ex4_38.htm


    
      

      

    

    


    FINAL

     

    


     

    


     

    Note
5

     

    THE
VENGROWTH INVESTMENT FUND INC.,

     

    THE
VENGROWTH II INVESTMENT FUND INC.

     

    and
BDC CAPITAL INC.

     

    - and
-

     

    EXFO
ELECTRO-OPTICAL ENGINEERING INC.

     

    - and
-

     

    NAVTEL
COMMUNICATIONS INC.

     

    


     

    


     

    SHARE
PURCHASE AGREEMENT

     

    March
26, 2008

     

    


     

    


     

    


     

    Stein
Monast l.l.p.

     

    


     

    


     

    


     

    


     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document

            


    

     

    


    
      

      

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE OF CONTENTS


     

    
      	
               
      ARTICLE 1

            	
               DEFINITIONS AND PRINCIPLES OF
      INTERPRETATION

            


    

     

    
      	
               
      

            	
              1.1

            	
              Definitions 

            


    

    
      	
               
      

            	
              1.2

            	
              Certain Rules of
  Interpretation 

            


    

    
      	
               
      

            	
              1.3

            	
              Knowledge 

            


    

    
      	
               
      

            	
              1.4

            	
              Entire
Agreement 

            


    

    
      	
               
      

            	
              1.5

            	
              Schedules 

            


    

     

    
      	
               
      ARTICLE 2 

            	
              PURCHASE AND SALE

            


    

     

    
      	
               
      

            	
              2.1

            	
              Action by Vendors and
  Purchaser 

            


    

    
      	
               
      

            	
              2.2

            	
              Place of
Closing 

            


    

    
      	
               
      

            	
              2.3

            	
              Restricted
Rights 

            


    

     

    
      	
                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 the
Vendors 

            


    

    
      	
               
      

            	
              4.6

            	
              Status of the Vendors and Right to
    Sell 

            


    

    
      	
               
      

            	
              4.7

            	
              Securities
Laws 

            


    

    
      	
               
      

            	
              4.8

            	
              Capitalization 

            


    

    
      	
               
      

            	
              4.9

            	
              Due
Authorization 

            


    

    
      	
               
      

            	
              4.10

            	
              Enforceability of
  Obligations 

            


    

    
      	
               
      

            	
              4.11

            	
              Absence of
Conflicts 

            


    

    
      	
               
      

            	
              4.12

            	
              Regulatory
Approvals 

            


    

    
      	
               
      

            	
              4.13

            	
              Financial
Statements 

            


    

    
      	
               
      

            	
              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

            	
              Product
Warranties 

            


    

    
      	
               
      

            	
              4.20

            	
              Absence of
Guarantees 

            


    

    
      	
               
      

            	
              4.21

            	
              Major Suppliers and
  Customers 

            


    

    
      	
               
      

            	
              4.22

            	
              Sufficiency of
Assets 

            


    

    
      	
               
      

            	
              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 

            


    

    
      	
               
      

            	
              4.28

            	
              Government
Grants 

            


    

    
      	
               
      

            	
              4.29

            	
              Business in Compliance with
  Law 

            


    

    
      	
               
      

            	
              4.30

            	
              Governmental
  Authorizations 

            


    

    
      	
               
      

            	
              4.31

            	
              Restrictive
Covenants 

            


    

    
      	
               
      

            	
              4.32

            	
              Intellectual
Property 

            


    

    
      	
               
      

            	
              4.33

            	
              Owned Real
Property 

            


    

    
      	
               
      

            	
              4.34

            	
              Leased Real
Property 

            


    

    
      	
               
      

            	
              4.35

            	
              Environmental
Matters 

            


    

    
      	
               
      

            	
              4.36

            	
              Employment
Matters 

            


    

    
      	
               
      

            	
              4.37

            	
              Collective
Agreements 

            


    

    
      	
               
      

            	
              4.38

            	
              Pension and Other Benefit
  Plans 

            


    

    
      	
               
      

            	
              4.39

            	
              Personal
Information 

            


    

    
      	
               
      

            	
              4.40

            	
              Insurance 

            


    

    
      	
               
      

            	
              4.41

            	
              Contracts 

            


    

    
      	
               
      

            	
              4.42

            	
              Litigation 

            


    

    
      	
               
      

            	
              4.43

            	
              Tax Matters 

            


    

    
      	
               
      

            	
              4.44

            	
              Books and
Records 

            


    

    
      	
               
      

            	
              4.45

            	
              Corporate
Records 

            


    

    
      	
               
      

            	
              4.46

            	
              Trade
Allowances 

            


    

    
      	
               
      

            	
              4.47

            	
              Bank Accounts,
etc. 

            


    

    
      	
               
      

            	
              4.48

            	
              Powers of
Attorney 

            


    

    
      	
               
      

            	
              4.49

            	
              No
Bankruptcy/Insolvency 

            


    

    
      	
               
      

            	
              4.50

            	
              No Broker 

            


    

    
      	
               
      

            	
              4.51

            	
              Note
      1: Contains confidential employee related information along with
      Vendor's confidential
information 

            


    

    
      	
               
      

            	
              4.52

            	
              Note
      1: Contains confidential employee related information along with
      Vendor's confidential
information 

            


    

    
      	
               
      

            	
              4.53

            	
              Full
Disclosure 

            


    

     

    
      	
               
      ARTICLE 5

            	
               REPRESENTATIONS AND WARRANTIES OF THE
      PURCHASER

            


    

     

    
      	
               
      

            	
              5.1

            	
              Status of the
Purchaser 

            


    

    
      	 	5.2	Due Authorization
	 	5.3	Ehforceability of Obligations
	
               
      

            	
              5.4

            	
              Absence of
Conflicts 

            


    

    
      	
               
      

            	
              5.5

            	
              Regulatory
Approvals 

            


    

    
      	
               
      

            	
              5.6

            	
              No Broker 

            


    

    
      	
               
      

            	
              5.7

            	
              Securities
Laws 

            


    

     

    
      	
               
      ARTICLE 6 

            	
              NON-WAIVER; SURVIVAL

            


    

     

    
      	
               
      

            	
              6.1

            	
              Non-Waiver 

            


    

    
      	
               
      

            	
              6.2

            	
              Nature and
Survival 

            


    

     

    
      	
               
      ARTICLE 7

            	
               PURCHASER’S CONDITIONS
  PRECEDENT

            


    

     

    
      	
               
      

            	
              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 

            


    

    
      	
               
      

            	
              7.5

            	
              Consents, Authorizations and
      Registrations 

            


    

    
      	
               
      

            	
              7.6

            	
              No
Proceedings 

            


    

    
      	
               
      

            	
              7.7

            	
              Encumbrances and
  Guarantees 

            


    

    
      	
               
      

            	
              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 

            


    

     

    
      	
                ARTICLE 8 

            	
              VENDORS’ CONDITIONS
PRECEDENT

            


    

     

    
      	
               
      

            	
              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 

            


    

     

    
      	
               
      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

            	
              Public
Notices 

            


    

    
      	
               
      

            	
              11.3

            	
              Expenses 

            


    

    
      	
               
      

            	
              11.4

            	
              Notices 

            


    

    
      	
               
      

            	
              11.5

            	
              Assignment 

            


    

    
      	
               
      

            	
              11.6

            	
              Enurement 

            


    

    
      	
               
      

            	
              11.7

            	
              Amendment 

            


    

    
      	
               
      

            	
              11.8

            	
              Further
Assurances 

            


    

    
      	
               
      

            	
              11.9

            	
              Execution and
Delivery 

            


    

    


     

    
      
        
          
          

        

        
           


          
            

          

        

        
          Table of Contents

        

      

    

    


    THIS SHARE PURCHASE AGREEMENT
is made as of March 26, 2008

     

    BETWEEN:

     

    Note
5

     

    and

     

    Note
5

     

    and

     

    Note
5

     

    


     

    and

     

    THE VENGROWTH INVESTMENT FUND
INC., a corporation governed by the laws of Canada,

     

    (“VenGrowth”)

     

    and

     

    THE VENGROWTH II INVESTMENT FUND
INC., a corporation governed by the laws of Canada,

     

    (“VenGrowth II”)

     

    and

     

    BDC CAPITAL INC., a
corporation governed by the laws of Canada,

     

    (“BDC”)

     

    (VenGrowth,
VenGrowth II and BDC are hereinafter called the “Venture Capital
Firms”)

     

    (the
Individual Vendors and the Venture Capital Firms are hereinafter called the
“Vendors”)

     

    And

     

    


     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document

            


    

     

     

    
       

      
        
          
            
            

          

          
             


            
              

            

          

          
            Table of Contents

          

        

      

       

    

    


    EXFO ELECTRO-OPTICAL ENGINEERING INC.
a corporation constituted under the laws of Canada,

     

    (the
“Purchaser”)

     

    and

     

    NAVTEL COMMUNICATIONS INC., a
corporation governed by the laws of Ontario,

     

    (the
“Corporation”)

     

     

    RECITALS:

     

    
      	
              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.

            


    

     

    THEREFORE, the Parties agree
as follows:

     

     

    ARTICLE 1

    DEFINITIONS
AND PRINCIPLES OF INTERPRETATION

     

     

    
      	
              1.1  

            	
              Definitions

            


    

     

    Whenever
used in this Agreement, the following words and terms have the meanings set out
below:

     

    “Accounts Payable” means
amounts owing by the Corporation or any of the Subsidiaries to any Person as of
the Closing Time, which are incurred in the normal course of business in
connection with the purchase of goods or services in accordance with the terms
of this Agreement to the extent reflected on the Closing Date Financial
Statements;

     

    “Accounts Receivable” means
accounts receivable, bills receivable, trade accounts, book debts and insurance
claims recorded as receivable in the Books and Records and other amounts due or
deemed to be due to the Corporation or any of the Subsidiaries including refunds
and rebates receivable to the extent reflected on the Closing Date Financial
Statements;

     

    “Accrued Liabilities” means
ordinarily recurring operating expenses of the Corporation and any of the
Subsidiaries incurred as of the Closing Time but which are not yet due and
payable as of the Closing Time and claims against the Corporation and any of the
Subsidiaries that are increasing with the passage of time or receipt of goods or
services but are not yet due and payable as of the Closing Time, including
accruals for vacation pay, customer rebates and allowances for product returns
to the extent reflected on the Closing Date Financial Statements, excluding (for
greater certainty) Accounts Payable;

     

     

    
       

      
        
          
            
            

          

          
            - 2
-

            
              

            

          

          
            Table of Contents

          

        

      

       

    

    “Affiliate” of any Person
means, at the time such determination is being made, any other Person
controlling, controlled by or under common control with such first Person, in
each case, whether directly or indirectly, and “control” and any derivation
thereof means the possession, directly or indirectly, of the power to direct the
management and the affairs of a Person whether through the ownership of voting
securities or otherwise;

     

    “Agreement” means this Share
Purchase Agreement, including all schedules, and all amendments or restatements,
as permitted, and references to “Article” or “Section” mean the specified
Article or Section of this Agreement;

     

    “Appurtenances” means
privileges, rights, easements, servitudes and appurtenances both at law and
equity, as applicable, belonging to or for the benefit of Real Property,
including means of access between Real Property and a public way, rights in
respect of or for any other uses upon which the present use is dependent (such
as pipelines, cables, railway sidings) and rights existing in and to any
streets, alleys, passages and other rights-of-way;

