----

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| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------|

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TABLE OF CONTENTS

|        ARTICLE 1 |  DEFINITIONS AND PRINCIPLES OF      INTERPRETATION |
|-----------------------|---------------------------------------------------------|

|   | 1.1 | Definitions  |
|--------|-----|-------------------|

|   | 1.2 | Certain Rules of  Interpretation  |
|--------|-----|----------------------------------------|

|   | 1.3 | Knowledge  |
|--------|-----|-----------------|

|   | 1.4 | EntireAgreement  |
|--------|-----|-----------------------|

|   | 1.5 | Schedules  |
|--------|-----|-----------------|

|        ARTICLE 2 | PURCHASE AND SALE |
|-----------------------|-------------------|

|   | 2.1 | Action by Vendors and  Purchaser  |
|--------|-----|----------------------------------------|

|   | 2.2 | Place ofClosing  |
|--------|-----|-----------------------|

|   | 2.3 | RestrictedRights  |
|--------|-----|------------------------|

|   ARTICLE 3 |  PURCHASE PRICE |
|------------------|----------------------|

|   | 3.1 | Estimated Base Purchase  Price  |
|--------|-----|--------------------------------------|

|   | 3.2 | Satisfaction of the Purchase  Price  |
|--------|-----|-------------------------------------------|

|   | 3.3 | Delivery of Closing Date Financial      Statements  |
|--------|-----|----------------------------------------------------------|

|   | 3.4 | Net Working Capital and Long-Term Debt      Adjustments |
|--------|-----|---------------------------------------------------------|

|   | 3.5 | Objection to Closing Date Financial      Statements  |
|--------|-----|-----------------------------------------------------------|

|   | 3.6 | Appointment of Vendors  Representative  |
|--------|-----|----------------------------------------------|

|        ARTICLE 4 |  REPRESENTATIONS AND WARRANTIES OF THE      VENDORS |
|-----------------------|----------------------------------------------------------|

|   | 4.1 | Incorporation and Corporate  Power  |
|--------|-----|------------------------------------------|

|   | 4.2 | Registration  |
|--------|-----|--------------------|

|   | 4.3 | Incorporation, Corporate Power and Registration of the      Subsidiaries  |   |
|--------|-----|--------------------------------------------------------------------------------|--------|

|   | 4.4 | Subsidiaries  |
|--------|-----|--------------------|

|   | 4.5 | Residence of theVendors  |
|--------|-----|-------------------------------|

|   | 4.6 | Status of the Vendors and Right to    Sell  |
|--------|-----|--------------------------------------------------|

|   | 4.7 | SecuritiesLaws  |
|--------|-----|----------------------|

|   | 4.8 | Capitalization  |
|--------|-----|----------------------|

|   | 4.9 | DueAuthorization  |
|--------|-----|------------------------|

|   | 4.10 | Enforceability of  Obligations  |
|--------|------|--------------------------------------|

|   | 4.11 | Absence ofConflicts  |
|--------|------|---------------------------|

|   | 4.12 | RegulatoryApprovals  |
|--------|------|---------------------------|

|   | 4.13 | FinancialStatements  |
|--------|------|---------------------------|

|   | 4.14 | Monthly Financial  Statements  |
|--------|------|-------------------------------------|

|   | 4.15 | Absence of Undisclosed  Liabilities  |
|--------|------|-------------------------------------------|

|   | 4.16 | Absence of Changes and Unusual      Transactions  |
|--------|------|--------------------------------------------------------|

|   | 4.17 | Non-Arm’s Length  Transactions  |
|--------|------|--------------------------------------------|

|   | 4.18 | No Joint Venture Interests or Strategic      Alliances  |
|--------|------|--------------------------------------------------------------|

|   | 4.19 | ProductWarranties  |
|--------|------|-------------------------|

|   | 4.20 | Absence ofGuarantees  |
|--------|------|----------------------------|

|   | 4.21 | Major Suppliers and  Customers  |
|--------|------|--------------------------------------|

|   | 4.22 | Sufficiency ofAssets  |
|--------|------|----------------------------|

|   | 4.23 | Title to CertainAssets  |
|--------|------|------------------------------|

|   | 4.24 | Condition of Certain  Assets  |
|--------|------|------------------------------------|

|   | 4.25 | Location of theAssets  |
|--------|------|-----------------------------|

----

|   | 4.26 | Inventories  |
|--------|------|-------------------|

|   | 4.27 | Collectibility of Accounts    Receivable  |
|--------|------|------------------------------------------------|

|   | 4.28 | GovernmentGrants  |
|--------|------|------------------------|

|   | 4.29 | Business in Compliance with  Law  |
|--------|------|----------------------------------------|

|   | 4.30 | Governmental  Authorizations  |
|--------|------|------------------------------------|

|   | 4.31 | RestrictiveCovenants  |
|--------|------|----------------------------|

|   | 4.32 | IntellectualProperty  |
|--------|------|----------------------------|

|   | 4.33 | Owned RealProperty  |
|--------|------|--------------------------|

|   | 4.34 | Leased RealProperty  |
|--------|------|---------------------------|

|   | 4.35 | EnvironmentalMatters  |
|--------|------|----------------------------|

|   | 4.36 | EmploymentMatters  |
|--------|------|-------------------------|

|   | 4.37 | CollectiveAgreements  |
|--------|------|----------------------------|

|   | 4.38 | Pension and Other Benefit  Plans  |
|--------|------|----------------------------------------|

|   | 4.39 | PersonalInformation  |
|--------|------|---------------------------|

|   | 4.40 | Insurance  |
|--------|------|-----------------|

|   | 4.41 | Contracts  |
|--------|------|-----------------|

|   | 4.42 | Litigation  |
|--------|------|------------------|

|   | 4.43 | Tax Matters  |
|--------|------|-------------------|

|   | 4.44 | Books andRecords  |
|--------|------|------------------------|

|   | 4.45 | CorporateRecords  |
|--------|------|------------------------|

|   | 4.46 | TradeAllowances  |
|--------|------|-----------------------|

|   | 4.47 | Bank Accounts,etc.  |
|--------|------|--------------------------|

|   | 4.48 | Powers ofAttorney  |
|--------|------|-------------------------|

|   | 4.49 | NoBankruptcy/Insolvency  |
|--------|------|-------------------------------|

|   | 4.50 | No Broker  |
|--------|------|-----------------|

|   | 4.51 | Note      1: Contains confidential employee related information along with      Vendor's confidentialinformation  |
|--------|------|------------------------------------------------------------------------------------------------------------------------|

|   | 4.52 | Note      1: Contains confidential employee related information along with      Vendor's confidentialinformation  |
|--------|------|------------------------------------------------------------------------------------------------------------------------|

|   | 4.53 | FullDisclosure  |
|--------|------|----------------------|

|        ARTICLE 5 |  REPRESENTATIONS AND WARRANTIES OF THE      PURCHASER |
|-----------------------|------------------------------------------------------------|

|   | 5.1 | Status of thePurchaser  |
|--------|-----|------------------------------|

|   | 5.2 | Due Authorization             |
|--------|-----|-------------------------------|
|   | 5.3 | Ehforceability of Obligations |
|   | 5.4 | Absence ofConflicts      |

|   | 5.5 | RegulatoryApprovals  |
|--------|-----|---------------------------|

|   | 5.6 | No Broker  |
|--------|-----|-----------------|

|   | 5.7 | SecuritiesLaws  |
|--------|-----|----------------------|

|        ARTICLE 6 | NON-WAIVER; SURVIVAL |
|-----------------------|----------------------|

|   | 6.1 | Non-Waiver  |
|--------|-----|------------------|

|   | 6.2 | Nature andSurvival  |
|--------|-----|--------------------------|

|        ARTICLE 7 |  PURCHASER’S CONDITIONS  PRECEDENT |
|-----------------------|-----------------------------------------------|

|   | 7.1 | Truth and Accuracy of Representations of Vendors at the      Closing Time  |
|--------|-----|---------------------------------------------------------------------------------|

|   | 7.2 | Performance ofObligations  |
|--------|-----|---------------------------------|

----

|   | 7.3 | Receipt of Closing  Documentation  |
|--------|-----|-----------------------------------------|

|   | 7.4 | Opinions ofCounsel  |
|--------|-----|--------------------------|

|   | 7.5 | Consents, Authorizations and      Registrations  |
|--------|-----|-------------------------------------------------------|

|   | 7.6 | NoProceedings  |
|--------|-----|---------------------|

|   | 7.7 | Encumbrances and  Guarantees  |
|--------|-----|------------------------------------|

|   | 7.8 | Non-Competition  |
|--------|-----|-----------------------|

|   | 7.9 | Releases  |
|--------|-----|----------------|

|   | 7.10 | KeyEmployees  |
|--------|------|--------------------|

|   | 7.11 | No Material Adverse  Effect  |
|--------|------|-----------------------------------|

|   | 7.12 | Directors and Officers of the Corporation and of the      Subsidiaries  |
|--------|------|------------------------------------------------------------------------------|

|   | 7.13 | GoodStanding  |
|--------|------|--------------------|

|   | 7.14 | Stock OptionPlan  |
|--------|------|------------------------|

|   ARTICLE 8 | VENDORS’ CONDITIONSPRECEDENT |
|------------------|------------------------------------|

|   | 8.1 | Truth and Accuracy of Representations of the Purchaser at      Closing Time  |
|--------|-----|-----------------------------------------------------------------------------------|

|   | 8.2 | Directors and Officers of the Corporation and of the      Subsidiaries  |
|--------|-----|------------------------------------------------------------------------------|

|   | 8.3 | NoProceedings  |
|--------|-----|---------------------|

|   | 8.4 | EscrowAgreement  |
|--------|-----|-----------------------|

|   | 8.5 | Performance ofObligations  |
|--------|-----|---------------------------------|

|        ARTICLE 9 |  OTHER COVENANTS OF THE  PARTIES |
|-----------------------|---------------------------------------|

|   | 9.1 | Tax Returns  |
|--------|-----|-------------------|

|        ARTICLE 10 |  INDEMNIFICATION |
|------------------------|-----------------------|

|   | 10.1 | Indemnification by the  Vendors  |
|--------|------|---------------------------------------|

|   | 10.2 | Indemnification by the  Purchaser  |
|--------|------|-----------------------------------------|

|   | 10.3 | Indemnification Procedures for Third Party      Claims  |
|--------|------|--------------------------------------------------------------|

|   | 10.4 | Set-Off  |
|--------|------|---------------|

|   | 10.5 | Tax Status of Indemnification    Payments  |
|--------|------|-------------------------------------------------|

|        ARTICLE 11 |  GENERAL |
|------------------------|---------------|

|   | 11.1 | Arbitration  |
|--------|------|-------------------|

|   | 11.2 | PublicNotices  |
|--------|------|---------------------|

|   | 11.3 | Expenses  |
|--------|------|----------------|

|   | 11.4 | Notices  |
|--------|------|---------------|

|   | 11.5 | Assignment  |
|--------|------|------------------|

|   | 11.6 | Enurement  |
|--------|------|-----------------|

|   | 11.7 | Amendment  |
|--------|------|-----------------|

|   | 11.8 | FurtherAssurances  |
|--------|------|-------------------------|

|   | 11.9 | Execution andDelivery  |
|--------|------|-----------------------------|

