expenses. Except as may be otherwise specifically provided herein, the parties hereto shall pay their own legal fees, accounting and other expenses incurred in connection with the negotiation and consummation of the transactions contemplated by this Agreement.

9.    Term. The term of this Agreement (the “Term”) shall commence on the Effective Date hereof and shall expire upon the earlier of: (i) the Closing Date; or (ii) the termination of the Purchase Agreement pursuant to the terms thereof. Upon the termination of this Agreement, neither party shall be further obligated under this Agreement except for the parties’ respective indemnification obligations set forth in Section 10.

10.    Indemnification.

(a)    Subject to the other terms and conditions contained in this Agreement, the Company Parties will indemnify, defend and hold harmless the Manager and any of its Affiliates from and against any and all damages, liabilities, losses, costs and expenses (including all reasonable attorneys’, fees and costs) (collectively, “Losses”) incurred by the Manager arising our of or related to (i) the Company Parties’ breach of this Agreement, or (ii) the defense or disposition of any action, claim, suit, demand, litigation, arbitration, mediation or other proceeding initiated by a third party by or before any governmental entity or arbitral forum (each, an “Action”), whether civil, administrative, investigative or criminal, out of or related to the Manager’s performance under this Agreement or relating to the operations of the Company by the Company Parties. In the event Manager requests indemnification from the Company Parties with respect to the defense of any Action, the Company Parties shall advance such defense costs as Manager may reasonably request. If the Company Parties do not advance such defense costs, Manager shall have no obligation to cooperate or provide information to th