     

    “Arbitration Act” has the
meaning given in Section 11.1;

     

    “Arm’s length” has the meaning
that it has for purposes of the Income Tax Act
(Canada);

     

    “Balance Sheet” means the
consolidated balance sheet of the Corporation and the Subsidiaries as at
December 31, 2007, forming part of the Financial Statements;

     

    “Benefit Plans” means plans,
arrangements, agreements, programs, policies, practices or undertakings, whether
oral or written, formal or informal, funded or unfunded, insured or uninsured,
registered or unregistered to which the Corporation or any of the Subsidiaries
is a party or bound and in which the Employees participate or under which the
Corporation or any of the Subsidiaries has, or will have, any liability or
contingent liability (or pursuant to which payments are made, or benefits are
provided to, or an entitlement to payments or benefits may arise) with respect
to any of its Employees or former employees, directors or officers, individuals
working on contract with the Corporation or any of the Subsidiaries or other
individuals providing services to any of them of a kind normally provided by
employees (or any spouses, dependants, survivors or beneficiaries of any such
persons), excluding statutory benefit plans which the Corporation or any of the
Subsidiaries are required to participate in or comply with, including the Canada
Pension Plan and plans administered pursuant to applicable health tax, workplace
safety insurance and employment insurance legislation;

     

    “Books and Records” means books
and records of the Corporation and the Subsidiaries relating to the Corporation
or the Subsidiaries, including financial, corporate, operations and sales books,
records, books of account, sales and purchase records, lists of suppliers and
customers, formulae, business reports, plans and projections and all other
documents, surveys, plans, files, records, assessments, correspondence, and
other data and information, financial or otherwise, including all data,
information and databases stored on computer-related or other electronic
media;

     

    
       

      
        
          
            
            

          

          
            - 3
-

            
              

            

          

          
            Table of Contents

          

        

      

       

    

    “Business Day” means any day,
other than a Saturday or Sunday, on which banks in Toronto, Ontario and Québec
City, Québec are open for commercial banking business during normal banking
hours;

     

    “Claims” includes claims,
demands, complaints, grievances, actions, applications, suits, causes of action,
Orders, charges, indictments, prosecutions, or other similar processes,
assessments or reassessments, judgments, debts, liabilities, penalties, fines,
expenses, costs, damages or losses, including, out of pocket expenses and
professional fees, including reasonable fees and disbursements of legal counsel,
and all out of pocket costs incurred in pursuing any of the foregoing or any
proceeding relating to any of the foregoing;

     

    “Closing” means the completion
of the sale to and purchase by the Purchaser of the Purchased Shares under this
Agreement;

     

    “Closing Date” means March 26,
2008 or such other
date as the Parties may agree in writing as the date upon which the Closing
shall take place;

     

    “Closing Date Financial
Statements” means the consolidated balance sheet of the Corporation as at
the Closing Date, showing to the extent permitted in accordance with GAAP all of
the assets and liabilities of the Corporation consistently applied with those
used in the Financial Statements, prepared by the Vendors; the Purchaser may, at
its entire discretion, have such financial statements audited within the 30-day
delay provided for in Section 3.5 hereafter, and can choose the audit firm to
carry such audit, but will assume the audit fees thereof;

     

    “Closing Net Working Capital”
means:

     

    
      	
              (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.

            


    

     

    
       

      
        
          
            
            

          

          
            - 4
-

            
              

            

          

          
            Table of Contents

          

        

      

       

    

    
      	
              (e)  

            	
              Note
      3

            


    

     

     

    
      	
              (f)  

            	
              Note
      3

            


    

     

     

    
      	
              (g)  

            	
              Note
      3

            


    

     

     

    
      	
              (h)  

            	
              Note
      3

            


    

     

     

    Note
3

     

     

    


     

     

    
      	
              (ii)  

            	
              Note
      3

            


    

     

     

    All
amounts used to calculate the Closing Net Working Capital being in accordance
with GAAP applied on a consistent basis;

     

    “Closing Time” means noon
(12:00 pm) (Toronto time), on the Closing Date or such other time on such date
as the Parties may agree in writing as the time at which the Closing shall take
place;

     

    “Collective Agreements” means
collective agreements (including expired collective agreements which have not
been renewed) and related documents including benefit agreements, letters of
understanding, letters of intent and other written communications (including
arbitration awards) by which the Corporation or any of the Subsidiaries is bound
or which impose any obligations upon the Corporation or any of the Subsidiaries
or set out the understanding of the parties or an interpretation with respect to
the meaning of any provisions of such collective agreements;

     

    “Contracts” means contracts,
licences, leases, agreements, obligations, promises, undertakings,
understandings, arrangements, documents, commitments, entitlements or
engagements to which the Corporation or any of the Subsidiaries is a party or by
which any of them are bound or under which the Corporation or any of the
Subsidiaries has, or will have, any liability or contingent liability (in each
case, whether written or oral, express or implied), and includes any quotations,
orders, proposals or tenders which remain open for acceptance and warranties and
guarantees;

     

    


     

    


     

    


     

    


     

    
      	
              Note
      3:

            	
              Contains
      confidential information that could be seriously prejudicial to the
      interests of the EXFO Group.

            


    

     

    
       

      
        
          
            
            

          

          
            - 5
-

            
              

            

          

          
            Table of Contents

          

        

      

       

    

    “Copyrights” has the meaning
given in the Intellectual Property definition;

     

    “Corporation Source Code” has
the meaning given in section 4.32(g)(iii) ;

     

    “Customer Offerings” means (a)
the products or services (including Software and Documentation) that the
Corporation or the Subsidiaries (i) currently develops, manufactures, markets,
distributes, makes available, sells or licenses to third parties, or (ii) has
developed, manufactured, marketed, distributed, made available, sold or licensed
to third parties within the previous three (3) years, or (ii) currently plans to
develop, manufacture, market, distribute, make available, sell or license to
third parties in the future and (b) the services that the Corporation or the
Subsidiaries (i) currently provides or makes available to third parties, or (ii)
has provided or made available to third parties within the previous three (3)
years, or (iii) currently plans to provide or make available to third parties in
the future. A true and complete list of all Customer Offerings is set forth in
Schedule
1.1;

     

    “Developers” has the meaning
given in section 4.32(g)(iii);

     

    “Disputes” has the meaning
given in Section 11.1;

     

    “Documentation” means printed,
visual or electronic materials, reports, white papers, documentation,
specifications, designs, flow charts, code listings, instructions, user manuals,
frequently asked questions, release notes, recall notices, error logs,
diagnostic reports, marketing materials, packaging, labeling, service manuals
and other printed or electronic information describing the use, operation,
installation, configuration, features, functionality, pricing, marketing or
correction of a Customer Offering, whether or not provided to end
users.

     

    “Employees” means individuals
employed by the Corporation or any of the Subsidiaries on a full-time, part-time
or temporary basis, including those employees on disability leave, parental
leave or other absence;

     

    “Employment Contracts” means
Contracts, other than Benefit Plans, relating to the compensation, duties and
related matters of an Employee, including any communication or practice relating
to an Employee which imposes any obligation on the Corporation or any of the
Subsidiaries;

     

    “Encumbrances” means pledges,
liens, prior claims, legal hypothecs, hypothecs, charges, security interests,
leases, title retention agreements, mortgages, restrictions, developments or
similar agreements, easements, servitudes, rights-of-way, title defects,
options, rights of first refusal or adverse claims or encumbrances of any kind
or character whatsoever;

     

    “Environment” means the
environment and natural environment as defined in any Environmental Laws and
includes indoor air, the environment in the workplace, ground water, any living
things and the interacting natural systems that include components of air, land,
water, organic and inorganic matters and living things;

     

    
       

      
        
          
            
            

          

          
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    “Environmental Approvals” means
permits, certificates, licences, authorizations, consents, agreements,
instructions, directions, notices, registrations, approvals or other rights
made, issued, granted, conferred or required by a Governmental Authority
pursuant to any Environmental Law relating to the operations, business or assets
of the Corporation or any of the Subsidiaries and includes any sewer surcharge
or over strength agreements;

     

    “Environmental, Health and Safety
Liabilities” means any cost, damage,
expense (including legal, consultant and engineer fees and expenses), liability,
obligation or other responsibility arising from or under any Environmental Law
or Occupational Safety and Health Law or relating to the contamination of the
Environment, including those consisting of or relating to:

     

     

    
      	
              (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 Health
Law;

            


    

     

     

    
      	
              (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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    “Environmental Laws” means Laws
relating to the Environment (including the protection of the Environment) and
public health or safety, and includes Laws relating to any sewer system and to
the storage, generation, use, handling, manufacture, processing, labelling,
advertising, sale, display, transportation, treatment, reuse, recycling, Release
and disposal of Materials of Environmental Concern, including the common law and
civil law that relate to making responsible parties pay for damages relating to
the health or property of Persons or the Environment. Furthermore, shall also
mean any foreign, federal, provincial, state, local or municipal law, statute,
rule, Order, directive, judgment, permit, policy, guideline, treaty or
regulation or the common law relating to the environment, occupational health
and safety, or exposure of persons or property to Materials of Environmental
Concern, including any statute, regulation, administrative decision or Order
pertaining to: (i) the presence of or the treatment, storage, disposal,
generation, transportation, handling, distribution, manufacture, processing,
use, import, export, labelling, recycling, registration, investigation or
remediation of Materials of Environmental Concern or documentation related to
the foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release, threatened release, or accidental release into
the environment, the workplace or other areas of Materials of Environmental
Concern, including emissions, discharges, injections, spills, leaks, escapes or
dumping of Materials of Environmental Concern; (v) transfer of interests in or
control of real property which may be contaminated; (vi) community or worker
right-to-know disclosures with respect to Materials of Environmental Concern;
(vii) the protection of wild life, marine life and wetlands, and endangered
and threatened species; (vii) storage tanks, vessels, containers, abandoned or
discarded barrels and other closed receptacles; (ix) health and safety of
employees and other persons; and (x) restrictions on the use and waste of
hazardous substances in electrical and electronic equipment including the
legislation of the European Commission with reference to RoHS (restriction on
the use of certain hazardous substances in electrical and electronic equipment)
and WEEE (Waste Electric and Electronic Equipment);

     

     “Environmental Orders”
means Orders, notices or other communications made, issued, filed, imposed or
threatened by any Governmental Authority pursuant to any Environmental Laws or
related to any Environmental Health and Safety Liabilities and include
certificates of property use and Orders requiring investigation, assessment,
monitoring, managing, controlling, treatment, removal, excavation or remediation
(including risk assessment) of any site or Materials of Environmental Concern,
or requiring that any Release or any other activity be reduced, modified,
managed, controlled, stopped or eliminated or requiring any form of payment or
expenditure to be made (regardless as to the recipient) or co-operation be
provided to any Governmental Authority;

     

    “Escrow Agent” Note 4

     

    “Escrow Agreement” means the
escrow agreement entered into among the Escrow Agent, the Corporation, the
Vendors and the Purchaser on the Closing Date;

     

    “Escrow Amount” has the meaning
given in Section 3.2;

     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
       

      
        
          
            
            

          

          
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    “Estimated Base Purchase Price”
has the meaning given in Section 3.1;

     

    “Estimated Long-Term Debt”
means the Long-Term Debt as estimated in good faith by the Vendors as of the
Closing Date;

     