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| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------|

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| A. | The      Vendors beneficially own and control all of the issued and outstanding      shares of the Corporation. |
|----|-----------------------------------------------------------------------------------------------------------------|

| B. | The      Vendors have agreed to sell to the Purchaser and the Purchaser has agreed      to purchase from the Vendors all of the issued and outstanding shares of      the Corporation, on the terms and conditions of this      Agreement. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ARTICLE 1

| 1.1   | Definitions |
|-----------------|-------------|

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| (i)   | as      at the Closing Date: |
|-----------------|------------------------------|

| (a)   | Note      3 |
|-----------------|-------------|

| (b)   | Note      3 |
|-----------------|-------------|

| (c)   | Note      3 |
|-----------------|-------------|

| (d)   | Note      3 |
|-----------------|-------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

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| (e)   | Note      3 |
|-----------------|-------------|

| (f)   | Note      3 |
|-----------------|-------------|

| (g)   | Note      3 |
|-----------------|-------------|

| (h)   | Note      3 |
|-----------------|-------------|

| (ii)   | Note      3 |
|------------------|-------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

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4.32(g)(iii)

4.32(g)(iii)

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| (a)   | any      environmental, health or safety matter or condition (including on-site or      off-site contamination, occupational safety and health and regulation of      any chemical substance or product); |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | any      fine, penalty, judgment, award, Orders, settlement, legal or      administrative proceeding, damages, loss, claim, demand or response,      remedial or inspection cost or expense arising under any Environmental Law      or Occupational Safety and HealthLaw; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | any      Remedial Action; or |
|-----------------|------------------------------|

| (d)   | any      other compliance, response corrective or remedial measure required under      any Environmental Law or Occupational Safety and Health    Law; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

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| (a)   | having      jurisdiction on behalf of any nation, province, territory or state or any      other geographic or political subdivision of any of them;    or |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | exercising,      or entitled to exercise any administrative, executive, judicial,      legislative, policy, regulatory or taxing authority or    power; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (a)   | inventions,      algorithms, methods, procedures, techniques, instructions, guides,      manuals, samples, specifications, schematics, invention disclosures,      statutory invention registrations, trade secrets and confidential business      information, know-how, manufacturing and product processes and techniques,      research and development information, records, financial, marketing and      business data, pricing and cost information, business and marketing plans      and customer and supplier lists and information, whether patentable or      non-patentable, whether copyrightable or non-copyrightable and whether or      not reduced to practice; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | patents,      pending patent applications, utility models, design registrations and      certificates of invention and other governmental grants for the protection      of inventions or industrial designs (including divisionals, reissues,      renewals, re-examinations, continuations, continuations-in-part and      extensions) (collectively, "Patent      Rights"); |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | trade-marks      and service marks, trade dress, trade-names, corporate names, business      names, doing business designations, logos, slogans, distinguishing guises,      other indicia of origin and all registrations and applications for      registration thereof, common law trademarks and service marks and all      goodwill associated with the foregoing (collectively "Trademarks"); |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | copyrights      and all other rights of authorship and registrations thereof, designs,      drawings, Software, data and database rights and registrations and      applications for registration thereof (collectively, “Copyrights”); |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | industrial      designs and all registrationsthereof; |
|-----------------|-------------------------------------------------------|

| (f)   | Information      Technology and all registrationsthereof; |
|-----------------|-----------------------------------------------------------|

| (g)   | mask      works, semiconductor topologies, integrated circuit topographies and      registrations and applications for registration thereof;    and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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| (h)   | other      proprietary rights relating to any of the foregoing, whether recognized by      statutory law or common or civil law (including remedies against      infringement thereof and rights of protection of interest therein under      the Laws). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (a)   | trade      secrets, confidential information and other proprietary      know-how; |
|-----------------|-----------------------------------------------------------------------------------|

| (b)   | public      information and non-proprietaryknow-how; |
|-----------------|------------------------------------------------------|

| (c)   | information      of a scientific, technical, financial or business nature regardless of its      form; |
|-----------------|--------------------------------------------------------------------------------------------------------|

| (d)   | uniform      resource locators, domain names, telephone, telecopy, internet protocol      and email addresses, and UPC consumer packaging codes;  and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | documented      research, forecasts, studies, marketing plans, budgets, market data,      developmental, demonstration or engineering work, information that can be      used to define a design or process or procure, produce, support or operate      material and equipment, methods of production and procedures, all formulas      and designs and drawings, blueprints, patterns, plans, flow charts, parts      lists, manuals and records, specifications, and test  data; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

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| 1.2   | Certain      Rules of Interpretation |
|-----------------|--------------------------------------|

| (a)   | Consent – Whenever a      provision of this Agreement requires an approval or consent and such      approval or consent is not delivered within the applicable time limit,      then, unless otherwise specified, the Party whose consent or approval is      required shall be conclusively deemed to have withheld its approval or      consent. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Currency – Unless      otherwise specified, all references to money amounts are to lawful      currency of Canada. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------|

| (c)   | Governing Law – This      Agreement is a contract made under and shall be governed by and construed      in accordance with the laws of the Province of Ontario and the federal      laws of Canada applicable in the Province of Ontario, without regards to      its conflict of laws provisions. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Headings – Headings of      Articles and Sections are inserted for convenience of reference only and      do not affect the construction or interpretation of this      Agreement. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Including – Where the      word “including” or “includes” is used in this Agreement, it means      “including (or includes) withoutlimitation”. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | No Strict Construction –      The language used in this Agreement is the language chosen by the Parties      to express their mutual intent, and no rule of strict construction shall      be applied against any Party. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (g)   | Number and Gender –      Unless the context otherwise requires, words importing the singular      include the plural and vice versa and words importing gender include all      genders. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | Severability – If, in      any jurisdiction, any provision of this Agreement or its application to      any Party or circumstance is restricted, prohibited or unenforceable, such      provision shall, as to such jurisdiction, be ineffective only to the      extent of such restriction, prohibition or unenforceability without      invalidating the remaining provisions of this Agreement and without      affecting the validity or enforceability of such provision in any other      jurisdiction or without affecting its application to other Parties or      circumstances. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | Statutory references – A      reference to a statute includes all regulations and rules made pursuant to      such statute and, unless otherwise specified, the provisions of any      statute, regulation or rule which amends, supplements or supersedes any      such statute, regulation or rule. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j)   | Time – Time is of the      essence in the performance of the Parties’ respective      obligations. |
|-----------------|----------------------------------------------------------------------------------------------------------------|

| (k)   | Time Periods – Unless      otherwise specified, time periods within or following which any payment is      to be made or act is to be done shall be calculated by excluding the day      on which the period commences and including the day on which the period      ends and by extending the period to the next Business Day following if the      last day of the period is not a BusinessDay. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.3   | Knowledge |
|-----------------|-----------|

| Note      2: | Contains      confidential employee relatedinformation. |
|--------------|---------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| 1.4   | Entire      Agreement |
|-----------------|-----------------------|

| 1.5   | Schedules |
|-----------------|-----------|

ARTICLE 2

| 2.1   | Action      by Vendors and Purchaser |
|-----------------|--------------------------------------|

| (a)   | Purchase and Sale of Purchased      Shares – the Vendors shall sell and the Purchaser shall purchase      the Purchased Shares; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Payment of Purchase Price      – the Purchaser shall pay the Purchase Price to the Vendors as      provided in Sections 3.2, 3.4 and3.5. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Transfer and Delivery of the      Purchased Shares – the Vendors shall transfer and deliver to the      Purchaser share certificates representing the Purchased Shares duly      endorsed in blank for transfer by the holder of record and shall take such      steps as shall be necessary to cause the Corporation to enter the      Purchaser or its nominee(s) upon the books of the Corporation as the      holder of the Purchased Shares and to issue one or more share certificates      to the Purchaser or its nominee(s) representing the Purchased Shares;      and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Other Documents – the      Vendors and Purchaser shall deliver such other documents as may be      necessary to complete the transactions provided for in this      Agreement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

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| 2.2   | Place      of Closing |
|-----------------|-----------------------|

| 2.3   | Restricted      Rights |
|-----------------|------------------------|

ARTICLE 3

| 3.1   | Estimated      Base Purchase Price |
|-----------------|------------------------------------|

----

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| 3.2   | Satisfaction      of the Purchase Price |
|-----------------|-----------------------------------------|

| (a)   | At      the Closing Time, by payment to the Vendors by wire transfer of the      Estimated Base Purchase Price, less an aggregate amount representing Note 3 of the Estimated      Base Purchase Price (the “Escrow Amount”), less an      additional Note 3      (the “Additional Escrow Amount”), to be allocated between the Vendors, as      indicated in Schedule      3.2; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | At      the Closing Time, by transfer to the Escrow Agent of the Escrow Amount      which will be kept in escrow until the first anniversary of the Closing      Date unless disbursed, in whole or in part, by the Escrow Agent in      compliance with the procedure set out in the Escrow Agreement;      and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | At      the Closing Time, by transfer to the Escrow Agent of the Additional Escrow      Amount for purposes of satisfying the Net Adjustment Amount and any      balance to be subsequently released from escrow by the Escrow Agent and      paid directly by the Escrow Agent to the Vendors in accordance with      section 3.4(b) within ten (10) days after the expiry of the Review Period      (defined below); and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | On      the first anniversary of the Closing Date, the release from escrow of the      Escrow Amount by the Escrow Agent and payment directly to the Vendors in      compliance with the procedure set out in the Escrow    Agreement. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3   | Delivery      of Closing Date FinancialStatements |
|-----------------|---------------------------------------------------|

| 3.4   | Net      Working Capital and Long-Term DebtAdjustments |
|-----------------|--------------------------------------------------------|

| (a)   | Subject      to Section 3.5, the Purchase Price shallbe: |
|-----------------|----------------------------------------------------------|

| (i)   | increased      or decreased, as applicable, on a dollar for dollar basis by the amount by      which the Closing Net Working Capital is greater or lower, respectively,      than the Estimated Net Working Capital;and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

