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Exhibit 4.26

PRIVATE & CONFIDENTIAL
Delivered in person

March 2^nd, 2005

Pierre St-Arnaud
President & Chief Executive Officer
SR Telecom Inc.

Dear Pierre:

As you are aware, SR Telecom Inc. is currently going through a very challenging time, given the need to refinance and reorganize its Business structure. We recognize that this is a very difficult period and appreciate the on-going commitment and contribution of all SR Telecom's employees.

However, we must secure our future Business activities going forward and protect our capability to serve our customers in the manner we wish to as we finally go on with our Business. As such, the Board of Directors of SR Telecom Inc. has agreed to implement a retention bonus plan for a group of employees which will ensure that we secure our core expertise and key know-how during that period. As the President and Chief Executive Officer of the Company, the Board has agreed to provide you with a retention premium for a period of ten (10) weeks commencing Monday, February 28, 2005. In your case, this premium will be defined as the full repayment (principal amount plus outstanding interests up to today) on the loan you have entered into on July 3^rd 2001 for $70,000 and the loan entered into on June 13, 2002 for $34,000. (copy attached).

The condition for you to obtain the written confirmation that those two loans are fully paid back is that you maintain your active employee status and fulfil your responsibilities as the President and CEO of SR Telecom Inc. Consequently, should you leave the Company on you own will, between now and May 6^th, 2005, you will have to reimburse the two loans plus interests according to the agreements signed at the time you entered into those loans.

Please note that, the information contained in this letter is specific to yourself and you are required to maintain its receipt and contents in the strictest confidentiality.

To conclude, we trust that this special program will provide you with a greater level of comfort commensurate with our mutual appraisal of your personal and professional circumstances. We appreciate your on-going contribution and know we can count on your support during this period of transition and challenges.

Regards,

/s/ LIONEL HURTUBISE Lionel Hurtubise

Chairman of the Board of Directors
SR Telecom Inc.

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Exhibit 4.26