    “Estimated Net Working Capital”
means the Closing Net Working Capital as estimated in good faith by the Vendors
as of the Closing Date;

     

    “Financial Statements” means
the audited consolidated financial statements of the Corporation and the
Subsidiaries for the fiscal years ended December 31, 2005, December 31, 2006 and
December 31, 2007, consisting of the Balance Sheet and the statements of
earnings and retained earnings and cash flows and all notes thereto as reported
upon by PricewaterhouseCoopers LLP, Chartered Accountants, a copy of which is
attached as Schedule 
4.13;

     

    “GAAP” means generally accepted
accounting principles as defined by the Accounting Standards Board of the
Canadian Institute of Chartered Accountants in the Handbook of the Canadian
Institute of Chartered Accountants as at the relevant date;

     

    “Governmental Authorities”
means governments, regulatory authorities, governmental departments, agencies,
commissions, officials, ministers, Crown corporations, courts, bodies, boards,
tribunals or dispute settlement panels or other law, rule or regulation-making
organizations or entities in any jurisdiction with respect to any entity of the
Corporation:

     

     

    
      	
              (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;

            


    

     

    “Governmental Authorizations”
means authorizations, approvals, franchises, Orders, certificates, consents,
directives, notices, licences, permits, variances, agreements, instructions,
registrations or other rights issued to or required by the Corporation or any of
the Subsidiaries by or from any Governmental Authority;

     

    “Grants” has the meaning given
in Section  4.28;

     

    “Improvements” means plants,
buildings, structures, fixtures, erections and improvements located on, over,
under or upon the Real Property and mechanical, electrical, plumbing, heating
and air-conditioning systems relating to the Real Property, including any of the
foregoing under construction;

     

     

    “Indemnified Party” has the
meaning given in Section 10.3;

     

    “Indemnifying Party” has the
meaning given in Section  10.3;

     

    
       

      
        
          
            
            

          

          
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            Table of Contents

          

        

      

       

    

    “Independent Auditor” means
Grant Thornton LLP or
such other independent auditing firm as the Parties may otherwise
agree;

     

    “Information Technology” means
computer hardware, software in source code and object code form (including
documentation, interfaces and development tools), programs, websites for the
Corporation or any of the Subsidiaries, databases, telecommunications equipment
and facilities and other information technology systems owned, used or held by
the Corporation or any of the Subsidiaries;

     

    “Intellectual Property” means
intellectual property rights, whether registered or not, owned, licensed or
used, throughout the world, including:

     

    
      	
              (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 registrations
thereof;

            


    

     

     

    
      	
              (f)  

            	
              Information
      Technology and all registrations
thereof;

            


    

     

     

    
      	
              (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).

            


    

     

    "Intellectual Property
Registrations" means all certificates of registration and applications
for registration of Patent Rights, Trademarks, Copyrights and any other Owned
Intellectual Property, throughout the world.

     

    "Internal Systems" means the
Software and Documentation and the computer, communications and network systems
(both desktop and enterprise-wide), laboratory equipment, reagents, materials
and test, calibration and measurement apparatus used by the Corporation or any
of the Subsidiaries in their business or operations or to develop, manufacture,
fabricate, assemble, provide, distribute, support, maintain or test the Customer
Offerings, whether located on the premises of the Corporation or any of the
Subsidiaries or hosted at a third party Internet site.

     

    “Inventories” means items that
are held by the Corporation or any of the Subsidiaries for sale, license,
rental, lease or other distribution in the ordinary course of business, or are
being produced for sale, or are to be consumed, directly or indirectly, in the
production of goods or services to be available for sale, of every kind and
nature and wheresoever situated including inventories of finished goods and
work-in-progress, parts and components;

     

    “Laws” means applicable laws,
statutes, by-laws, rules, regulations, Orders, ordinances, protocols, codes,
guidelines, treaties, policies, notices, directions, decrees, judgments, awards
or requirements, in each case of any Governmental Authority;

     

    “Leased Real Property” means
lands and/or premises which are used by the Corporation or any of the
Subsidiaries and which are leased, subleased, licensed to or otherwise occupied
by the Corporation or any of the Subsidiaries;

     

    “Licensed Intellectual
Property” means Intellectual Property licensed to the Corporation or any
of the Subsidiaries excluding Off-the-Shelf Software;

     

    “Long-Term Debt” means the sum
of (i) the long-term portion of notes payable and other long term debt,
(ii) the long-term portion of capital lease obligations (excluding
operating leases), and (iii) any long-term portion of other interest bearing
debt, in all cases of the Corporation or the Subsidiaries;

     

    “Material Adverse Effect” means
a change, effect or circumstance that, when considered either individually or in
the aggregate together with all other adverse changes, effects or circumstances
with respect to which such phrase is used in this Agreement, is materially
adverse to, or could reasonably be expected to have a material adverse effect
on, the financial condition or results of operations of the Corporation or any
of the Subsidiaries;

     

    
       

      
        
          
            
            

          

          
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    "Materials of Environmental
Concern" means
any: pollutants, contaminants or hazardous substances, pesticides, solid wastes
and hazardous wastes, chemicals, other hazardous, radioactive, explosive or
toxic materials, asbestos and asbestos-containing
materials, polychlorinated biphenyls (PCBs) and mould, oil, petroleum and
petroleum products (and fractions thereof), biohazards and medical wastes, or
any other material (or article containing such material) (as such terms are
defined under applicable Environmental Laws), listed or subject to regulation
under any law, statute, rule, regulation, Order, permit, or directive due
to its potential, directly or indirectly, to harm the environment or the health
of humans or other living beings;

     

    “Net Adjustment Amount” has the
meaning given in Section 3.4(b);

     

    “Non-Permitted Encumbrances”
means Encumbrances which the Vendors have agreed to discharge prior to Closing
and listed in Schedule
4.23;

     

    “Notice” has the meaning given
in Section 11.4;

     

    “Objection Notice” has the
meaning given in Section  3.5;

     

    “Occupational Health and Safety
Law” means
any Law designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, including the Occupational Health and Safety
Act (Ontario), Workplace and Insurance Act
(Ontario), and any program, whether governmental or private (such as those
promulgated or sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions;

     

    “Off-the-Shelf Software” means currently
available, off-the-shelf software programs that are part of the Internal Systems
and are licensed by the Corporation or the Subsidiaries;

     

    "Open Source Materials" means
all Software, Documentation or other material that is distributed as "free
software", "open source software" or under a similar licensing or distribution
model, including, but not limited to, the GNU General Public License (GPL), GNU
Lesser General Public License (LGPL), Mozila Public License (MPL), or any other
license described by the Open Source Initiative as set forth on
www.opensource.org.

     

    “Orders” means orders,
injunctions, judgments, administrative complaints, decrees, rulings, awards,
assessments, directions, instructions, penalties or sanctions issued, filed or
imposed by any Governmental Authority or arbitrator, including Environmental
Orders;

     

    “Owned Real Property” means
real property owned by the Corporation or any of the Subsidiaries, and real
property, other than Leased Real Property, in which the Corporation or any of
the Subsidiaries has an ownership interest, including Improvements and
Appurtenances;

     

    ‘’Owned Intellectual Property’’
means Intellectual Property owned by the Corporation or any of the
Subsidiaries, and Intellectual Property in which the Corporation or any of the
Subsidiaries has an ownership interest;

     

    
       

      
        
          
            
            

          

          
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    “Patent Rights” has the meaning
given in the Intellectual Property definition;

     

    “Parties” means the Vendors and
the Purchaser collectively, and “Party” means any one of
them;

     

    “Pension Plans” means all
Benefit Plans providing pensions, superannuation benefits or retirement savings
including, without limitation, pension plans, top up pensions or supplemental
pensions, “registered retirement savings plans” (as defined in the Income Tax Act (Canada)),
“registered pension plans” (as defined in the Income Tax Act (Canada)) and
“retirement compensation arrangements” (as defined in the Income Tax Act
(Canada));

     

    “Permitted Encumbrances” means
the Encumbrances listed in Schedule
4.23;

     

    “Person” means any individual,
sole proprietorship, partnership, firm, entity, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body corporate,
Governmental Authority, and where the context requires any of the foregoing when
they are acting as trustee, executor, administrator or other legal
representative;

     

    “Personal Information” means
information in the possession or under the control of the Corporation or any of
the Subsidiaries about an identifiable individual;

     

    “Preliminary Offer” has the
meaning given in Section 1.4;

     

    "Product Registration" means
permission from any Governmental Authorities allowing Customer Offerings,
Software or any device to be lawfully distributed for commercial use in a
country, including establishment registration and Customer Offerings, Software
or any device listing with the applicable Governmental Authorities.

     

    “Purchase Price” means the
total net amount payable by the Purchasers to the Vendors for the Purchased
Shares pursuant to Article 3;

     

    “Purchased Shares” means all of
the issued and outstanding shares in the capital of the
Corporation;

     

    “Purchaser Indemnified Parties”
has the meaning given in Section 10.1(a);

     

    “Real Property” means Owned
Real Property and Leased Real Property;

     

    “Real Property Leases” means
Contracts pursuant to which the Corporation or any of the Subsidiaries uses or
occupies the Leased Real Property, including all rights to related Improvements
and Appurtenances;

     

    “Release” has the meaning
prescribed in any Environmental Laws for such term or any related term
(including discharge) and includes any release, spill, leak, pumping, addition,
pouring, emission, emptying, discharge, injection, escape, leaching, disposal,
dumping, deposit, spraying, burial, abandonment, incineration, seepage,
placement or introduction, whether accidental or intentional;

     

    
       

      
        
          
            
            

          

          
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    “Remedial Action” means all actions to (i)
cleanup, remove, treat or in any other way address the presence and/or movement
of Materials of Environmental Concern subject to an Environmental Order, in
violation of Environmental Laws or at concentrations exceeding remediation
guidelines published by Governmental Authorities; (ii) prevent the Release of
any Materials of Environmental Concern; (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care; (iv) correct a condition of
non-compliance with Environmental Laws or comply with an Environmental Order; or
(v) address, correct or respond to an Environmental, Health and Safety Liability
or any other claim;

     

    “Restricted Right” means any
Contract or Governmental Authorization which by its terms requires consent or
approval of the other party or parties thereto or the issuer for completion of
the transactions contemplated by this Agreement or in respect of which the
completion of the transactions contemplated by this Agreement will increase the
obligations or decrease the rights or entitlements of the Corporation or any of
the Subsidiaries under such Contract or Governmental Authorization;

     

    “Review Period” has the meaning
given in Section 3.5(a);

     

    "Software" shall mean all
computer programs and all updates, upgrades and all versions thereof owned or
licensed, by the Corporation or any of the Subsidiaries and developed, sold,
licensed to third parties, marketed or supported by the Corporation or the
Subsidiaries in their normal course of business, including but not limited to
all computer software code, applications, utilities, development tools,
diagnostics, databases and embedded systems, whether in source code, interpreted
code or object code form, program files, data files, computer related data,
field and data definitions and relationships, data definitions specifications,
data models, programs and systems logic, interfaces, program modules, routines,
sub-routines, algorithms, program architecture, design concepts, system designs,
program structure, sequence and organization, screen displays and report
layouts;

     

    “Software Contracts” has the
meaning given in section 4.32(c);

     

    “Stock Option Plan” means the
stock option plan established by the Corporation on July 1, 2003 and
amended on or about April, 2004, for the purpose of attracting, retaining
and motivating key employees;