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| (ii)   | increased      or decreased, as applicable, on a dollar for dollar basis by the amount by      which the Long-Term Debt on the Closing Date Financial Statements is lower      or greater, respectively, than the Estimated Long-Term    Debt. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Any      amount payable by the Purchaser to the Vendors, or by the Vendors to the      Purchaser, pursuant to Section 3.4(a)(i) or Section      3.40, shall be netted or, if applicable, aggregated      (such net or aggregate amount, the “Net Adjustment Amount”),      and the applicable Party shall pay and satisfy the Net Adjustment Amount      within ten (10) days after the expiry of the Review Period (defined      below), and in case the Net Adjustment Amount is owed to the Purchaser,      the Escrow Agent shall proceed to payment in accordance with section      3.2(b) and 10.3(e) hereof and      the payment obligation of the Vendors under this Section 3.4(b) shall be      satisfied thereby. If the amount owed to the Purchaser exceeds the Amount      Note 3 held by the      Escrow Agent under section 3.2(c), the Vendors will      pay the excess of the Net Adjustment Amount over the Amount Note 3 paid by the      Escrow Agent within ten (10) days after the expiry of the review      period. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.5   | Objection      to Closing Date FinancialStatements |
|-----------------|----------------------------------------------------|

| (a)   | Delivery of Objection      Notice – In the event that the Purchaser objects in good faith to      any item of the Closing Date Financial Statements, the Purchaser shall so      advise the Vendors Representative by delivery to the Vendors      Representative of a written notice (the “Objection Notice”)      within 30 days after the delivery to the Purchaser of the Closing Date      Financial Statements (the “Review Period”). The      Objection Notice shall set in reasonable detail the basis for the      Purchaser’s objection as well as the amount in dispute and reasonable      details of the calculation of suchamount. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Resolution of Disputes –      The Vendors Representative and the Purchaser shall attempt to resolve all      of the items in dispute set out in any Objection Notice within      30 days of receipt of the Objection Notice by the Purchaser. Any      items in dispute not resolved within such 30 day period shall be      referred as soon as possible thereafter by either of the Vendors      Representative or the Purchaser to the Independent Auditor. The      Independent Auditor shall act as expert and not as arbitrator and shall be      required to determine the items in dispute that have been referred to it      as soon as reasonably practicable but in any event not later than      30 days after the date of referral of the dispute to it. The Vendors      Representative and the Purchaser shall provide or make available all      documents and information as are reasonably required by the Independent      Auditor to make its determination. The determination of the Independent      Auditor shall be final and binding on the Parties and the Closing Date      Financial Statements shall be (or not be) adjusted in accordance with such      determination. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

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| (c)   | Audit Expenses – The      fees and expenses of the Independent Auditor in acting in accordance with      this ARTICLE 3 shall be shared equally by the Purchaser and the Vendors,      unless the Independent Auditor determines  otherwise. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Payment in Accordance with      Determination - Within five (5) days after resolution, by agreement      of the Parties, of the dispute which was the subject of the Objection      Notice or, failing such resolution, within five (5) days after the      final determination of the Independent Auditor, the Vendors or the      Purchaser, as the case may be, shall pay to the other the amount owing as      a result of such resolution or final determination as provided in Section      3.4(b). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.6   | Appointment      of Vendors Representative |
|-----------------|--------------------------------------------|

| (a)   | Note      6 |
|-----------------|-------------|

| (b)   | Note      6 |
|-----------------|-------------|

ARTICLE 4

| 4.1   | Incorporation      and Corporate Power |
|-----------------|----------------------------------------|

| 4.2   | Registration |
|-----------------|--------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

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| 4.3   | Incorporation,      Corporate Power and Registration of the  Subsidiaries |
|-----------------|---------------------------------------------------------------------------|

| (a)   | Navtel      Sales is a corporation duly incorporated and validly existing under the      laws of Ontario and has all necessary corporate power, authority and      capacity to own its assets and to carry on its business as presently      conducted. Neither the nature of its business nor the location or      character of the assets owned or leased by Navtel Sales requires it to be      registered, licensed or otherwise qualified as an extra-provincial or      foreign corporation in any jurisdiction other than in Ontario where Navtel      Sales is duly registered, licensed or otherwise qualified for such      purpose. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Navtel      International is a corporation duly incorporated and validly existing      under the laws of Ontario and has all necessary corporate power, authority      and capacity to own its assets and to carry on its business as presently      conducted. Neither the nature of its business nor the location or      character of the assets owned or leased by Navtel International requires      it to be registered, licensed or otherwise qualified as an      extra-provincial or foreign corporation in any jurisdiction other than in      Ontario where Navtel International is duly registered, licensed or      otherwise qualified for suchpurpose. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Navtel      USA is a corporation duly incorporated and validly existing under the laws      of Delaware and has all necessary corporate power, authority and capacity      to own its assets and to carry on its business as presently conducted.      Neither the nature of its business nor the location or character of the      assets owned or leased by Navtel USA requires it to be registered,      licensed or otherwise qualified as an extra-provincial or foreign      corporation in any jurisdiction other than in Delaware where Navtel USA is      duly registered, licensed or otherwise qualified for such      purpose. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Navtel      Deutschland is a corporation duly incorporated and validly existing under      the laws of Germany and has all necessary corporate power, authority and      capacity to own its assets and to carry on its business as presently      conducted. Neither the nature of its business nor the location or      character of the assets owned or leased by Navtel Deutschland requires it      to be registered, licensed or otherwise qualified as an extra-provincial      or foreign corporation in any jurisdiction other than in Germany where      Navtel Deutschland is duly registered, licensed or otherwise qualified for      such purpose. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4   | Subsidiaries |
|-----------------|--------------|

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| 4.5   | Residence      of the Vendors |
|-----------------|-------------------------------|

| 4.6   | Status      of the Vendors and Right to Sell |
|-----------------|----------------------------------------------|

| 4.7   | Securities      Laws |
|-----------------|----------------------|

| 4.8   | Capitalization |
|-----------------|----------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

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| 4.9   | Due      Authorization |
|-----------------|------------------------|

| 4.10   | Enforceability      of Obligations |
|------------------|------------------------------------|

| 4.11   | Absence      of Conflicts |
|------------------|---------------------------|

| (a)   | Contract; |
|-----------------|-----------|

| (b)   | charter      or by-law of such entity; or |
|-----------------|-------------------------------------------|

| (c)   | Laws      or Governmental Authorizations; |
|-----------------|-------------------------------------------|

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| 4.12   | Regulatory      Approvals |
|------------------|---------------------------|

| 4.13   | Financial      Statements |
|------------------|---------------------------|

| (a)   | all      of the assets, liabilities and financial position of the Corporation and      the Subsidiaries on a consolidated basis as at Note 5, respectively;      and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | the      sales, earnings, results of operation and changes in financial position of      the Corporation and the Subsidiaries on a consolidated basis for the      12-month period ended Note  5 |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.14   | Monthly      Financial Statements |
|------------------|-----------------------------------|

| (a)   | The      monthly financial statements of the Corporation and of each of the      Subsidiaries for each month of the fiscal year ended Note 5 have been      prepared on a basis consistent with that of the preceding period and      present fairly: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | all      of the assets, liabilities and financial position of the Corporation and      the Subsidiaries on a consolidated basis as at the end of each month;      and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | the      sales, earnings, results of operation and changes in financial position of      the Corporation and the Subsidiaries on a consolidated basis for each      month; |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      monthly financial statements for the months of Note  5 |
|-----------------|-----------------------------------------------------------------|

| 4.15   | Absence      of Undisclosed Liabilities |
|------------------|-----------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| 4.16   | Absence      of Changes and Unusual Transactions |
|------------------|--------------------------------------------------|

| (a)   | there      has not been any change in the financial condition, operations or      prospects of the Corporation or any of the Subsidiaries other than changes      in the ordinary course of business, which when taken as a whole has a      Material Adverse Effect; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | there      has not been any damage, destruction, loss, virus or denial of service      attack, Information Technology failure, labour dispute, organizing drive,      application for certification or other event, development or condition of      any character (whether or not covered by insurance) which when taken as a      whole has a Material AdverseEffect; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | there      has not been any material change in the level or value of      Inventories; |
|-----------------|----------------------------------------------------------------------------------------|

| (d)   | neither      the Corporation nor any of the Subsidiaries has transferred, assigned,      sold or otherwise disposed of any of the material assets shown or      reflected in the Balance Sheet or cancelled any debts or entitlements      except, in each case, in the ordinary course of  business; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | neither      the Corporation nor any of the Subsidiaries has discharged or satisfied      any Encumbrance, or paid any obligation or liability (fixed or contingent)      other than liabilities included in the Balance Sheet and liabilities      incurred since the date of the Balance Sheet in the ordinary course of      business; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | neither      the Corporation nor any of the Subsidiaries has suffered any unusual or      extraordinary loss, waived or omitted to take any action in respect of any      rights, or entered into any commitment or transaction not in the ordinary      course of business where such loss, rights, commitment or transaction is      or would have a Material Adverse Effect in relation to the Corporation or      the Subsidiaries when taken as awhole; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | neither      the Corporation nor any of the Subsidiaries has granted any bonuses,      whether monetary or otherwise, or made any general wage or salary      increases in respect of the Employees, changed the terms of employment for      any Employee or entered into a written contract with any Employee or      amended or promised to amend any Benefit Plan or Employment      Contract; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | neither      the Corporation nor any of the Subsidiaries has hired or dismissed any      senior employees or hired or dismissed more than Note 1, such employees      being identified in Note      1, together with the reasons for dismissal in such      cases; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| (i)   | neither      the Corporation nor any of the Subsidiaries has, directly or indirectly,      engaged in any transaction, made any loan or entered into any arrangement      with any officer, director, partner, shareholder, employee (whether      current or former or retired), consultant, independent contractor or agent      of the Corporation or any of theSubsidiaries; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j)   | neither      the Corporation nor any of the Subsidiaries, except for Permitted      Encumbrances, has created or permitted to exist any Encumbrance affecting      any of its assets or property; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | neither      the Corporation nor any of the Subsidiaries has changed the manner of      billing of, or the credit lines made available to any of its      customers; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | neither      the Corporation nor any of the Subsidiaries, directly or indirectly, has      declared or paid any dividends or declared or made any other payments or      distributions on or in respect of any of its shares and has not, directly      or indirectly, purchased or otherwise acquired any of its shares;      and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m)   | neither      the Corporation nor any of the Subsidiaries has authorized, agreed or      otherwise become committed to do any of the  foregoing. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.17   | Non-Arm’s      Length Transactions |
|------------------|------------------------------------------|

| 4.18   | No      Joint Venture Interests or StrategicAlliances |
|------------------|-------------------------------------------------------|

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| 4.19   | Product      Warranties |
|------------------|-------------------------|

| 4.20   | Absence      of Guarantees |
|------------------|----------------------------|

| 4.21   | Major      Suppliers and Customers |
|------------------|------------------------------------|

| 4.22   | Sufficiency      of Assets |
|------------------|----------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| 4.23   | Title      to Certain Assets |
|------------------|------------------------------|

| 4.24   | Condition      of Certain Assets |
|------------------|----------------------------------|

| 4.25   | Location      of the Assets |
|------------------|-----------------------------|

| 4.26   | Inventories |
|------------------|-------------|

| 4.27   | Collectibility      of Accounts Receivable |
|------------------|--------------------------------------------|

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| 4.28   | Government      Grants |
|------------------|------------------------|

| 4.29   | Business      in Compliance with Law |
|------------------|--------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| 4.30   | Governmental      Authorizations |
|------------------|----------------------------------|

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| 4.31   | Restrictive      Covenants |
|------------------|----------------------------|

| (a)   | limiting      the freedom of the Corporation or the Subsidiaries to carry on business as      currently conducted or compete in any line of business or any geographic      area, acquire goods or services from any supplier, establish the prices at      which it may sell any goods or services, sell goods or services to any      customer or potential customer, or transfer or move any of its assets or      operations; or |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | which      has a Material Adverse Effect. |
|-----------------|-------------------------------------------|

| 4.32   | Intellectual      Property |
|------------------|----------------------------|

| (a)   | Schedule 4.32 sets      forth a complete list and a brief description of all Intellectual Property      Registrations, or for which applications for registration have been filed,      by or on behalf of the Corporation or any of the Subsidiaries, alone or      jointly with others (collectively the “Vendors IP      Registrations”) in each case, enumerating specifically the      applicable filing or registration number, title, jurisdiction in which      filing was made or from which registration issued, date of filing or      issuance, and names all listed inventor(s) or author(s) and current      applicant(s) and registered owners(s), as  applicable. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Schedule 4.32 sets      forth a complete list and a brief description of all Owned Intellectual      Property which has not been registered, or for which is non-registrable,      non-patentable or non-copyrightable. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Schedule 4.32 sets      forth a complete list and brief description of all Contracts and      Encumbrances relating to any of the Owned Intellectual Property and all      Contracts relating to the Licensed Intellectual Property, identifying      exclusive and non-exclusive Licensed Intellectual Property and the term.      Such Contracts are in full force and effect and no default exists on the      part of the Corporation or any of the Subsidiaries in any material respect      or, to the knowledge of the Corporation, on the part of the other parties      thereto. Furthermore, Schedule 4.32 sets      forth a complete list of i) all the Corporation’s and Subsidiaries’      distributors, joint ventures, partners, sales agents, representatives or      any other persons, including VARs, OEMs or resellers, who have rights to      market, distribute or license the Customer Offerings, including the      Software, in any geographic, product or customer market; ii) all the      license, maintenance or support agreements, development contracts and all      agreements, whether written or oral between the Company and customers in      respect of the Software (collectively, the “Software Contracts”).      Except as disclosed in Schedule      4.32, all customers under the Software Contracts have been      granted non-transferable, non-exclusive, single-site licenses to use only      object code versions of theSoftware. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (d)   | Schedule 4.32 sets      forth a complete list and brief description of the Unlicensed Intellectual      Property. Each of the Corporation and the Subsidiaries is using or holding      the Unlicensed Intellectual Property with the consent of the owner of such      Unlicensed Intellectual Property, all of which such consents are in full      force and effect and no default exists in any material respect on the part      of the Corporation or of the Subsidiaries or, to the knowledge of the      Corporation, on the part of any of the other parties thereto. Furthermore,      Schedule 4.32      identifies each material written license, covenant or other agreement      (other than confidentiality agreements and materials transfer agreements      entered into in the ordinary course of business) pursuant to which the      Corporation or the Subsidiaries has assigned, transferred, licensed,      distributed or otherwise granted any right or access to any Person, or      covenanted not to assert any right, with respect to any past, existing or      future Owned Intellectual Property for the past three (3) years. Except as      described in Schedule      4.32, neither the Corporation nor the Subsidiaries has      agreed to indemnify any Person against any infringement, violation or      misappropriation of any Intellectual Property rights with respect to any      Customer Offerings or any third party Intellectual Property rights. Except      as set forth in Schedule 4.32,      neither the Corporation nor the Subsidiaries is a member of or party to      any patent pool, industry standards body, trade association or other      organization pursuant to the rules of which it is obligated to license any      existing or future Owned Intellectual Property to any    Person. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Except      as disclosed in Schedule      4.32: |
|-----------------|-------------------------------------------------|

| (i)   | all      assignments of Vendors IP Registrations to the Corporation or the      Subsidiaries have been properly executed and recorded, all issued patents      in the Patent Rights and Trademarks are in good standing, there are no      material defects of form in the preparation of the applications or the      filings of the Patent Rights and the Trademarks, the pending applications      for the registrations of the Patent Rights and Trademarks are being      diligently prosecuted, all issuance, renewal, maintenance and other      payments that are or have become due with respect to the Vendors IP      Registrations have been timely paid by or on behalf of the Corporation or      the Subsidiaries, and there are no Security Interests or restrictions on      the Vendors IP Registrations; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | all      of the Vendors IP Registrations are in full force and effect and has not      been used or enforced or failed to be used or enforced by the Corporation      in a manner that would result in its abandonment, cancellation or      unenforceability; and |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | all      the Vendors IP Registrations are valid and  enforceable. |
|-------------------|-------------------------------------------------------------------|

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| (f)   | Except      as disclosed in Schedule      4.32: |
|-----------------|-------------------------------------------------|

| (i)   | there      are no Claims by the Corporation or any of the Subsidiaries relating to      breaches, violations, infringements or interferences with any of the Owned      Intellectual Property or Licensed Intellectual Property or to its      applications or registrations by any other Person and the Corporation does      not have any knowledge of any facts upon which such a Claim could be      based. Furthermore, to the knowledge of the Corporation, none of the      Customer Offerings, or any activity of the Corporation or the      Subsidiaries, infringes or violates, or constitutes a misappropriation of,      any Intellectual Property rights of any third party. No written complaint,      claim, allegation, notice, or threat of any of the foregoing was      received by the Corporation or the Subsidiaries in the past three (3)      years ; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | to      the knowledge of the Corporation, no other Person (including, without      limitation, any current or former employee or consultant of Corporation or      the Subsidiaries) is using any of the Owned Intellectual Property or      Licensed Intellectual Property so as to breach, violate, infringe,      misappropriate or interfere with the rights of the Corporation or any of      the Subsidiaries. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | Except      as disclosed in Schedule      4.32: |
|-----------------|-------------------------------------------------|

| (i)   | there      are no Claims in progress or pending or to the knowledge of the      Corporation threatened against the Corporation or any of the Subsidiaries      relating to the Owned Intellectual Property, Licensed Intellectual      Property or Unlicensed Intellectual Property and neither the Corporation      nor the Subsidiaries has received written notice of any pending or      threatened inventorship challenges, ownership challenges, invalidity,      opposition or nullity proceedings or interferences with respect to any      applications or registrations of the Vendors IP Registrations. The      Corporation has no knowledge of any information that would preclude it      from having clear title to the Vendors IP Registrations. The      Corporation has no knowledge of any information that would affect the      validity or enforceability of any issued Patent Rights or Trademarks      included in the Vendors IPRegistrations; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | to      the knowledge of the Corporation, the carrying on of the Corporation’s and      of the Subsidiaries’ business and the use, possession, reproduction,      distribution, sale, licensing, sublicensing or other dealings involving      any of the Customer Offerings, does not breach, violate, infringe or      interfere with any rights of any otherPerson; |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (iii)   | either      the Corporation or the Subsidiaries, as the case may be, is the sole and      exclusive owner of all Owned Intellectual Property, free and clear of any      Encumbrances and all joint owners and encumbrances of the Corporation’s      Owned Intellectual Property are listed in Schedule 4.32. To      the knowledge of the Corporation, the Corporation’s Owned Intellectual      Property and Licensed Intellectual Property constitutes all Intellectual      Property necessary (i) to exploit the Customer Offerings in the manner so      done currently and presently proposed to be done by the Corporation and      the Subsidiaries, (ii) to use the Internal Systems as they are currently      used and presently proposed to be used by the Corporation and the      Subsidiaries, and (iii) otherwise to conduct the Corporation's business in      all material respects in the manner currently conducted and presently      proposed to be conducted by the Corporation and the Subsidiaries. All      Internal Systems that are material to the business of the Corporation or      the Subsidiaries are listed and described in Schedule      4.32. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | The      Corporation and the Subsidiaries have taken reasonable measures in      accordance with industry practice to protect the proprietary nature of      each item of the Owned Intellectual Property and Licensed Intellectual      Property, and to maintain in confidence all trade secrets and      confidential information comprising a part thereof. The Corporation and      the Subsidiaries has complied in all material respects with all applicable      contractual and legal requirements pertaining to information privacy and      security. No complaint, within the past three (3) years, relating to an      improper use or disclosure of, or a breach in the security of, any      confidential information has been made in writing or, to the knowledge of      the Corporation, threatened against the Corporation or the Subsidiaries.      To the knowledge of the Corporation, there has been no: (i) unauthorized      disclosure of any material third party proprietary or confidential      information in the possession, custody or control of the Corporation or      the Subsidiaries and no collection, use or disclosure of any such      information in breach of any privacy laws; or (ii) material breach of the      security procedures of the Corporation and the Subsidiaries wherein      confidential information has been disclosed to a third person. Schedule 4.32      identifies (i) each item of the Licensed Intellectual Property and      the license or agreement pursuant to which the Corporation or the      Subsidiaries exploits such Licensed Intellectual Property, other than      information and materials obtained under confidentiality agreements, and      (ii) each agreement, contract, assignment or other instrument pursuant to      which the Corporation or the Subsidiaries has obtained any joint or sole      ownership interest in or to each item of Owned Intellectual Property. No      third party intellectual property including inventions, methods, services,      materials, processes or software are included in or required to exploit      the Customer Offerings, except as specifically set forth in Schedule      4.32. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (i)   | Schedule 4.32      contains a true and complete list of the Corporation and the Subsidiaries’      Software programs, products and services. The Software and programs,      products and services of the Corporation and the Subsidiaries, including      the Documentation, were written or developed only by the individuals (the      “Developers”)      listed in Schedule      4.32 other than minor components of the Software which, in the      aggregate, do not comprise more than five percent (5%) of the Corporation      and the Subsidiaries Source Code of the current version of any individual      Software included in the Customer Offerings or other confidential      information constituting, embodied in or pertaining to such Software      (“Corporation Source      Code”). |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j)   | Neither      the Corporation or the Subsidiaries has licensed, distributed or      disclosed, and to the knowledge of the Corporation or the Subsidiaries, is      not aware of any distribution or disclosure by others (including its      employees and contractors) of, the Corporation Source Code for any      Software included in the Customer Offerings to any Person, except pursuant      to the agreements listed in Schedule 4.32, and      the Corporation and the Subsidiaries have taken reasonable physical and      electronic security measures in accordance with industry practice to      prevent disclosure of such Corporation Source Code. Schedule 4.32      identifies (i) a true and complete list of agreements pursuant to      which the Corporation Source Code to the Software has been: (i) escrowed      with any third party, and, (ii) delivered to a third party for any      purposes whatsoever, including testing. No event has occurred, and no      circumstance or condition exists, that will, or would reasonably be      expected to, nor will the consummation of the transaction contemplated      hereby, result in the disclosure or release of such Corporation Source      Code by the Corporation, the Subsidiaries or escrow agent(s) or any other      person to any third party. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | Except      as set forth in Schedule      4.32, all of the Software and Documentation comprising,      incorporated in or bundled with the Customer Offerings have been designed,      authored, tested and debugged by regular Employees within the scope of      their employment or by independent contractors of the Corporation or the      Subsidiaries who, in each case, have executed valid and binding written      agreements expressly assigning to the Corporation all right, title and      interest in the Intellectual Property arising or related to their      contribution or participation in the conception or development of the      Software and Documentation and have waived, in writing, their      non-assignable rights (including moral rights) in favor of the Corporation      or the Subsidiaries and its permitted assigns and licensees, and have no      residual claim to such materials. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (l)   | Schedule 4.32 lists      all Open Source Materials that the Corporation or the Subsidiaries have      used in any way in the exploitation of Customer Offerings and describes      the manner in which such Open Source Materials have been used, including,      without limitation, whether and how the Open Source Materials have been      modified and/or distributed by the Corporation or the Subsidiaries. Except      as specifically disclosed in Schedule 4.32, the      Corporation and the Subsidiaries have not (i) incorporated Open Source      Materials into, or combined Open Source Materials with, the Customer      Offerings; (ii) distributed Open Source Materials in conjunction with      any other Software developed or distributed by the Corporation; or (iii)      used Open Source Materials that create, or purport to create, obligations      for the Corporation or the Subsidiaries with respect to the Customer      Offerings or grant, or purport to grant, to any third party, any rights or      immunities under Intellectual Property rights (including, but not limited      to, using any Open Source Materials that require, as a condition of      exploitation of such Open Source Materials, that other Software      incorporated into, derived from or distributed with such Open Source      Materials be (a) disclosed or distributed in source code form, (b)      licensed for the purpose of making derivative works, or (c)      redistributable at no charge or minimalcharge. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m)   | Each      Employee and each independent contractor of the Corporation or the      Subsidiaries has executed a written agreement expressly assigning to      the Corporation or the Subsidiaries all right, title and interest in      any Intellectual Property related to the Customer Offerings, inventions,      whether or not patentable, and works of authorship, invented, created,      developed, conceived and/or reduced to practice during the term of such      Employee's employment or such independent contractor's work for the      Corporation or the Subsidiaries, and has waived all moral rights in      respect of Copyrights to the extent legally permissible, except as set      forth in Schedule      4.32. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n)   | The      Customer Offerings are free from significant defects in design,      workmanship and materials and conform in all material respects to the      written Documentation and specifications therein. The Corporation and the      Subsidiaries have not received any warranty claims during the past      twelve months which do not form part of the warranty reserve reflected on      the relevant Financial Statements for the applicable period, contractual      terminations or requests for settlement or refund due to the failure of      the Customer Offerings to meet their specifications or otherwise to      satisfy end user needs or for harm or damage to any third party except as      set forth in Schedule      4.32. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o)   | The      Corporation and the Subsidiaries have neither sought, applied for nor      received any support, funding, resources or assistance from any federal,      state, provincial, local or foreign government or Governmental Authorities      or quasi-governmental agency or funding source in connection with the      exploitation of the Customer Offerings, the Internal Systems or any      facilities or equipment used in connection therewith. To the knowledge of      the Corporation, no third party, including any academic or governmental      organization, possesses rights to the Owned Intellectual      Property. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (p)   | All      royalties or other payments set forth in Schedule 4.32 that      have accrued prior to the Closing Date with respect to any period prior to      the Closing Date, have been disclosed in the Closing Date Financial      Statement or paid. The Corporation and the Subsidiaries will not owe any      such royalties or any additional payments as a result of the execution of      this Agreement. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.33   | Owned      Real Property |
|------------------|--------------------------|