     

    “Subsidiaries” means Navtel
Sales Limited («Navtel
Sales»), Navtel International inc. («Navtel International»),
Navtel Communications (U.S.) inc. («Navtel USA») and Navtel
Deutschland GmbH («Navtel
Deutschland»);

     

    “Tangible Personal Property”
means machinery, equipment, furniture, furnishings, office equipment, computer
hardware, supplies,
materials, vehicles, material handling equipment, implements, parts, tools,
jigs, dies, moulds, patterns, tooling and spare parts and tangible assets (other
than Real Property and Inventory) owned or used or held by the Corporation or
any of the Subsidiaries, including (i) any of the foregoing which are in storage
or in transit; (ii) other tangible personal property of the Corporation or any
of the Subsidiaries whether located in or on the Real Property or elsewhere; and
(iii) any of the foregoing which may be attached to Real Property but are not
Improvements;

     

    
       

      
        
          
            
            

          

          
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    “Target Net Working Capital”
Note 4

     

    “Tax Returns” includes all
returns, reports, declarations, elections, claim for refund, notices, filings,
forms, statements and other documents (whether in tangible, electronic or other
form) and including any amendments, schedules, attachments, supplements,
appendices and exhibits thereto, made, prepared, filed or required to be made,
prepared or filed by Law in respect of Taxes;

     

    “Taxes” includes, in any
jurisdiction with respect to any entity of the Corporation and the Subsidiaries,
(i) any taxes, duties, fees, premiums, withholdings, assessments, imposts,
levies and other charges of any kind whatsoever imposed by any Governmental
Authority, including all interest, penalties, fines, additions to tax or other
additional amounts imposed by any Governmental Authority in respect thereof, and
including those levied on, or measured by, or referred to as, income, gross
receipts, profits, capital, transfer, land transfer, sales, goods and services,
US sales and use tax, value added tax, harmonized sales, use, value-added,
excise, stamp, withholding, business, franchising, property, development,
occupancy, employer health, payroll, employment, health, social services,
education and social security taxes, all surtaxes, all customs duties and import
and export taxes, all licence, franchise and registration fees and all
employment insurance, health insurance and Canada, Ontario, US, Germany, and
other government pension plan premiums or contributions, and (ii) any
amounts described in (i) of any other Person which such entity is obligated
by Law or Contract entered into prior to Closing to assume or pay;

     

    “Technical Information” means
know-how and related technical knowledge owned, used or held by the Corporation
or any of the Subsidiaries, including:

     

     

    
      	
              (a)  

            	
              trade
      secrets, confidential information and other proprietary
      know-how;

            


    

     

     

    
      	
              (b)  

            	
              public
      information and non-proprietary
know-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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    “Territories” means the
jurisdictions in which the Corporation or any of the Subsidiaries currently
carries on business under applicable Laws;

     

    “Trademarks” has the meaning
given in the Intellectual Property definition;

     

    “Union” means an organization
of employees formed for purposes that include the regulation of relations
between employees and employers and includes any organization which has been
declared a union pursuant to applicable labour relations legislation or which
may qualify as a Union;

     

    “Unlicensed Intellectual
Property” means critical Intellectual Property used by the Corporation or
any of the Subsidiaries which does not constitute Owned Intellectual Property or
Licensed Intellectual Property

     

    “Vendors Indemnified Parties”
has the meaning given in Section  10.2(a); and

     

    “Vendors IP Registrations” has
the meaning given in section 4.32(a).

     

    “Vendors Representative” has
the meaning given in section 3.6.

     

    
      	
              1.2  

            	
              Certain
      Rules of Interpretation

            


    

     

    In this
Agreement:

     

    
      	
              (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) without
limitation”.

            


    

     

    
      	
              (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 Business
Day.

            


    

     

    
      	
              1.3  

            	
              Knowledge

            


    

     

    Any
reference to the knowledge of any Party means to the best of the knowledge,
information and belief of such Party after reviewing all relevant records of the
Corporation or Subsidiaries, as applicable, and making due inquiries regarding
the relevant matter of all relevant directors, officers and employees of such
Party and, in the case of the knowledge of the Corporation, includes
specifically the knowledge of Notes 2, 4 and 5

     

    


     

    


     

    


     

    
      	
              Note
      2:

            	
              Contains
      confidential employee related
information.

            


    

     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

    
       

      
        
          
            
            

          

          
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              1.4  

            	
              Entire
      Agreement

            


    

     

    This
Agreement and the agreements and other documents required to be delivered
pursuant to this Agreement, constitute the entire agreement between the Parties
and set out all the covenants, promises, warranties, representations, conditions
and agreements between the Parties in connection with the subject matter of this
Agreement and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, pre-contractual or otherwise, including
the non-binding preliminary offer executed by the Purchaser and CIBC World
Markets on Note 4 (the
“Preliminary Offer”).
There are no covenants, promises, warranties, representations, conditions,
understandings or other agreements, whether oral or written, pre-contractual or
otherwise, express, implied or collateral between the Parties in connection with
the subject matter of this Agreement except as specifically set forth in this
Agreement and any document required to be delivered pursuant to this
Agreement.

     

     

    
      	
              1.5  

            	
              Schedules

            


    

     

    The
schedules to this Agreement are an integral part of this Agreement.

     

     

    ARTICLE 2

    PURCHASE
AND SALE

     

     

    
      	
              2.1  

            	
              Action
      by Vendors and Purchaser

            


    

     

    Subject
to the provisions of this Agreement, at the Closing Time:

     

     

    
      	
              (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 and
3.5.

            


    

     

     

    
      	
              (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

            


    

     

    The
Closing shall take place at the Closing Time at the offices of Gardiner Roberts
LLP, Scotia Plaza, 40 King Street West 31st Floor Toronto, Ontario, M5H 3Y2,
Canada, or at such other place as may be agreed upon by the Vendors and the
Purchaser.

     

     

    
      	
              2.3  

            	
              Restricted
      Rights

            


    

     

    If at
Closing there are any Restricted Rights in respect of which necessary consents,
approvals, waivers or modifications have not been obtained, then the Purchaser
may waive the closing condition under Section 7.5 with respect to such
Restricted Rights.

     

    If the
Purchaser waives the condition in Section 7.5 and the Closing occurs, the
Vendors shall reasonably cooperate with the Purchaser in its efforts to obtain
all consents, approvals, waivers or modifications acceptable to the Purchaser at
the sole expense of the Purchaser provided such request for cooperation remains
reasonable.

     

     

    ARTICLE 3

    PURCHASE
PRICE

     

     

    
      	
              3.1  

            	
              Estimated
      Base Purchase Price

            


    

     

    The
amount payable by the Purchaser for the Purchased Shares at the Closing Time,
exclusive of all applicable sales and transfer taxes, shall be comprised of
shall be determined in accordance with the following formula:

     

    A + [B –
C] - D

     

    Where:

     

     

    A:           shall
be the base purchase price of Note 7

     

     

    B:           shall
be the Estimated Net Working Capital;

     

     

    C:           shall
be the Target Net Working Capital;

     

     

    D:           shall
be the Estimated Long-Term Debt.

     

     

    (the
“Estimated Base Purchase Price”).

     

    


     

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

     

    
       

      
        
          
            
            

          

          
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              3.2  

            	
              Satisfaction
      of the Purchase Price

            


    

     

    The
Purchaser shall satisfy the payment of the Purchase Price as
follows:

     

     

    
      	
              (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 Financial
Statements

            


    

     

    As soon
as reasonably practicable after the Closing Date and in any event not later than
forty-five (45) days thereafter, the Vendors shall deliver to the Purchaser the
unaudited Closing Date Financial Statements. The Parties shall cooperate fully
in the preparation of the Closing Date Financial Statements within the time
required in this Section 3.3.

     

     

    
      	
              3.4  

            	
              Net
      Working Capital and Long-Term Debt
Adjustments

            


    

     

     

    
      	
              (a)  

            	
              Subject
      to Section 3.5, the Purchase Price shall
be:

            


    

     

     

    
      	
              (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 Financial
Statements

            


    

     

     

    
      	
              (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 such
amount.

            


    

     

     

    
      	
              (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

    REPRESENTATIONS
AND WARRANTIES OF THE VENDORS

     

    Each of
the Vendors (as to himself or itself and not as to any other Vendor), represents
and warrants to the Purchaser on a several basis, the matters set out in
sections 4.5, 4.6 4.9 and 4.10) and 4.12 (to the extent that Section 4.12
relates to the Vendors and not the Corporation or its
Subsidiaries).

     

    Except
for the matters specifically identified above, each of the Vendors represents
and warrants to the Purchaser on a several basis the balance of the matters set
out in this ARTICLE 4.

     

     

    
      	
              4.1  

            	
              Incorporation
      and Corporate Power

            


    

     

    The
Company 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.

     

     

    
      	
              4.2  

            	
              Registration

            


    

     

    Neither
the nature of the Corporation’s business nor the location or character of the
assets owned or leased by the Corporation requires it to be registered, licensed
or otherwise qualified as an extra-provincial or foreign corporation in any
jurisdiction other than in Ontario where it is duly registered, licensed or
otherwise qualified for such purpose.

     

    
      	
              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 such
purpose.

            


    

     

     

    
      	
              (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

            


    

     

    The
Corporation is the sole registered and beneficial owner of all of the issued and
outstanding shares in the capital of each of Navtel Sales and Navtel
International, free and clear of all Encumbrances, and the shares of each of
Navtel Sales and Navtel International are not subject to any shareholders
agreement. Navtel Sales is the sole registered and beneficial owner of all of
the issued and outstanding shares in the capital of each of Navtel USA and
Navtel Deutschland, free and clear of all Encumbrances, and the shares of each
of Navtel USA and Navtel Deutschland are not subject to any shareholders
agreement.

     

    
       

      
        
          
            
            

          

          
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    The
Corporation does not own directly or indirectly, or have any direct or indirect
interest in any shares or have an ownership interest in any other Person other
than its shareholdings in the Subsidiaries.

     

    
      	
              4.5  

            	
              Residence
      of the Vendors

            


    

     

    Each of
the Vendors is not a non-resident of Canada for the purposes of the Income Tax Act
(Canada).

     

    
      	
              4.6  

            	
              Status
      of the Vendors and Right to Sell

            


    

     

    Each of
VenGrowth and VenGrowth II is a corporation existing under the laws of
Canada. BDC is a corporation existing under the laws of Canada. The Vendors are
the sole registered and beneficial owners of the Purchased Shares, free and
clear of all Encumbrances. Each of the Vendors has the exclusive right to
dispose of the Purchased Shares as provided in this Agreement and such
disposition will not violate, contravene, breach or offend against or result in
any default under any Contract, charter or by-law provision, Order, judgment,
decree, licence, permit or Law, to which any of the Vendors is a party or
subject or by which any of the Vendors is bound or affected. Other than the
Shareholders Agreement Note
6 which will be terminated immediately prior to the Closing Time, the
Purchased Shares are not subject to the terms of any shareholders
agreement.