| 4.34   | Leased      Real Property |
|------------------|---------------------------|

| (a)   | Schedule 4.34 sets      forth a complete list of the Leased Real Property and details for each      Leased Real Property including: (i) municipal address, (ii) legal      description, (iii) area of premises, (iv) a description of all relevant      documents (including amendments, extension notices, registered notices,      non-disturbance agreements) including details of parties thereto and dates      of documents in the possession or control of the Corporation, and      (v) details of annual rent payable, applicable discounts or premiums      associated therewith, current terms, renewal rights and security deposits      or prepaid rent. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Except      as disclosed in Schedule 4.34, the      Real Property Leases have not been altered or amended and are in full      force and effect. There are no Contracts between the landlord and tenant,      or sub-landlord and subtenant, or other relevant parties relating to the      use and occupation of the Leased Real Property, other than as contained in      the Real Property Leases. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | The      Corporation or the applicable Subsidiary which is a tenant under the      relevant Real Property Lease has not received notice of any, or has any      knowledge of outstanding defaults under the Real Property Leases on the      part of the Corporation or of the Subsidiaries or, to the knowledge of the      Corporation, on the part of any other party to such Real Property      Leases. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | All      interest held by the Corporation or any of the Subsidiaries as lessee or      occupant under the Real Property Leases are free and clear of all      Encumbrances. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Neither      the Corporation nor any of the Subsidiaries has an option, right of first      refusal or other right relating to the Leased Real Property, other than as      set out in the Real PropertyLeases. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | Neither      the Corporation nor any of the Subsidiaries has in the past three (3)      years waived, or omitted to take any action in respect of any material      rights under any of the Real PropertyLeases. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (g)   | The      Corporation or the applicable Subsidiary, has a good and valid leasehold      interest in and to the Leased Real Property of which it is a tenant, free      and clear of all Encumbrances other than Permitted      Encumbrances. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.35   | Environmental      Matters |
|------------------|----------------------------|

| (a)   | All      Environmental Approvals required by the Corporation or the Subsidiaries      under Environmental Laws have been obtained, are valid and in full force      and effect, have been and are being complied with, and there have been and      are no applications made or proceedings commenced or threatened to revoke,      suspend, amend or alter any Environmental Approval. Schedule 4.35 sets      forth a complete list of such Environmental Approvals and true and      complete copies of all such approvals have been delivered or made      available to the Purchaser. Neither the Corporation nor any of the      Subsidiaries has received any notice of any intention to revoke, suspend,      amend or alter any Environmental Approval and there are no circumstances      which exist which could result in the revocation, suspension, amendment or      alteration of any EnvironmentalApproval. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      Corporation and the Subsidiaries and all their operations have been and      are now, in compliance with all Environmental Laws, including operations      conducted in or on the Real Property by the Corporation or the      Subsidiaries. Neither the Corporation nor any of the Subsidiaries has      received any notice of any alleged violation of such Laws. Any Release by      the Corporation or any of the Subsidiaries of any Materials of      Environmental Concern into the Environment complied and complies with all      applicable Environmental Laws. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | None      of the Corporation, the Subsidiaries or any of their respective operations      or any Real Property has been or is now the subject of any Environmental      Order, nor does the Corporation have any knowledge of any inspection,      assessment, investigation or evaluation commenced or threatened as to      whether any such Environmental Order is necessary nor has any threat of      any such Environmental Order been made. Neither the Corporation nor any of      the Subsidiaries has received any notice of any Environmental Order or any      notice of intention to issue an Environmental Order nor are there any      circumstances which could reasonably be expected to result in the issuance      of any such Environmental Order. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (d)   | Neither      the Corporation nor any of the Subsidiaries is currently being prosecuted      for or has been prosecuted for or convicted of any offence under any      Environmental Law, nor has the Corporation or any of the Subsidiaries been      found liable in any proceeding or been required by any Environmental Order      to pay any fine, penalty, damages, costs, expenses, amount or judgment to      any Person as a result of any Release or threatened Release or as a result      of the breach or contravention of any Environmental Law, and to the      knowledge of the Corporation there is no basis for any such proceeding or      action. Neither the Corporation nor any of the Subsidiaries has received      any Claim, summons or charge or any notice of any violation or Claim under      or alleging any contravention of any Environmental Law or any notice of      any intention to issue any Claim, summons, charge or notice of violation      or contravention of any EnvironmentalLaw. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | No      part of the Real Property used or occupied by or under the charge,      management or control of the Corporation or of any of the Subsidiaries has      ever been used by the Corporation or the Subsidiaries as a landfill or for      the disposal or deposit of waste. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | True      and complete copies of all material environmental data and studies      (including the results of any environmental audit assessment or      environmental management system) relating to the Corporation and the      Subsidiaries which are in their possession have been delivered or made      available to the Purchaser. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | To      the knowledge of the Corporation, there are no Materials of Environmental      Concern present in, on, at or under any of the Real Property currently or      previously used or occupied by or under the charge, management or control      of the Corporation or of any of the Subsidiaries (including underlying      soils and substrata, vegetation, surface water and groundwater) at      concentrations or in amounts which could reasonably be expected to result      in or form the basis for the issuance of an Environmental Order or which      exceed decommissioning or remediation standards under any applicable      Environmental Laws or standards published or administered by Governmental      Authorities. To the knowledge of the Corporation, no asbestos or asbestos      containing materials or polychlorinated biphenyls (PCBs) or equipment,      waste or other materials containing polychlorinated biphenyls (PCBs) are      used, stored or otherwise present in, on or at any of the assets of the      Corporation or of any of theSubsidiaries. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | The      Corporation has not received notice of any restriction on the use of any      Real Property or any part of the Real Property or on the operation or      scope of the operations of the Corporation or of any of the Subsidiaries      (except as may be apparent in any Environmental Approval) imposed pursuant      to any Environmental Law, including any Environmental    Order. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | To      the knowledge of the Corporation, there are no aboveground or underground      storage tanks on the Real Property. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------|

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| (j)   | The      Corporation has no knowledge of any Materials of Environmental Concern      originating from any neighbouring or adjoining properties which has      migrated onto, into, through or under or is migrating towards any of the      Real Property used or occupied by the Corporation or of any of the      Subsidiaries. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | The      Corporation has no knowledge of any Materials of Environmental Concern      originating from any of the Real Property or any other assets of the      Corporation or of any of the Subsidiaries which has migrated onto, into,      through or under or is migrating towards any other    property. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | Neither      the Corporation nor any of the Subsidiaries has assumed, or otherwise      acquired, the liability of any Person for matters pertaining to the      Environment. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.36   | Employment      Matters |
|------------------|-------------------------|