     

    
      	
              4.7  

            	
              Securities
      Laws

            


    

     

    The
Corporation is an issuer: (i) that is not a reporting issuer or an investment
fund; (ii) whose securities, other than non-convertible debt securities, (A) are
subject to restrictions on transfer that are contained in its constating
documents or security holders’ agreements, and (B) are beneficially owned
directly or indirectly, by not more than 50 Persons, not including employees and
former employees of the Corporation or its affiliates, provided that each Person
is counted as one beneficial owner unless the Person is created or used solely
to purchase or hold securities of the issuer in which case each beneficial owner
or each beneficiary of the Person, as the case may be, must be counted as a
separate beneficial owner, (iii) that has distributed securities only to Persons
described in Section 2.4 of National Instrument 45 106 - Prospectus and
Registration Exemptions. Assuming the accuracy of the representations and the
warranties of the Purchaser in Section 5.7, the sale of the Purchased Shares
constitutes a transaction exempt from the dealer registration and prospectus
requirements under applicable Canadian securities Laws.

     

    
      	
              4.8  

            	
              Capitalization

            


    

     

    The
authorized and issued share capital of the Corporation and each of the
Subsidiaries is as set forth in Schedule 4.8. All of the
Purchased Shares and all the shares of each of the Subsidiaries have been duly
and validly issued and are outstanding as fully paid and non-assessable shares.
No options, warrants or other rights to purchase shares or other securities of
the Corporation or the Subsidiaries and no securities or obligations convertible
into or exchangeable for shares or other securities of the Corporation or the
Subsidiaries have been authorized or agreed to be issued or are outstanding, and
in any case, such options, warrants or other rights, or convertible securities
or obligations, will have been terminated or cancelled prior to
Closing.

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

    
       

      
        
          
            
            

          

          
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              4.9  

            	
              Due
      Authorization

            


    

     

    Each of
the Vendors who is a corporation has all necessary corporate power, authority
and capacity to enter into this Agreement and each other agreement to be entered
into under the terms of this Agreement and to carry out its obligations
thereunder. The execution and delivery of this Agreement and of each other
agreement to be entered into under the terms of this Agreement and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action of each of the Vendors who is a
corporation.

     

     

    
      	
              4.10  

            	
              Enforceability
      of Obligations

            


    

     

    This
Agreement constitutes, and each other agreement to be executed by each of the
Vendors in connection with the Closing will constitute, a valid and binding
obligation of each of the Vendors enforceable against it in accordance with its
terms, subject, however, to limitations with regards to enforcement imposed by
Law in connection with bankruptcy or similar proceedings and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the court from which they are sought.

     

     

    
      	
              4.11  

            	
              Absence
      of Conflicts

            


    

     

    Except
for the Restricted Rights which are listed on Schedule 4.11, neither the
Corporation nor any of the Subsidiaries is a party to, bound or affected by or
subject to any:

     

     

    
      	
              (a)  

            	
              Contract;

            


    

     

     

    
      	
              (b)  

            	
              charter
      or by-law of such entity; or

            


    

     

     

    
      	
              (c)  

            	
              Laws
      or Governmental Authorizations;

            


    

     

    that
would be violated, breached by, or under which default would occur or an
Encumbrance would be created, or in respect of which the obligations of the
Corporation or any of the Subsidiaries will increase or the rights or
entitlements of the Corporation or any of the Subsidiaries will decrease or any
obligation on the part of the Corporation or any of the Subsidiaries to give
notice to any Governmental Authority will arise, as a result of the execution
and delivery of, or the performance of obligations under, this Agreement or any
other agreement to be entered into under the terms of this Agreement. There has
been no sale, assignment, subletting, licensing or granting of any rights in or
other disposition of or in respect of any of the Corporation’s or any of the
Subsidiaries’ assets or any granting of any Contract or right capable of
becoming an agreement or option for the purchase, assignment, subletting,
licensing or granting of any rights in or other disposition of any of such
assets other than pursuant to the provisions of, or as disclosed in, this
Agreement or pursuant to purchase orders accepted by the Corporation or any of
the Subsidiaries in the ordinary course of business.

     

    
       

      
        
          
            
            

          

          
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              4.12  

            	
              Regulatory
      Approvals

            


    

     

    No
approval, Order, consent of or filing with any Governmental Authority is
required on the part of the Vendors, the Corporation or the Subsidiaries, in
connection with the execution, delivery and performance of this Agreement or any
other documents and agreements to be delivered under this Agreement or the
performance of the Vendors’ obligations under this Agreement or any other
documents and agreements to be delivered under this Agreement.

     

     

    
      	
              4.13  

            	
              Financial
      Statements

            


    

     

    The
audited consolidated financial statements of the Corporation and of each of the
Subsidiaries for the fiscal years ended Note 5 have been prepared in
accordance with GAAP applied on a basis consistent with that of the preceding
period and present fairly:

     

     

    
      	
              (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

            


    

     

    Neither
the Corporation nor any of the Subsidiaries has incurred any material
liabilities or obligations (whether accrued, absolute, contingent or otherwise),
which continue to be outstanding, except (a) as disclosed in the Financial
Statements, (b) as disclosed on Schedule 4.15, or (c) as
incurred in the ordinary course of business.

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

     

    
      
        
        

      

      
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              4.16  

            	
              Absence
      of Changes and Unusual Transactions

            


    

     

    Except as
disclosed in Schedule 4.16,
since Note
5

     

    
      	
              (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 Adverse
Effect;

            


    

     

    
      	
              (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 a
whole;

            


    

     

    
      	
              (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 related
document.

            


    

     

    
       

      
        
          
            
            

          

          
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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 the
Subsidiaries;

            


    

     

     

    
      	
              (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

            


    

     

     

    Other
than as disclosed in Schedule 4.17, no current
or former director or officer, shareholder or employee of, or any other Person
not dealing at arm’s length with, the Corporation or any of the Subsidiaries or
any of the Vendors is engaged in any arrangement with or is a party to a
Contract with, or has an indebtedness, liability or obligation to, the
Corporation or the Subsidiaries, except for employment arrangements with
Employees, the terms of which are disclosed in Schedule 
4.36.

     

    No
Affiliate of the Corporation or of the Subsidiaries (a) owns any property or
right, tangible or intangible, which is used in the business of the Company or
the Subsidiary, (b) has any claim or cause of action against the Corporation or
the Subsidiaries, or (c) owes any money to, or is owed any money by, the
Corporation or the Subsidiaries, other than (i) for payment of salaries for
services rendered, (ii) reimbursement for customary and reasonable expenses
incurred on behalf of the Corporation or the Subsidiaries in the ordinary course
of business, and (iii) for other standard employee benefits available to the
Employees generally.

     

    
      	
              4.18  

            	
              No
      Joint Venture Interests or Strategic
Alliances

            


    

     

    Neither
the Corporation nor any of the Subsidiaries is a party to a strategic alliance
or co-operative agreement or is a partner, beneficiary, trustee, co-tenant,
joint-venturer or otherwise a participant in any partnership, trust, joint
venture, co-tenancy or similar jointly owned business undertaking and neither
the Corporation nor any of the Subsidiaries has significant investment interests
in any business owned or controlled by any third party.

     

    
       

      
        
          
            
            

          

          
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              4.19  

            	
              Product
      Warranties

            


    

     

    Schedule 4.19 is a
complete list of all express, written warranties given to purchasers of products
supplied by the Corporation or any of the Subsidiaries in connection with their
business. The Books and Records accurately and correctly set out and disclose,
in accordance with GAAP, the provisions with respect to the written warranties
as at the date hereof.

     

     

    
      	
              4.20  

            	
              Absence
      of Guarantees

            


    

     

    Neither
the Corporation nor any of the Subsidiaries has given or agreed to give, or is a
party to or bound by, any guarantee, surety or indemnity in respect of
indebtedness, or other obligations, of any Person, or any other commitment by
which the Corporation or any of the Subsidiaries is, or is contingently,
responsible for such indebtedness or other obligations.

     

     

    
      	
              4.21  

            	
              Major
      Suppliers and Customers

            


    

     

    Schedule 4.21 sets forth a
comprehensive listing of each supplier of goods and services to, and each
customer of, the Corporation and each of the Subsidiaries Notes 3 and 5, together with
each supplier that is the sole supplier of any significant product or service to
the Corporation or the Subsidiaries, the lack of which would reasonably be
expected to result in a material liability or a material restriction on the
operation of the business of the Corporation or the Subsidiaries. Since Notes 3 and 5, there has been
no termination or modification or change in any material respect in the business
relationship with any such supplier or customer. To the knowledge of the
Corporation, no such supplier or customer has any intention to change its
relationship or the terms upon which it conducts business with the Corporation
or the Subsidiaries as a result of the transactions contemplated in this
Agreement or otherwise.

     

    The
agreements entered into by the Corporation or any of the Subsidiaries for the
sale of Inventories or the provision of services by the Corporation or any of
the Subsidiaries have been entered into in the ordinary course of their business
consistent with past practice. The agreements entered into by the Corporation or
any of its Subsidiaries for the provision of services or goods to the
Corporation or any of the Subsidiaries are for quantity, terms and quality
reasonable with the level of their business and have been entered into in the
ordinary course of their business.

     

     

    
      	
              4.22  

            	
              Sufficiency
      of Assets

            


    

     

    The Real
Property Leases, Tangible Personal Property, Contracts, Accounts Receivable,
Owned Intellectual Property, Licensed Intellectual Property and Unlicensed
Intellectual Property, Governmental Authorizations and Inventories of the
Corporation and the Subsidiaries are sufficient for the continued conduct of the
Corporation’s and the Subsidiaries’ businesses as currently conducted as at the
Closing.

     

    
      	
              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 related
document.

            


    

     

    
       

      
        
          
            
            

          

          
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              4.23  

            	
              Title
      to Certain Assets

            


    

     

    Except
with respect to Owned Intellectual Property, Licensed Intellectual Property and
Unlicensed Intellectual Property (which is dealt with in Section 4.32), and
leased assets mentioned in Schedule 4.23 each of the
Corporation and the Subsidiaries is the sole legal and beneficial and (where its
interests are registrable) the sole registered owner of all of its assets, with
good and valid title, free and clear of all Encumbrances, other than Permitted
Encumbrances and Non-Permitted Encumbrances (which will be discharged prior to
Closing).

     

     

    
      	
              4.24  

            	
              Condition
      of Certain Assets

            


    

     

    The
Tangible Personal Property is in good condition, repair and (where applicable)
proper working order, reasonable wear and tear excepted having regard to its use
and age, subject to normal maintenance and repair.

     

     

    
      	
              4.25  

            	
              Location
      of the Assets

            


    

     

    All of
the assets of the Corporation and the Subsidiaries are located on the Real
Property except for the assets listed on Schedule 4.25 which are in
transit to or from the Real Property.

     

     

    
      	
              4.26  

            	
              Inventories

            


    

     

    Inventories
of finished goods are saleable and all other Inventories are merchantable or
usable and all Inventories are in quantities usable or saleable in the ordinary
course of business; subject to any unusable, obsolete or excess inventories
which have been reserved for in the Books and Records. The Inventory levels have
been maintained at the amounts required for the operations of the Corporation
and the Subsidiaries as currently conducted based on past practice. The
Inventories of finished goods conform in all material respects with their
respective specifications and all published representations and warranties
therefor.

     

     

    
      	
              4.27  

            	
              Collectibility
      of Accounts Receivable

            


    

     

    To the
knowledge of the Corporation, the 10% of the Accounts Receivable not insured by
Export Development Corporation are good and collectible at the aggregate
recorded amounts within one hundred and eighty (180) days from the Closing Date,
except to the extent of any reserves and allowances for doubtful accounts
provided for such Accounts Receivable in the Books and Records, and are not
subject to any defence, counterclaim or set off. The Accounts Receivable are
insured as to ninety percent (90%) of their value by Export Development
Canada.