| (a)   | Schedule 4.36 sets      forth a complete and accurate list of the Employees, by employee number,      together with their compensation, title, length of service, benefits and      entitlements and other terms of employment. Schedule 4.36 also      lists, by employee number, Employees on inactive status, including      lay-off, short-term disability leave, long-term disability leave,      pregnancy and parental leave or other extended absences, or receiving      benefits pursuant to workers’ compensation legislation, and specifies the      last date of active employment, the reason for the absence and the      expected date of return of each suchEmployee. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Current      and complete copies of all Employment Contracts or, where oral, written      summaries of the terms thereof, have been delivered or made available to      the Purchaser. Except for those Employment Contracts listed in Schedule 4.36,there are no Employment Contracts which are not terminable on the      giving of reasonable notice in accordance with applicable Law, nor are      there any Employment Contracts providing for cash, other compensation,      benefits, acceleration of rights or contingent rights on Closing. Except      as set forth in Schedule 4.36, each current or past Employee has entered      into a confidentiality and assignment of inventions agreement with the      Corporation or the Subsidiaries, a copy or form of which has previously      been delivered to Purchaser. Schedule 4.36 contains a list of all current      and former Employees who are a party to a non-competition or      non-solicitation agreement (that is by such agreement’s terms is still in      effect) with the Corporation or the Subsidiaries; copies of such      agreements have previously been delivered to the Purchaser. All of the      agreements referenced in the two preceding sentences will continue to be      legal, valid, binding and enforceable and in full force and effect      immediately following the Closing in accordance with the terms thereof as      in effect immediately prior to the Closing. Schedule 4.36contains a list of all Employees who work at a facility located in      Canada or the United States and who are not respectively citizens of      Canada or the United States as the case may be. To the knowledge of the      Corporation, no key Employee or group of Employees has any current plans      to terminate employment with the Corporation or the Subsidiaries. Except      as set forth in Schedule 4.36 or as required under applicable law, no      Employee has any agreement as to length of notice, severance or      termination payment required to terminate his  employment. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (c)   | There      are no Claims, pending Claims nor, to the knowledge of the Corporation,      threatened Claims pursuant to any Laws relating to the Employees or former      employees, including employment standards, human rights, labour relations,      occupational health and safety, workplace safety and insurance or pay      equity. Except as set out on Schedule 4.36, there are no outstanding      decisions, Orders or settlements or pending settlements which place any      obligation upon the Corporation or any of the Subsidiaries to do or      refrain from doing any act. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | All      current assessments under workplace safety and insurance legislation in      relation to the Corporation or each of the Subsidiaries and all of their      respective contractors and subcontractors have been paid or accrued.      Neither the Corporation nor any of the Subsidiaries has been or is subject      to any additional or penalty assessment under such legislation which has      not been paid or has been given notice of any audit. Moreover, the      accident cost experience of each of the Corporation and the Subsidiaries      is such that there are no pending nor, to the knowledge of the      Corporation, threatened assessments, experience rating charges or Claims      which could adversely affect the premium payments of each of the      Corporation and the Subsidiaries or their accident cost experience or      result in any additional payments in connection with the Corporation or      any of the Subsidiaries. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | The      Vendors have made available to the Purchaser for review all inspection      reports, workplace audits or written equivalent, made under any      Occupational Health and Safety Law which relate to the Corporation or the      Subsidiaries. There are no outstanding inspection Orders or written      equivalent made under any Occupational Health and Safety Law which relate      to the Corporation or the Subsidiaries. There have been no fatal or      critical accidents in the last three years. The Company      and the Subsidiaries have complied in all respects with any Orders issued      under any Occupational Health and Safety Law. There are no appeals of any      Orders under any Occupational Health and Safety Law against the      Corporation or any of the Subsidiaries which are currently      outstanding. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (f)   | Each      of the Corporation and the Subsidiaries: (i) is in compliance in all      material respects with all applicable Laws, rules and regulations in the      Territories where the Corporation or Subsidiaries has Employees situate      therein respecting employment, employment practices, immigration, terms      and conditions of employment, wages and hours, and worker classification      (including the proper classification of Employees as exempt employees      and non-exempt employees under the applicable Laws) in each case,      with respect to Employees; (ii) has withheld and reported all amounts      required by Law in the Territories where the Corporation or      Subsidiaries has Employees situate therein or by agreement to be withheld      and reported with respect to the wages, salaries and other payments to      Employees, (iii) has made all applicable contributions and paid other      levies due in respect of the Employees in respect of their employment      required under applicable Law in the Territories where the      Corporation or Subsidiaries has Employees situate therein; (iv) is not      liable for any arrears of wages or any taxes or any penalty for failure to      comply with any of the foregoing; and (v) is not liable for any      payment to any trust or other fund or to any Governmental Authorities or      administrative authority, with respect to unemployment compensation      benefits, social security or other benefits or obligations for Employees      (other than routine payments to be made in the normal course of business      and consistent with past practice). All independent contractors providing      services to the Corporation or the Subsidiaries have been properly      classified as independent contractors for purposes of applicable Law.      There are no pending or, to the knowledge of the Corporation,      any threatened claims or actions against the Corporation or the      Subsidiaries under any worker's compensation policy or long-term      disability policy with respect to anyemployees. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | There      are no outstanding assessments, penalties, fines, liens, charges,      surcharges or other amounts due or owing pursuant to any workplace safety      and insurance legislation and the Corporation and each of the Subsidiaries      have not been reassessed in any material respect under such legislation      during the past three (3) years and, to the knowledge of the Corporation,      no audit of the Corporation or the Subsidiaries is currently being      performed pursuant to applicable workplace safety and insurance      legislation. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.37   | Collective      Agreements |
|------------------|----------------------------|

| (a)   | There      are no unions or employee associations, whether certified or voluntarily      recognized, that represent the Employees. The Corporation and the      Subsidiaries have not made any Collective Agreement with any labour union      or employee association nor made commitments to or conducted negotiations      with any labour union or employee association with respect to any future      Collective Agreements. The Vendors are not aware of any current attempts      or any attempts in the last three (3) years, to organize or establish any      labour union or employee association with respect to any Employees. To the      knowledge of the Corporation, there are no pending unfair labour practice      complaints involving any Employee, nor any related or successor employer’s      applications or proceedings involving the Corporation or the Subsidiaries,      nor have there been for the past three (3)  years. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (b)   | There      are no outstanding or, to the knowledge of the Corporation, threatened      unfair labour practices, complaints or applications relating to any Union,      including any proceedings which could result in certification of a Union      as bargaining agent for any Employees or any Persons providing on site      services in respect of the Corporation or of any of the Subsidiaries and      there have not been any such proceedings within the last five      years. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | There      is no strike, work stoppage, slow-down, lock out or other labour dispute      occurring or, to the knowledge of the Corporation, threatened affecting      the Corporation or any of the Subsidiaries. To the knowledge of the      Corporation, there are no events or circumstances that could reasonably be      expected to result in a strike, work stoppage, slow-down, lock out or      other labour dispute affecting the Corporation or any of the      Subsidiaries. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Except      as disclosed in Schedule 4.37,      neither the Corporation nor any of the Subsidiaries has any grievances or      pending arbitration cases outstanding nor, to the knowledge of the      Corporation, are there any threatened grievances or arbitration cases      relating to the Corporation or any of the Subsidiaries. To the knowledge      of the Corporation, neither the Corporation nor any of the Subsidiaries      has any labour relations problems that could reasonably be expected to      adversely affect the value of the Corporation or of any of the      Subsidiaries or lead to an interruption of their respective      operations. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Neither      the Corporation nor any of the Subsidiaries has engaged in any unfair      labour practices and, during the past five years, there has not been any      strike, lock-out, work stoppage, or other material labour dispute      involving the Corporation or any of the Subsidiaries. Neither the      Corporation nor any of the Subsidiaries has engaged in any plant closing      or employee lay-off activities within the past five years that would      violate or in any way subject the Corporation or any of the Subsidiaries      to the group termination or lay-off requirements of any applicable      employment standards legislation. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.38   | Pension      and Other Benefit Plans |
|------------------|--------------------------------------|

| (a)   | Schedule 4.38 sets      forth a complete list of the BenefitPlans. |
|-----------------|--------------------------------------------------------------------|

| (b)   | No      Pension Plan has been put in place, is maintained or is administered by      the Corporation or any of theSubsidiaries. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Current      and complete copies of all written Benefit Plans as amended to date or,      where oral, written summaries of the terms thereof, and all booklets and      communications concerning the Benefit Plans which have been provided to      persons entitled to benefits under the Benefit Plans have been delivered      or made available to the Purchaser together with copies of all material      documents relating to the Benefit Plans, including, as applicable, all      insurance contracts and policies, investment management agreements,      benefit administration contracts, and any financial administration      contracts. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (d)   | Each      Benefit Plan is, and has been, established, amended and administered in      compliance with the terms of such Benefit Plan (including the terms of any      documents in respect of such Benefit Plan), and all applicable Laws      required in the Territories. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Except      as disclosed, the Corporation and the Subsidiaries have no formal plan and      have made no promise or commitment, whether legally binding or not, to      create any additional Benefit Plan or to improve or change the benefits      provided under any Benefit Plan. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | All      premiums required to be remitted, paid to or in respect of each Benefit      Plan have been paid or remitted in a timely fashion in accordance with its      terms and all Laws. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | All      Employee data necessary to administer each Benefit Plan is in the      possession of the Corporation or the Subsidiaries or their agents and is      in a form which is sufficient for the proper administration of the Benefit      Plan in accordance with its terms and to the knowledge of the Corporation      such data is complete and correct. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | Except      as disclosed in Schedule 4.38,none of the Benefit Plans provide benefits beyond retirement or      other termination of service to Employees or former employees or to the      beneficiaries or dependants of such employees and where there are such      Benefit Plans disclosed in Schedule 4.38, each      such Benefit Plan may be amended or terminated at any time without      incurring any liability thereunder other than in respect of Claims      incurred prior to such amendment ortermination. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | None      of the Benefit Plans, or any insurance contract relating thereto, require      or permit a retroactive increase in premiums or payments, or require      additional premiums or payments on termination of the Benefit Plan or any      insurance contract relatingthereto. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.39   | Personal      Information |
|------------------|---------------------------|

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| 4.40   | Insurance |
|------------------|-----------|

| 4.41   | Contracts |
|------------------|-----------|

| 4.42   | Litigation |
|------------------|------------|

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| 4.43   | Tax      Matters |
|------------------|------------------|

| (a)   | Each      of the Corporation and the Subsidiaries has duly and timely made or      prepared all Tax Returns required to be made or prepared by it, has duly      and timely filed all Tax Returns required to be filed by it with the      appropriate Governmental Authority in the Territories and has duly,      completely and correctly reported all income and all other amounts and      information required to be reported thereon, Notes 3 and      5 |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Each      of the Corporation and the Subsidiaries has duly and timely paid all      Taxes, including all instalments on account of Taxes for the current year,      that are due and payable under applicable Law in the Territories.      Provision has been made on the Balance Sheet for amounts at least equal to      the amount of all Taxes owing by any one of them that were not yet due and      payable by the date of the Balance Sheet and that relate to periods ending      on or prior to the date of the BalanceSheet. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Neither      the Corporation nor any of the Subsidiaries has requested, offered to      enter into or entered into any agreement or other arrangement, or executed      any waiver, providing for any extension of time within which (i) to file      any Tax Return covering any Taxes for which the Corporation or any of the      Subsidiaries is or may be liable; (ii) to file any elections, designations      or similar filings relating to Taxes for which the Corporation or the      Subsidiaries is liable; or (iii) the Corporation or any of the      Subsidiaries is required to pay or remit any Taxes or amounts on account      of Taxes; or (iv) any Governmental Authority may assess or collect Taxes      for which the Corporation or any of the Subsidiaries is or may be      liable. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Other      than those agreements and arrangements described in Section 4.43(c),      neither the Corporation nor any of the Subsidiaries has made, prepared      and/or filed any elections, designations or similar filings relating to      Taxes or entered into any agreement or other arrangement in respect of      Taxes or Tax Returns that has effect for any period ending after the      Closing Date. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | All      income, sales (including goods and services, harmonized sales and      provincial or territorial sales, US sales and use tax, value added tax and      any similar taxes in any territory where the Corporation and/or any      Subsidiary operates) and capital tax liabilities of each of the      Corporation and the Subsidiaries have been assessed by the relevant      Governmental Authorities and notices of assessment have been issued to      each such entity by the relevant Governmental Authorities for all taxation      years Notes 3 and      5 |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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| (f)   | To      the knowledge of the Corporation, there are no proceedings,      investigations, audits or Claims now pending or threatened against the      Corporation or the Subsidiaries in respect of any Taxes and there are no      matters under discussion, audit or appeal with any Governmental Authority      relating to Taxes. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | Each      of the Corporation and the Subsidiaries has duly and timely withheld all      Taxes and other amounts required by Law in the Territories to be withheld      by it (including Taxes and other amounts required to be withheld by it in      respect of any amount paid or credited or deemed to be paid or credited by      it to or for the account or benefit of any Person, including any Employee,      officer or director and any non-resident Person), and has duly and timely      remitted to the appropriate Governmental Authority such Taxes and other      amounts required by Law in the Territories to be remitted by      it. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | Each      of the Corporation and the Subsidiaries has duly and timely collected all      amounts on account of any sales or transfer taxes, including goods and      services, harmonized sales and provincial or territorial sales taxes, US      sales and use tax, or value added tax, required by Law in the Territories      to be collected by it and has duly and timely remitted to the appropriate      Governmental Authority any such amounts required by Law in the      Territories to be remitted by it. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | Except      pursuant to this Agreement or as specifically disclosed in writing to the      Purchaser, for purposes of the Income Tax Act (Canada)      or any other applicable Tax legislation, no Person or group of Persons has      ever acquired or had the right to acquire control of the Corporation or of      any of the Subsidiaries. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j)   | None      of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income Tax Act      (Canada), or any equivalent provision of the Tax legislation of any      province or any other jurisdiction, have applied to the Corporation or to      any the Subsidiaries at any time up to and including the Closing      Date. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | Neither      the Corporation nor any of the Subsidiaries has acquired property from a      non-arm’s length Person, within the meaning of the Income Tax Act      (Canada), for consideration, the value of which is less than the fair      market value of the property acquired in circumstances which could subject      it to a liability under section 160 of the Income Tax Act (Canada)      or equivalent provision of the Tax legislation of any province or any      other jurisdiction. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | For      all transactions between the Corporation or any of the Subsidiaries and      any non-resident Person with whom the Corporation or any of the      Subsidiaries was not dealing at arm’s length during a taxation year      commencing after 2003 and ending on or before the Closing Date, each of      the Corporation and the Subsidiaries has made or obtained records or      documents that meet the requirements of paragraphs 247(4)(a) to (c) of the      Income Tax Act      (Canada) or equivalent provision of the Tax legislation of any      province or any other jurisdiction. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (m)   | All      investment tax credit or scientific research and experimental development      tax credits have been calculated and claimed in accordance with applicable      tax legislation, and to the knowledge of the Corporation any such amounts      receivable will be paid in full to the Corporation and/or the      Subsidiaries. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n)   | Each      of the Corporation and the Subsidiaries identified below is duly      registered under subdivision (d) of Division V of Part IX of the Excise Tax Act (Canada)      with respect to the goods and services tax and harmonized sales tax and      under any equivalent provision of the Tax legislation of any province or      any other jurisdiction, and the registration numbers of each of them      are: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      4 |   |   |
|-------------|--------|--------|