     

    


    
      
        
          
          

        

        
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              4.28  

            	
              Government
      Grants

            


    

     

    There have been no
grants or other forms of assistance received by the Corporation or any of the
Subsidiaries from any Governmental Authority (collectively, the “Grants”) Notes 3 and 5, save and except
scientific research and experimental development credits, and no Grants
previously received may have to be reimbursed.

     

     

    
      	
              4.29  

            	
              Business
      in Compliance with Law

            


    

     

    Each of
the Corporation and the Subsidiaries is currently conducting, and during the
past Notes 3 and 5 has
conducted, their respective businesses in compliance in all material respects
with applicable Law (including rules and regulations thereunder) of any federal,
provincial, state, local, municipal or foreign government, or any other
Governmental Authorities in those jurisdiction the Laws of which are now
applicable to the business or products of the Corporation on the Subsidiaries,
except for violations or defaults that, individually or in the aggregate, have
not had and would not reasonably be expected to result in a Material Adverse
Effect. Neither the Corporation nor the Subsidiaries has received any written
notice or communication from any Governmental Authorities alleging
non-compliance with any applicable Law, rule or regulation, except with respect
to non-compliance that, individually or in the aggregate, has not had and would
not reasonably be expected to result in a Material Adverse Effect. There are no,
and there have not Notes 3 and
5 been any, adverse or negative past performance evaluations or ratings
by any Governmental Authorities relating to the business or products of the
Corporation or of the Subsidiaries which have been communicated to the
Corporation or any of the Subsidiaries.

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    
      	
              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 related
document.

            


    

     

    


    
      
        
          
          

        

        
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              4.30  

            	
              Governmental
      Authorizations

            


    

     

    Schedule 4.30 sets forth a
complete list of the Governmental Authorizations required in the conduct of the
Business as currently conducted and true and complete copies of such
authorizations have been delivered or made available to the Purchaser. The
Governmental Authorizations listed in Schedule 4.30 are all
the authorizations required by the Corporation or the Subsidiaries to enable
each of them to carry on its business in compliance with applicable Laws to the
particular corporation in the Territories. Such Governmental Authorizations are
in full force and effect in accordance with their terms, and to the knowledge of
the Corporation no event has occurred which is a violation of any such
Governmental Authorization or has given rise to an obligation on the part of the
Corporation or the Subsidiaries to undertake or bear any material cost. The
Corporations has not received notice of any proceedings which are pending or, to
the knowledge of the Corporation, threatened, of the revocation or limitation of
any Governmental Authorization currently in effect or its renewal. Furthermore,
i) neither the Corporation nor the Subsidiaries knowledge, any third party
manufacturer of the Customer Offerings of the Corporation or the Subsidiaries,
is in receipt of notice of, or is known by the Corporation to be subject to any
written, adverse inspection, finding of deficiency, finding of non-compliance,
regulatory or warning letter, safety alert, mandatory or voluntary recall,
investigation, penalty for corrective or remedial action or other compliance or
enforcement action, in each case relating to the Customer Offerings of the
Corporation or the Subsidiaries or to the facilities in which such Customer
Offerings are developed, manufactured, assembled, packaged or handled, by any
applicable Governmental Authorities. There are no pending, or to the
Corporation’s knowledge, threatened civil, criminal or administrative actions,
suits, demands, claims, hearings, investigations, demand letters, proceedings,
complaints or requests for information by any Governmental Authorities related
to the Corporation or the Subsidiaries or related to their Customer
Offerings or, to the knowledge of the Corporation, any third party
manufacturer, in each case relating to the Customer Offerings or to the
facilities in which such products are developed, manufactured, assembled,
packaged or handled which would have a Material Adverse Effect. There is no act,
omission, event, or circumstance of which the Corporation has knowledge that
would reasonably be expected to give rise to any such action, suit, demand,
claim, hearing, investigation, demand letter, proceeding, complaint, or request
for information or any such liability; ii) neither the Corporation nor the
Subsidiaries has made any false statements on, or omissions from, any
applications, approvals, reports and other submissions to any applicable
Governmental Authorities or in or from any other records and documentation
prepared or maintained to comply with the requirements of any Governmental
Authorities relating to the Customer Offerings of the Corporation or the
Subsidiaries. There has not been any material violation of any Law or regulation
by the Corporation or the Subsidiaries in their prior product development
efforts, submissions or reports to any Governmental Authorities that would
reasonably be expected to require investigation, corrective action or
enforcement action; iii) except as set forth in Schedule 4.30, neither the
Corporation nor the Subsidiaries has received any written notice pertaining to
the Customer Offerings of the Corporation or the Subsidiaries that has resulted
or is likely, either individually or in the aggregate, to result in a material
claim, demand, complaint or proceeding; iv) the Corporation and the Subsidiaries
have completed and timely filed annual or other reports required by applicable
Governmental Authorities in order to maintain the Product Registrations and
compliance with all Laws and regulations in all material respects.

     

    


    
      
        
          
          

        

        
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              4.31  

            	
              Restrictive
      Covenants

            


    

     

    Other
than disclosed in Schedule 4.31,
neither the Corporation nor any of the Subsidiaries is a party to or
bound or affected by any Contract:

     

     

    
      	
              (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 the
Software.

            


    

     

    


    
      
        
          
          

        

        
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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 IP
Registrations;

            


    

     

     

    
      	
              (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 other
Person;

            


    

     

    


    
      
        
          
          

        

        
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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 minimal
charge.

            


    

     

     

    
      	
              (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

            


    

     

    The
Corporation and the Subsidiaries do not own or have any interest as legal and
beneficial owner of any 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 Property
Leases.

            


    

     

     

    
      	
              (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 Property
Leases.

            


    

     

    


    
      
        
          
          

        

        
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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

            


    

     

    Except as
disclosed in Schedule
4.35:

     

     

    
      	
              (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 Environmental
Approval.

            


    

     

     

    
      	
              (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 Environmental
Law.

            


    

     

     

    
      	
              (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 the
Subsidiaries.

            


    

     

     

    
      	
              (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 such
Employee.

            


    

     

     

    
      	
              (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 4.36
      contains 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 any
employees.

            


    

     

     

    
      	
              (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 Benefit
Plans.

            


    

     

     

    
      	
              (b)  

            	
              No
      Pension Plan has been put in place, is maintained or is administered by
      the Corporation or any of the
Subsidiaries.

            


    

     

     

    
      	
              (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 or
termination.

            


    

     

     

    
      	
              (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 relating
thereto.

            


    

     

     

    
      	
              4.39  

            	
              Personal
      Information

            


    

     

    Except as
disclosed in Schedule
4.39, all required consents to the collection, use or disclosure of
Personal Information in connection with the conduct of the Corporation’s and
Subsidiaries’ businesses (including disclosure to Affiliates of the Corporation
or of any of the Subsidiaries) have been obtained.

     

    


    
      
        
          
          

        

        
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              4.40  

            	
              Insurance

            


    

     

    Each of
the Corporation and the Subsidiaries maintains such policies of insurance,
issued by responsible insurers, as are appropriate to its operations, property
and assets, in such amounts and against such risks to its knowledge as are
customarily carried and insured against by owners of comparable businesses,
properties and assets. All such policies of insurance are in full force and
effect as against the Corporation and its Subsidiaries and neither the
Corporation nor any of the Subsidiaries has received notice of any or is in
default, as to the payment of premiums or otherwise, under the terms of any such
policy. Schedule 4.40 sets
forth (i) a complete list of all policies of insurance which the Corporation or
any of the Subsidiaries maintains and the particulars of such policies,
including the name of the insurer, the risk insured against, the amount of
coverage and the amount of any deductible and a summary of all claims under each
such policy for the past five years; (ii) details of any self-insurance
arrangements by or affecting the Corporation and the Subsidiaries, including any
reserves established thereunder; and (iii) details of any insurance coverage
provided to third parties and details of the policies under which such coverage
is provided.

     

     

    
      	
              4.41  

            	
              Contracts

            


    

     

    Schedule 4.41 sets forth a
complete list of the Contracts. The Contracts listed in Schedule 4.41 are all in
full force and effect, without amendments, and the Corporation has not received
notice of, nor are there any outstanding defaults under any such Contract on the
part of the Corporation or of any of the Subsidiaries or, to the knowledge of the
Corporation, on the part of any other party to such Contracts.

     

     

    
      	
              4.42  

            	
              Litigation

            


    

     

    Except as
disclosed in Schedule
4.42 the Corporation has not received notice of any Claims,
investigations or other proceedings, including appeals and applications for
review, in progress, or, to the knowledge of the Corporation, pending or
threatened against or relating to the Corporation or the Subsidiaries before any
Governmental Authority, and the Corporation has no knowledge of any existing
ground on which any such action, suit, litigation or proceeding might be
commenced with any reasonable likelihood of success. Except as disclosed in
Schedule 4.42, there
is no judgment, decree, injunction, rule or Order of any Governmental Authority
or arbitrator outstanding against the Corporation or any of the Subsidiaries.
Neither the Corporation nor any of the Subsidiaries has undergone during the
last three (3) years, or is currently undergoing, any audit, review, inspection,
investigation, survey or examination of records by a Governmental Authority
relating to the business of the Corporation or any of the
Subsidiaries.

     

    


    
      
        
          
          

        

        
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              4.43  

            	
              Tax
      Matters

            


    

     

    Except as
specifically disclosed in Schedule
4.43,

     

     

    
      	
              (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 Balance
Sheet.

            


    

     

     

    
      	
              (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 related
document.

            


    

     

    


    
      
        
          
          

        

        
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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.

            


    

     

     

    The
Corporation and all of the Subsidiaries are not and do not have any knowledge
that they will become liable for any invalid, late or excess designations under
the investment tax credit or the scientific research and experimental
development tax credit provisions of the Income Tax Act (Canada) or
equivalent provision of the Tax legislation of any province or any other
jurisdiction.

     

     

    In
addition, all Claims regarding scientific research and experimental development
were made following eligible or qualified scientific research and experimental
development expenditures expended to carry out eligible or qualified scientific
research and experimental development activities within the meaning of the Income Tax Act (Canada) or
equivalent provision of the Tax legislation of any province or any other
jurisdiction. All Tax Returns for the years in which scientific research and
experimental development credits were claimed have been correctly filed, in
compliance in all material respects with all legislative, regulatory or
administrative rules. All forms required to obtain the refundable scientific
research and experimental development credit s or any other requirements of the
legislation, regulation or administrative rules have been correctly filed or
complied with in all material respects.

     

     

    
      	
              (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

            


    

     

    All Books
and Records have been delivered or made available to the Purchaser. Such Books
and Records fairly and correctly set out and disclose in all material respects
the financial position of the Corporation and the Subsidiaries and all material
financial transactions relating to each of their businesses has been accurately
recorded in such Books and Records. Books and Records stored on computer-related
or other electronic media are appropriately organized and indexed and no data
conversions, translations or technology upgrades are required before such data
can be accessed, read, searched and used by the Corporation’s and the
Subsidiaries’ current Information Technology.

     

     

    
      	
              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 and
accurate.

            


    

     

     

    
      	
              4.46  

            	
              Trade
      Allowances

            


    

     

    Except
for the Corporation’s standard trade terms and discounting policies which have
been provided to the Purchaser, as disclosed in Schedule 4.46, no
customers of the Corporation or of any of the Subsidiaries are entitled to, or
customarily receive, discounts, allowances, rebates, credits, preferential
terms, or similar reductions in price or other trade terms arising from any
Contract with or concessions granted to any customer.

     

     

    
      	
              4.47  

            	
              Bank
      Accounts, etc.

            


    

     

    Schedule 4.47 sets
forth a complete list of all financial institutions in which the Corporation or
any of the Subsidiaries maintains any depository account, trust account or
safety deposit box and the names of all Persons authorized to draw on or who
have access to such accounts or safety deposit boxes.

     

     

    
      	
              4.48  

            	
              Powers
      of Attorney

            


    

     

    Schedule 4.48 sets out a
complete list of every outstanding power of attorney granted by the Corporation
or any of the Subsidiaries and the names of all Persons who have been given the
authority to act on behalf of any of them. The Purchaser has been provided with
copies of all outstanding powers of attorney granted by the Corporation or any
of the Subsidiaries.

     

    


    
      
        
          
          

        

        
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              4.49  

            	
              No
      Bankruptcy/Insolvency

            


    

     

    None of
the Corporation nor any of the Subsidiaries is insolvent, has committed an act
of bankruptcy, has proposed a compromise or arrangement to its creditors
generally, has had any petition for a receiving order in bankruptcy filed
against it, has taken any proceeding with respect to a compromise or
arrangement, has taken any proceeding to have itself declared bankrupt or
wound-up, has taken any proceeding to have a receiver appointed on any part of
its assets, has had any encumbrance registered on any of its property, nor has
it had any execution or distress become enforceable or become levied upon any of
its property.

     

     

    
      	
              4.50  

            	
              No
      Broker

            


    

     

    Except as
set out on Schedule 4.50,
there are no other brokerage commission, finder’s fee or other like payment
relating to the transactions contemplated in this Agreement which will be paid
by the Vendors and no claim to such effect will be held against the Purchaser,
the Corporation or any of the Subsidiaries.

     

     

    
      	
              4.51  

            	
              Note
      1

            


    

     

     

    
      	
              4.52  

            	
              Note
      1

            


    

     

     

    
      	
              4.53  

            	
              Full
      Disclosure

            


    

     

    This
Agreement does not (i) contain any untrue statement of a material fact in
respect of the Vendors, the affairs, operations or condition of the Corporation
or the Subsidiaries, or (ii) omit any statement of a material fact known to
the Corporation or the Vendors, as applicable, necessary in order to make the
statements in respect of the Vendors or the affairs, operations or condition of
the Corporation or the Subsidiaries contained herein or therein not misleading.
There is no material fact known to the Corporation or the Vendors (as
applicable) which is reasonably likely to materially and adversely affect the
affairs, operations, condition or prospects of the Corporation or the
Subsidiaries which has not been set forth in this Agreement.

     

     

    ARTICLE 5 

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The
Purchaser represents and warrants to the Vendors the matters set out
below:

     

     

    
      	
              5.1  

            	
              Status
      of the Purchaser

            


    

     

    The
Purchaser is a corporation existing under the laws of Canada.

     

    


     

    


     

    
      	
              Note
      1:

            	
              Contains
      confidential employee related information along with Vendors’ confidential
      information.

            


    

     

    


    
      
        
          
          

        

        
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                5.2  

              	
                Due
      Authorization

              


      

    

     

    The
Purchaser has all necessary corporate power, authority and capacity to enter
into this Agreement and each other agreement to be entered into under the terms
of this Agreement and to carry out its obligations thereunder. The execution and
delivery of this Agreement and of each other agreement to be entered into under
the terms of this Agreement and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
of the Purchaser.

     

    
       

      
        	
                5.3  

              	
                Enforceability
      of Obligations

              


      

    

     

    This
Agreement constitutes, and each other agreement to be executed by the Purchaser
in connection with the Closing will constitute, a valid and binding obligation
of the Purchaser enforceable against it in accordance with its terms, subject,
however, to limitations with regards to enforcement imposed by Law in connection
with bankruptcy or similar proceedings and to the extent that equitable remedies
such as specific performance and injunction are in the discretion of the court
from which they are sought.

     

     

    
      	
              5.4  

            	
              Absence
      of Conflicts

            


    

     

    The
Purchaser is not a party to, bound or affected by or subject to
any:

     

     

    
      	
              (a)  

            	
              indenture,
      mortgage, lease, agreement, obligation or
  instrument;

            


    

     

     

    
      	
              (b)  

            	
              provision
      of its charter or by-law; or

            


    

     

     

    
      	
              (c)  

            	
              Laws
      or Governmental Authorizations;

            


    

     

    that
would be violated, breached by, or under which default would occur or an
Encumbrance would be created as a result
of the execution and delivery of, or the performance of obligations under, this
Agreement or any other agreement to be entered into under the terms of this
Agreement.

     

     

    
      	
              5.5  

            	
              Regulatory
      Approvals

            


    

     

    No
approval, Order, consent of or filing with any Governmental Authority is
required on the part of the Purchaser, in connection with the execution,
delivery and performance of this Agreement or any other documents and agreements
to be delivered under this Agreement or the performance of the Purchaser’s
obligations under this Agreement or any other documents and agreements to be
delivered under this Agreement.

     

     

    
      	
              5.6  

            	
              No
      Broker

            


    

     

    The
Purchaser has carried on all negotiations relating to this Agreement and the
transactions contemplated in this Agreement directly and without the
intervention on its behalf of any other party in such manner as to give rise to
any valid claim for a brokerage commission, finder’s fee or other like
payment.

     

    


    
      
        
          
          

        

        
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              5.7  

            	
              Securities
      Laws

            


    

     

     

    The
Purchaser is an “accredited investor” as defined under Section 1.1 of National Instrument 45-106
– Prospectus and
Registration Exemptions and is purchasing the Purchased Shares as
principal.

     

     

    ARTICLE 6 

    NON-WAIVER;
SURVIVAL

     

    
      	
              6.1  

            	
              Non-Waiver

            


    

     

     

    No
investigations made by or on behalf of the Purchaser at any time shall have the
effect of waiving, diminishing the scope or otherwise affecting any
representation or warranty made by the Vendors in or pursuant to this Agreement.
No waiver of any condition or other provisions, in whole or in part, shall
constitute a waiver of any other condition or provision (whether or not similar)
nor shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

     

     

    
      	
              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 taxation
year;

            


    

     

     

    
      	
              (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   

    PURCHASER’S
CONDITIONS PRECEDENT

     

    The
obligation of the Purchaser to complete the purchase of the Purchased Shares
under this Agreement is subject to the satisfaction of, or compliance with, at
or before the Closing Time, each of the following conditions precedent (each of
which is acknowledged to be inserted for the exclusive benefit of the Purchaser
and may be waived by it in whole or in part).

     

     

    
      	
              7.1  

            	
              Truth
      and Accuracy of Representations of Vendors at the Closing
    Time

            


    

     

    All of
the representations and warranties of the Vendors made in or pursuant to this
Agreement shall be true and correct as at the Closing Time.

     

     

    
      	
              7.2  

            	
              Performance
      of Obligations

            


    

     

    The
Vendors shall have performed or complied with, in all respects, all its
obligations and covenants under this Agreement.

     

     

    
      	
              7.3  

            	
              Receipt
      of Closing Documentation

            


    

     

    All
documentation relating to the due authorization and completion of the sale and
purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by the Vendors of their obligations under this Agreement, shall be satisfactory
to the Purchaser, acting reasonably, and the Purchaser shall have received
copies of all such documentation or other evidence as it may reasonably request
in order to establish the consummation of the transactions contemplated by this
Agreement and the taking of all corporate proceedings in connection with such
transactions in compliance with these conditions, in form (as to certification
and otherwise) and substance satisfactory to the Purchaser.

     

     

    
      	
              7.4  

            	
              Opinions
      of Counsel

            


    

     

    The
Purchaser shall have received usual legal opinions dated the Closing Date from
counsel for the Corporation and the Canadian Subsidiaries.

     

    


    
      
        
          
          

        

        
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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

            


    

     

    There
shall be no Order issued delaying, restricting or preventing, and no pending or
threatened Claim, or judicial or administrative proceeding, or investigation
against any Party by any Person, for the purpose of enjoining, delaying,
restricting or preventing, the consummation of the transactions contemplated by
this Agreement or otherwise claiming that this Agreement or the consummation of
such transactions is improper or would give rise to proceedings under any
Laws.

     

     

    
      	
              7.7  

            	
              Encumbrances
      and Guarantees

            


    

     

    The
Purchaser shall have received evidence satisfactory to it that:

     

     

    
      	
              (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

            


    

     

    The
shareholders of the Corporation as required by the Purchaser, other than
VenGrowth, VenGrowth II and BDC, shall have executed and delivered a
non-competition, non-solicitation and confidentiality agreement substantially in
the form attached as Schedule 7.8.

     

     

    
      	
              7.9  

            	
              Releases

            


    

     

    The
Vendors shall have released any Employees from any confidentiality or
non-competition agreements or non-solicitation covenants with the
Vendors.

     

     

    
      	
              7.10  

            	
              Key
      Employees

            


    

     

    Each of
Notes 3 and 5 shall have
executed employment contracts with the Corporation or any of the Subsidiaries in
substantially the form attached as Schedule
7.10.

     

     

    
      	
              7.11  

            	
              No
      Material Adverse Effect

            


    

     

    There
shall have been no Material Adverse Effect since the date of the Preliminary
Offer.

     

     

    
      	
              7.12  

            	
              Directors
      and Officers of the Corporation and of the
  Subsidiaries

            


    

     

    There
shall have been delivered to the Purchaser on or before the Closing Time the
resignations of all individuals who are currently directors or officers of the
Corporation or of any of the Subsidiaries and duly executed comprehensive
releases from each such individual and from the Vendors of all their claims
respectively, against the Corporation and the Subsidiaries except for any claims
for current unpaid remuneration.

     

     

    
      	
              7.13  

            	
              Good
      Standing

            


    

     

    The
Vendors will deliver to the Purchaser certificates of status or good standing,
as the case may be, with respect to the Corporation and each of the
Subsidiaries.

     

     

    
      	
              7.14  

            	
              Stock
      Option Plan

            


    

     

    No later
than on Closing Time, the Vendors shall have, at their own expense, terminated
the Stock Option Plan and all Options granted thereunder, and provide evidence
of cancellation at Closing, satisfactory to the Purchaser.

     

    


     

    
      	
              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 related
document.

            


    

     

    


    
      
        
          
          

        

        
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    ARTICLE 8    

    VENDORS’
CONDITIONS PRECEDENT

     

    The
obligations of the Vendors to complete the sale of the Purchased Shares under
this Agreement is subject to the satisfaction of or compliance with, at or
before the Closing Time, each of the following conditions precedent (each of
which is acknowledged to be inserted for the exclusive benefit of the Vendors
and may be waived by it in whole or in part).

     

     

    
      	
              8.1  

            	
              Truth
      and Accuracy of Representations of the Purchaser at Closing
      Time

            


    

     

    All of
the representations and warranties of the Purchaser made in or pursuant to this
Agreement shall be true and correct as at the Closing Time and with the same
effect as if made at and as of the Closing Time.