| (o)   | The      Purchaser has been provided with copies of all Tax Returns and all      communications to or from any Governmental Authority relating to the Taxes      of any of the Corporation and the Subsidiaries, to the extent relating to      periods or events in respect of which any Governmental Authority may by      Law assess or otherwise impose any such Tax on the Corporation or any of      the Subsidiaries. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

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| 4.44   | Books      and Records |
|------------------|------------------------|

| 4.45   | Corporate      Records |
|------------------|------------------------|

| (a)   | The      Articles and by-laws for the Corporation and the Subsidiaries, including      any and all amendments, have been delivered or made available to the      Purchaser and such Articles and by-laws as so amended are in full force      and effect and no amendments are being made to  them. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      corporate records and minute books for the Corporation and the      Subsidiaries have been delivered or made available to the Purchaser. Such      minute books are complete in all material respects, since the date of its      incorporation. The share certificate book, register of shareholders,      register of transfers and register of directors for the Corporation and      the Subsidiaries, are complete andaccurate. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.46   | Trade      Allowances |
|------------------|-----------------------|

| 4.47   | Bank      Accounts, etc. |
|------------------|--------------------------|

| 4.48   | Powers      of Attorney |
|------------------|-------------------------|

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| 4.49   | No      Bankruptcy/Insolvency |
|------------------|-------------------------------|

| 4.50   | No      Broker |
|------------------|----------------|

| 4.51   | Note      1 |
|------------------|-------------|

| 4.52   | Note      1 |
|------------------|-------------|

| 4.53   | Full      Disclosure |
|------------------|----------------------|

ARTICLE 5 

| 5.1   | Status      of the Purchaser |
|-----------------|------------------------------|

| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

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| 5.2   | Due      Authorization |
|-----------------|------------------------|

| 5.3   | Enforceability      of Obligations |
|-----------------|------------------------------------|

| 5.4   | Absence      of Conflicts |
|-----------------|---------------------------|

| (a)   | indenture,      mortgage, lease, agreement, obligation or  instrument; |
|-----------------|------------------------------------------------------------------------|

| (b)   | provision      of its charter or by-law; or |
|-----------------|---------------------------------------------|

| (c)   | Laws      or Governmental Authorizations; |
|-----------------|-------------------------------------------|

| 5.5   | Regulatory      Approvals |
|-----------------|---------------------------|

| 5.6   | No      Broker |
|-----------------|----------------|

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| 5.7   | Securities      Laws |
|-----------------|----------------------|

ARTICLE 6 

| 6.1   | Non-Waiver |
|-----------------|------------|

| 6.2   | Nature      and Survival |
|-----------------|--------------------------|

| (a)   | Subject      to Section 6.2(b), 6.2(c) and 6.2(d), all representations, warranties and      covenants contained in this Agreement on the part of each of the Parties      shall survive the Closing, the execution and delivery under this Agreement      of any share or security transfer instruments or other documents of title      to any of the Purchased Shares and the payment of the consideration for      the Purchased Shares. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | All      representations and warranties of the Vendors or the Corporation made in      this Agreement shall survive for a period of one year from the Closing      Date, except for: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | the      representations and warranties relating to or impacted by Tax matters,      including those set out in Section 4.43, arising in or in respect of a      particular period ending on or before the Closing Date, which shall      survive for a period of 90 days after the relevant authorities shall no      longer be entitled to assess or reassess liability against the Corporation      or any of the Subsidiaries for that particular period, having regard,      without limitation, to any waivers given by the Corporation or any of the      Subsidiaries in respect of any taxationyear; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | the      representations and warranties set out in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, 4.9 and 4.10 which shall survive      indefinitely. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | All      representations and warranties of the Purchaser made in this Agreement      shall survive for a period of one (1) year from the Closing Date, except      for the representations and warranties set out in Sections 5.1, 5.2, 5.3 and 5.7 which shall      survive indefinitely. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (d)   | If      no bona fide Claim shall have been made under this Agreement against a      Party for any incorrectness in or breach of any representation or warranty      made in this Agreement prior to the expiry of the survival periods set      forth in Sections 6.2(b) and 6.2(c),such      Party shall have no further liability under this Agreement with respect to      such representation or warranty. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Notwithstanding      any provision to the contrary in this  ARTICLE 6, any bona fide Claim      based on intentional misrepresentation or fraud may be brought at any      time. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ARTICLE 7 

| 7.1   | Truth      and Accuracy of Representations of Vendors at the Closing    Time |
|-----------------|------------------------------------------------------------------------------|

| 7.2   | Performance      of Obligations |
|-----------------|---------------------------------|

| 7.3   | Receipt      of Closing Documentation |
|-----------------|---------------------------------------|

| 7.4   | Opinions      of Counsel |
|-----------------|--------------------------|

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| 7.5   | Consents,      Authorizations and Registrations |
|-----------------|-------------------------------------------------|

| (a)   | All      consents, approvals, Orders and authorizations of any Person (and      registrations, declarations, filings or recordings with any Governmental      Authority) including, without limitation, of any shareholder of the      Corporation, required in connection with the completion of any of the      transactions contemplated by this Agreement, the execution of this      Agreement, the Closing or the performance of any of the terms and      conditions of this Agreement, and consents to the      disclosure of Personal Information to the Purchaser and the continuing use      of such Personal Information by the Corporation and the Subsidiaries in a      manner consistent with the operation of their respective businesses and      any consents required under Contracts shall have been obtained at or      before the Closing Time on terms acceptable to the Purchaser, acting      reasonably. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | All      consents, approvals, waivers or modifications to Restricted Rights      required by the Purchaser shall have been obtained at or before the      Closing Time on terms acceptable to the  Purchaser. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | The      Board of Directors of the Purchaser shall have approved the transactions      contemplated herein at or before the Closing  Time. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| 7.6   | No      Proceedings |
|-----------------|---------------------|

| 7.7   | Encumbrances      and Guarantees |
|-----------------|----------------------------------|

| (a)   | all      Encumbrances (including Non-Permitted Encumbrances listed on Schedule 4.23)      other than Permitted Encumbrances have been discharged and that the assets      of the Corporation and the Subsidiaries are free and clear of all      Encumbrances other than Permitted Encumbrances;  and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | full      and final releases have been obtained for any guarantee, surety or      indemnity, including those listed on Schedule 4.20, given      by the Corporation or any of the Subsidiaries in respect of indebtedness      or other obligations of any Person, or any other commitment for which the      Corporation or any of the Subsidiaries is, or is contingently,      responsible. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 7.8   | Non-Competition |
|-----------------|-----------------|

| 7.9   | Releases |
|-----------------|----------|

| 7.10   | Key      Employees |
|------------------|--------------------|

| 7.11   | No      Material Adverse Effect |
|------------------|---------------------------------|

| 7.12   | Directors      and Officers of the Corporation and of the  Subsidiaries |
|------------------|-------------------------------------------------------------------------|

| 7.13   | Good      Standing |
|------------------|--------------------|

| 7.14   | Stock      Option Plan |
|------------------|------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

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ARTICLE 8

| 8.1   | Truth      and Accuracy of Representations of the Purchaser at Closing      Time |
|-----------------|----------------------------------------------------------------------------------|

| 8.2   | Directors      and Officers of the Corporation and of the  Subsidiaries |
|-----------------|-------------------------------------------------------------------------|

| 8.3   | No      Proceedings |
|-----------------|---------------------|

| 8.4   | Escrow      Agreement |
|-----------------|-----------------------|

| 8.5   | Performance      of Obligations |
|-----------------|---------------------------------|