     

     

    
      	
              8.2  

            	
              Directors
      and Officers of the Corporation and of the
  Subsidiaries

            


    

     

    There
shall have been delivered on or before the Closing Time duly executed releases
from the Corporation, the Subsidiaries and the Purchaser in favour of each of
such resigning officer and director in section 7.12 of all their claims
respectively, against such resigning officer and director, excluding however any
claim under the present agreement.

     

     

    
      	
              8.3  

            	
              No
      Proceedings

            


    

     

    There
shall be no Order issued delaying, restricting or preventing, and no pending or
threatened Claim, or judicial or administrative proceeding, or investigation
against any Party by any Person, for the purpose of enjoining, delaying,
restricting or preventing, the consummation of the transactions contemplated by
this Agreement or otherwise claiming that this Agreement or the consummation of
such transactions is improper or would give rise to proceedings under any
Laws.

     

     

    
      	
              8.4  

            	
              Escrow
      Agreement

            


    

     

    The
Purchaser, the Corporation and the Escrow Agent shall have executed and
delivered the Escrow Agreement, in a form satisfactory to the Vendors acting
reasonably.

     

     

    
      	
              8.5  

            	
              Performance
      of Obligations

            


    

     

    The
Purchaser shall have performed or complied with, in all respects, all its
obligations and covenants under this Agreement and the Vendors shall have
received a certificate from a senior officer of the Purchaser confirming such
performance or compliance, as the case may be.

     

     

    
      
        
          
          

        

        
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    ARTICLE 9 

    OTHER
COVENANTS OF THE PARTIES

     

     

    
      	
              9.1  

            	
              Tax
      Returns

            


    

     

    The
Purchaser may cause the Corporation and the Subsidiaries to make the election
referred to in subsection 256(9) of the Income Tax Act (Canada), and
comparable provisions of applicable provincial, territorial or other
legislation, and to file such election(s) for the Corporation’s and the
Subsidiaries’ taxation year(s) ending immediately before the Closing Time. The
Vendors and the Purchaser shall cooperate fully with each other and make
available to each other in a timely fashion such data and other information as
may reasonably be required for the preparation of any Tax Return of the
Corporation or of any of the Subsidiaries for a period ending on, prior to or
including the Closing Date and shall preserve such data and other information
until the expiration of any applicable limitation period under any applicable
law with respect to Taxes.

     

     

    ARTICLE 10      

    INDEMNIFICATION

     

     

    
      	
              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 applicable
Vendor.

            


    

     

     

    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 related
document.

            


    

     

    


    
      
        
          
          

        

        
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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 related
document.

            


    

     

    
      	
              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 pursuant
thereto.

            


    

     

    
      	
              10.5  

            	
              Tax
      Status of Indemnification Payments

            


    

     

    Any payment made by the Vendors pursuant to this ARTICLE
10 shall constitute a reduction of
the Purchase Price and any payment made by the Purchaser pursuant to this
ARTICLE 10 shall constitute an increase in the Purchase Price.
In either case, each of the Vendors and the Purchaser shall, within a reasonable
time of payment and receipt of such payment, as applicable, and in any event
within two months of such payment, request all amendments to its current or past
Tax Returns as may be necessary to reflect the foregoing.

     

     

    ARTICLE 11

    GENERAL

     

    
      	
              11.1  

            	
              Arbitration

            


    

     

    Except
for disputes contemplated by Section 3.5, all disputes over the validity or the
amount of Claims made pursuant to ARTICLE 10 for which the parties cannot
mutually agree upon a settlement thereof within thirty (30) days after the
commencement thereof, despite both parties thereto acting in good faith to reach
a settlement thereof and all other disputes, disagreements, controversies,
questions or claims arising out of or relating to this Agreement, including,
without limitation, with respect to its formation, execution, validity,
application, interpretation, performance, breach, termination or enforcement
(“Disputes”) shall be
determined by arbitration before a single arbitrator mutually agreed to by the
Parties to the Dispute or otherwise in accordance with the Arbitration Act, 1991
(Ontario) (the "Arbitration
Act"), provided that:

    


    
      
        
          
          

        

        
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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

            


    

     

    Any
public notices, press releases, and any other publicity concerning the
transactions contemplated by this Agreement may only be issued by the Purchaser,
as it may deem appropriate, and the Purchaser shall inform the other Parties
accordingly, unless such disclosure is required to meet timely disclosure
obligations of any Party under Laws, stock exchange rules or an order of a court
of competent jurisdiction. Notwithstanding the foregoing, Vengrowth and
Vengrowth II will also be permitted to describe the transaction in their
marketing materials provided that they use only information publicly disclosed
by the Purchaser.

     

     

    
      	
              11.3  

            	
              Expenses

            


    

     

    Except as
otherwise provided in this Agreement, each Party shall pay all costs and
expenses (including the fees and disbursements of legal counsel and other
advisers) it incurs in connection with the negotiation, preparation and
execution of this Agreement and the transactions contemplated by this
Agreement.

     

    


    
      
        
          
          

        

        
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              11.4  

            	
              Notices

            


    

     

    Any
notice, consent or approval required or permitted to be given in connection with
this Agreement (in this Section referred to as a “Notice”) shall be in writing
and shall be sufficiently given if delivered (whether in person, by courier
service or other personal method of delivery), or if transmitted by facsimile or
e-mail:

     

     

    
      	
              (a)  

            	
              in
      the case of a Notice to the Vendors
at:

            


    

     

    Note
4

     

     

    
      	
              (b)  

            	
              in
      the case of a Notice to the Vendors Representative
  at:

            


    

     

    Note
4

     

     

    
      	
              (c)  

            	
              in
      the case of a Notice to the Purchaser
at:

            


    

     

    Note
4

     

    Any
Notice delivered or transmitted to a Party as provided above shall be deemed to
have been given and received on the day it is delivered or transmitted, provided
that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local
time in the place of delivery or receipt. However, if the Notice is delivered or
transmitted after 5:00 p.m. local time or if such day is not a Business Day then
the Notice shall be deemed to have been given and received on the next Business
Day.

     

    Any Party
may, from time to time, change its address by giving Notice to the other Parties
in accordance with the provisions of this Section.

     

     

    
      	
              11.5  

            	
              Assignment

            


    

     

    The
Purchaser shall be entitled to assign all of its rights and obligations under
this Agreement to any Affiliate of the Purchaser provided however that the
Purchaser remains jointly and severally liable for all of its obligations under
this Agreement to the other parties hereto. Except for such permitted
assignment, no party may assign this Agreement or any rights or obligations
under this Agreement without the prior written consent of the other
Party.

     

     

    
      	
              11.6  

            	
              Enurement

            


    

     

    This
Agreement enures to the benefit of and is binding upon the Parties and their
respective successors (including any successor by reason of amalgamation of any
Party) and permitted assigns.

     

    


     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    


    
      
        
          
          

        

        
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              11.7  

            	
              Amendment

            


    

     

    No
amendment, supplement, modification or waiver or termination of this Agreement
and, unless otherwise specified, no consent or approval by any Party, is binding
unless executed in writing by the Party to be bound thereby.

     

     

    
      	
              11.8  

            	
              Further
      Assurances

            


    

     

    The
Parties shall, with reasonable diligence, do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, including, without limitation, the execution of
any assignment agreement in order to assign in favour of the Corporation, any
Intellectual Property rights used by the Corporation or any of the Subsidiaries
that could be owned by any Employee, any shareholder of the Corporation or any
consultant hired by any of the Corporation or the Subsidiaries, and each Party
shall provide such further documents or instruments required by any other Party
as may be reasonably necessary or desirable to effect the purpose of this
Agreement and carry out its provisions, whether before or after the
Closing.

     

     

    
      	
              11.9  

            	
              Execution
      and Delivery

            


    

     

    This
Agreement may be executed by the Parties in counterparts and may be executed and
delivered by facsimile and all such counterparts and facsimiles together
constitute one and the same agreement.

     

    [SIGNATURES
APPEAR ON NEXT PAGE]

     

    


    
      
        
          
          

        

        
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    IN
WITNESS OF WHICH the Parties have executed this Agreement.

     

    
      	
               

               

               

               

            	
               

            	
               

               

               

            
	
              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.

            


    

     

     

    
      
        
        

      

      
        - 67
-

        
          

        

      

      
        Table of Contents

      

    

     

    Schedule
1.1

     

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

    
      	
              Note
      7:

            	
              Already
      disclosed publicly in another format in order to avoid
      confusion.

            


    

     

    


     

    


    
      
        
          
          

        

        
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    Schedule
3.2

    Allocation
of Purchase Price

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
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-

          
            

          

        

        
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      Schedule
4.8

    

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 70
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.11

     

     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

     

    
      
        
          
          

        

        
          - 71
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.13 and 4.14

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 72
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.15

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 73
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.16

    


     

    
      	
              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 related
document.

            


    

     

     

    
      
        
          
          

        

        
          - 74
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.17

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 75
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.19

     

     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

    
      	
              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.

            


    

     

     

    
      
        
          
          

        

        
          - 76
-

          
            

          

        

        
          Table of Contents

        

      

    

    
    

     

    Schedule
4.20

    


    
      None

    

     

    


    
      
        
          
          

        

        
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-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.21

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

    


    
      
        
          
          

        

        
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-

          
            

          

        

        
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    Schedule
4.23

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              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.

            


    

     

     

    
      
        
          
          

        

        
          - 79
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.25

    


     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 80
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    
      Schedule
4.30

    

    


     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

     

    
      
        
          
          

        

        
          - 81
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    Schedule
4.31

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 82
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.32 (m, n, o, p, q)

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 83
-

          
            

          

        

        
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      Schedule
4.36

    

    


     

    
      	
              Note
      2:

            	
              Contains
      confidential employee related
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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 84
-

          
            

          

        

        
          Table of Contents

        

      

    

     

    Schedule
4.40

    


     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 85
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.41

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 86
-

          
            

          

        

        
          Table of Contents

        

      

    

     

    Schedule
4.42

    


    
      None

    

    
 

    
      
        
          
          

        

        
          - 87
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    Schedule
4.43

    


     

    
      	
              Note
      4:

            	
              Contains
      privilege information.

            


    

     

    
      	
              Note
      5:

            	
              Contains
      unnecessary information which is not affecting the overall understanding
      of the transaction and the related
document.

            


    

     

     

    
      
        
          
          

        

        
          - 88
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    
      Schedule
4.46

    

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 89
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    Schedule
4.47

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 90
-

          
            

          

        

        
          Table of Contents

        

      

    

     

    
      Schedule
4.48

    

    


    
      None

    

    
 

    
      
        
          
          

        

        
          - 91
-

          
            

          

        

        
          Table of Contents

        

      

    

    


    
    

    Schedule
4.50

     

     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
          - 92
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          Table of Contents

        

      

    

    


    
    

    Schedule
4.52

    


     

    
      	
              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 related
document.

            


    

     

    


    
      
        
          
          

        

        
          - 93
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          Table of Contents

        

      

    

    


    Schedule
7.8

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

    
       

      
        
          
            
            

          

          
            - 94
-

            
              

            

          

          
            Table of Contents

          

        

      

       

    

    
    

    
      Schedule
7.10

    

    


     

    
      	
              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 related
document.

            


    

     

    
      	
              Note
      6:

            	
              Contains
      Vendors’ confidential information that could be seriously prejudicial to
      their interests.

            


    

     

     

    
      
        
          
          

        

        
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