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ARTICLE 9 

| 9.1   | Tax      Returns |
|-----------------|------------------|

ARTICLE 10

| 10.1   | Indemnification      by the Vendors |
|------------------|-------------------------------------|

| (a)   | Each      Vendor shall severally indemnify as to himself or itself and not to any      other Vendor and save harmless the Purchaser, its directors, officers,      agents, employees and shareholders (collectively referred to as      the “Purchaser      Indemnified Parties”) from and against      all bona fide Claims, whether or not arising due to third party Claims,      which may be made or brought against the Purchaser Indemnified Parties, or      which they may suffer or incur, directly or indirectly as a result of or      in connection with or relating to: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | any      non-fulfilment or breach of any covenant or agreement on the part of the      applicable Vendor with respect to the particular representation and      warranty given by it contained in this Agreement under Sections 4.5, 4.6, 4.9 and 4.10 and 4.12 (solely as it relates to the applicable      Vendor), or in any certificate or other document furnished by or on behalf      of the applicable Vendor pursuant to this  Agreement; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | any      misrepresentation or any incorrectness in or breach of any representation      or warranty of the applicable Vendor contained in this Agreement, under      Sections 4.5, 4.6, 4.9 and 4.10 and 4.12 (solely as it      relates to the applicable Vendor), or in any certificate or other document      furnished by or on behalf of the applicable Vendor pursuant to this      Agreement; |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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| (b)   | Subject      to Section 10.1(c) and except for those matters for which each      Vendor has agreed to indemnify as to his or its own liability only      contained in Section 10.1(a)(i) and (ii) above, the Vendors shall indemnify and      save harmless the Purchaser Indemnified Parties on a several basis from      and against all bona fide Claims, whether or not arising due to third      party Claims, which may be made or brought against the Purchaser      Indemnified Parties, or which they may suffer or incur, directly or      indirectly, as a result of or in connection with or relating      to: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | any      non-fulfilment or breach of any covenant or agreement contained in this Agreement or in any      certificate or other document furnished by or on behalf of the Corporation      pursuant to this Agreement not referred to in Section 10.1(a)(i); |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | any misrepresentation or any incorrectness in or      breach of any representation or warranty contained in this Agreement or in      any certificate or other document furnished by or on behalf of the      Corporation pursuant to this Agreement not referred to in Section      10.1(a)(ii). |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | and,      without duplication: |
|--------|--------------------------------|

| (iii)   | liability      to third Persons and warranty obligations respecting products manufactured      or sold, or services provided, by the Corporation or any of the      Subsidiaries prior to the Closing Date and not accrued in the Closing Date      Financial Statements; |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | any      liability for Taxes in respect of any taxation year or other period ended      prior to the Closing Date, or any portion of a taxation year or other      period up to and including the Closing Date, for which no adequate reserve      has been provided and disclosed in the Balance Sheet, or the Closing Date      Financial Statements; |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | all Environmental, Health and Safety Liabilities for      which the Corporation or the Subsidiaries is liable, whenever and however      arising, at any Real Property or at any other property currently or      previously owned, leased or occupied by the Corporation or any of the      Subsidiaries, all existing at Closing, even if discovered after      Closing;  |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vi)   | any liability, whether former, present or future, of      the Corporation or of any of the Subsidiaries arising in connection with      the operation of the business of the Corporation or any of the      Subsidiaries up to and including the Closing Date with respect to Section      4.32, other than      obligations of the Corporation pursuant to any of the Contracts,      Encumbrances, Software Contracts or other agreements or matters disclosed      in Schedule 4.32; |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (vii)   | the      amount of excess, obsolete or unused consolidated Inventories in excess of      any reserve on the Closing Date Financial Statements, in accordance with      Section 4.26 hereof; |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (viii)   | Notes 3 and 5;      and |
|--------------------|-------------------------|

| (ix)   | any      Claim under the Stock Option Plan. |
|------------------|---------------------------------------------|

| (c)   | The      Vendors’ obligations under Section 10.1(a) and 10.1(b) shall be subject to the following      limitations: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | they      shall terminate on the date on which each representation and warranty of      the Vendors no longer survives as specified under Section 6.2, except with      respect and solely to the extent of bona fide      Claims by Purchaser Indemnified Parties set forth in written notices given      by a Purchaser Indemnified Party to Vendors Representative and any of the      applicable Vendors prior to the relevant specified  date; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | the aggregate indemnification payable by the Vendors      on a several basis in respect of all bona fide Claims, shall not exceed a      maximum amount equal to the Escrow Amount received by the applicable      Vendor on a pro-rata basis proportionate to the amount of the Purchase      Price otherwise payable to such Vendor out of the Escrow Amount, except      with respect to Claims based on intentional misrepresentation or fraud or      with respect to paragraphs 10.1(b)(iv), and (b)(vi), which shall be      subject to the limitation set out in Section 10.1(c) below; |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | the aggregate indemnification payable by the Vendors      on a several basis in respect of all bona fide Claims based on intentional      misrepresentation or fraud or with respect to paragraphs 10.1(b)(iv) and 10.1(b)(vi), shall not exceed a      maximum amount equal to the Purchase Price received by the applicable      Vendor on a pro-rata basis proportionate to the amount of Purchase Price      received by the applicableVendor. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

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| 10.2   | Indemnification      by the Purchaser |
|------------------|---------------------------------------|

| (a)   | The      Purchaser shall indemnify and save harmless the Vendors, their directors,      officers, employees, agents and shareholders (collectively referred to as      the “Vendors Indemnified      Parties”) from and against all Claims, whether or not arising due      to third party Claims, which may be made or brought against the Vendors      Indemnified Parties, or which they may suffer or incur, directly or      indirectly as a result of or in connection with or relating      to: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | any      non-fulfilment or breach of any covenant or agreement on the part of the      Purchaser contained in this Agreement or in any certificate or other      document furnished by or on behalf of the Purchaser pursuant to this      Agreement; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | any      misrepresentation or any incorrectness in or breach of any representation      or warranty of the Purchaser contained in this Agreement or in any      certificate or other document furnished by or on behalf of the Purchaser      pursuant to this Agreement. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      Purchaser’s obligations under Section 10.2(a)(ii) shall      terminate on the date on which each representation and warranty of      the Purchaser no longer survives as specified under Section 6.2, except      with respect to bona      fide Claims by Vendors Indemnified Parties set forth in written      notices given by a Vendors Indemnified Party to the Purchaser prior to      such date. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | Indemnification      Procedures for Third Party Claims |
|------------------|--------------------------------------------------------|

| (a)   | Notes      3, 4, 5 and 6 |
|-----------------|--------------------------|

| (b)   | Notes      3, 4, 5 and 6 |
|-----------------|--------------------------|

| (c)   | Notes      3, 4, 5 and 6 |
|-----------------|--------------------------|

| (d)   | Notes      3, 4, 5 and 6 |
|-----------------|--------------------------|

| (e)   | Notes      3, 4, 5 and 6 |
|-----------------|--------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

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| 10.4   | Set-Off |
|------------------|---------|

| (a)   | The      Purchaser shall be entitled to withhold and set-off, and cause the Escrow Agent to withhold on its behalf and      disburse to the Purchaser in accordance with the provisions set out in the      Escrow Agreement, any of the following amounts which the Purchaser is      entitled to receive pursuant to the indemnity provisions in      Section 10.1, against the Escrow      Amount that the Purchaser and the Escrow Agent would otherwise be required      to pay or disburse to the Vendors pursuant to the Escrow      Agreement: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | the amount of any Claim made by the Purchaser      Indemnified Parties pursuant to Section 10.1 that has not been disputed in writing by the      Vendors Representative within twenty (20) days from the date the Claim is      made; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | in respect of any disputed Claim made by the      Purchaser Indemnified Parties pursuant to Section 10.1 for which Vendors and the Purchaser have      reached a final compromise or settlement, the amount, if any, payable to      the Purchaser pursuant thereto;or |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | in respect of any disputed Claim made by the      Purchaser Indemnified Parties pursuant to Section 10.1 for which a final judgment of an arbitrator      nominated in accordance with the procedure set out in Section 11.1 has been obtained, the amount, if any, payable      to the Purchaser pursuantthereto. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   | Tax      Status of Indemnification Payments |
|------------------|---------------------------------------------|

ARTICLE10
ARTICLE 10

ARTICLE 11

| 11.1   | Arbitration |
|------------------|-------------|

----

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| (a)   | any      hearing in the course of the arbitration shall be held in Toronto, Ontario      by a single arbitrator; |
|-----------------|------------------------------------------------------------------------------------------------------------------|

| (b)   | the      application of section 7(2) of the Arbitration Act is expressly      excluded; |
|-----------------|----------------------------------------------------------------------------------------------|

| (c)   | subject      to section 44 of the Arbitration Act, any award or determination of      an arbitrator shall be final and binding on the parties and there shall be      no appeal on any ground, including, for greater certainty, any appeal on a      question of law, a question of fact, or a question of mixed fact and      law; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | despite      section 28(1) of the Arbitration Act, an arbitrator shall not,      without the written consent of all parties to the arbitration, retain any      expert; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | an      arbitrator may apportion the costs of the arbitration, including the      reasonable fees and disbursements of the parties, between or among the      parties in such manner as the arbitrator considers reasonable, provided      that an arbitrator shall not award costs on a distributive      basis; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | all      awards for the payment of money shall include prejudgment and postjudgment      interest in accordance with sections 127 to 130 of the Courts of Justice Act      (Ontario) with necessary modifications;and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | all      matters relating to the arbitration shall be kept confidential to the full      extent permitted by law and no individual shall be appointed as an      arbitrator unless he or she agrees in writing to be bound by this dispute      resolution provision. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.2   | Public      Notices |
|------------------|---------------------|

| 11.3   | Expenses |
|------------------|----------|

----

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| 11.4   | Notices |
|------------------|---------|

| (a)   | in      the case of a Notice to the Vendorsat: |
|-----------------|------------------------------------------------|

| (b)   | in      the case of a Notice to the Vendors Representative  at: |
|-----------------|-----------------------------------------------------------------|

| (c)   | in      the case of a Notice to the Purchaserat: |
|-----------------|--------------------------------------------------|

| 11.5   | Assignment |
|------------------|------------|

| 11.6   | Enurement |
|------------------|-----------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

----

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| 11.7   | Amendment |
|------------------|-----------|

| 11.8   | Further      Assurances |
|------------------|-------------------------|

| 11.9   | Execution      and Delivery |
|------------------|-----------------------------|

----

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|                                                   |         |                                                  |
|-----------------------------------------------------------------------|--------------|-----------------------------------------------------------------|
| Note      4                                                      |         | Note      4                                                |
|                                                                  |         |                                             |
| Note      4                                                      |         |                                                  |
|                                                        |         |                                                  |
| THE      VENGROWTH INVESTMENT FUND INC.  By:           |         | THE      VENGROWTH II INVESTMENT FUND INC.  By:  |
|                                                             | Name:   |                                                            |    | Name:  |
|                                                             | Title:       |                                                            |   | Title: |
|                                                        |         |                                                  |
|  EXFO      ELECTRO-OPTICAL ENGINEERING INC.  By:  |         |  BDC      CAPITAL INC.  By:                      |
|                                                        | Name:   |                                                            |     | Name:  |
|                                                             | Title:       |                                                            |   | Title: |
|                                                        |         |                                                  |
|  NAVTEL      COMMUNICATIONS INC.  By:             |         |                                                            |   |
|                                                        | Name:   |                                                            |   |   |
|                                                        | Title:  |                                                            |   |   |

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

----

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| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      7: | Already      disclosed publicly in another format in order to avoid      confusion. |
|--------------|-------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

----

Table of Contents

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

| Note      7: | Already      disclosed publicly in another format in order to avoid      confusion. |
|--------------|-------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

| Note      7: | Already      disclosed publicly in another format in order to avoid      confusion. |
|--------------|-------------------------------------------------------------------------------------|

----

Table of Contents

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      2: | Contains      confidential employee relatedinformation. |
|--------------|---------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

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----

Table of Contents

| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

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| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note      1: | Contains      confidential employee related information along with Vendors’ confidential      information. |
|--------------|------------------------------------------------------------------------------------------------------------------|

| Note      3: | Contains      confidential information that could be seriously prejudicial to the      interests of the EXFO Group. |
|--------------|---------------------------------------------------------------------------------------------------------------------|

| Note      4: | Contains      privilege information. |
|--------------|--------------------------------------|

| Note      5: | Contains      unnecessary information which is not affecting the overall understanding      of the transaction and the relateddocument. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Note      6: | Contains      Vendors’ confidential information that could be seriously prejudicial to      their interests. |
|--------------|--------------------------------------------------------------------------------------------------------------------|

----