AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 2000
EXFO ELECTRO-OPTICAL ENGINEERING INC. /
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CANADA 3825 98-0131231
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
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465 GODIN AVENUE
VANIER, QUEBEC G1M 3G7, CANADA
(418) 683-0211
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CT CORPORATION SYSTEM
111 EIGHTH AVENUE
NEW YORK, NEW YORK 10011, U.S.A.
(212) 894-8940
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
With copies to:
EDWIN S. MAYNARD, ESQ. CHRISTOPHER W. MORGAN, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1285 AVENUE OF THE AMERICAS SUITE 1820, NORTH TOWER
NEW YORK, NEW YORK 10019-6064, U.S.A. P.O. BOX 189, ROYAL BANK PLAZA
(212) 373-3000 TORONTO, ONTARIO M5J 2J4, CANADA
(416) 777-4700
ROBERT PARE, ESQ. NORMAN M. STEINBERG, ESQ.
FASKEN MARTINEAU DUMOULIN LLP OGILVY RENAULT
800 VICTORIA SQUARE 1981 MCGILL COLLEGE AVENUE
SUITE 3400, P.O. BOX 242 SUITE 1110
MONTREAL, QUEBEC H4Z 1E9, CANADA MONTREAL, QUEBEC H3A 3C1, CANADA
(514) 397-7400 (514) 847-4747
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO OFFERING PRICE AGGREGATE OFFERING
REGISTERED BE REGISTERED(1) PER SHARE(2) PRICE(2)
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Subordinate voting shares, without par
value..................................... 6,900,000 shares US$22.00 US$151,800,000
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT OF
REGISTERED REGISTRATION FEE
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Subordinate voting shares, without par
value..................................... US$40,076
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PART I
INFORMATION REQUIRED TO BE
DELIVERED TO OFFEREES OR PURCHASERS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 9, 2000
P R O S P E C T U S
6,000,000 SHARES
EXFO LOGO
This is the initial public offering of EXFO Electro-Optical Engineering Inc. EXFO is selling 6,000,000 subordinate voting shares. The subordinate voting shares being sold represent 1.7% of the total outstanding voting power after the offering. The underwriters named in this prospectus are selling the subordinate voting shares in the United States and in each of the provinces of Canada.
We expect the public offering price to be between US$20.00 and US$22.00 per share. Currently, no public market exists for our shares. After pricing of this offering, we expect that the subordinate voting shares will be quoted on the Nasdaq National Market under the symbol "EXFO" and we intend to list the subordinate voting shares on The Toronto Stock Exchange.
PER SHARE TOTAL
Public offering price....................... US$ US$
Underwriting discount....................... US$ US$
Proceeds, before expenses, to EXFO.......... US$ US$
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The public offering price for the subordinate voting shares offered in the United States is payable in U.S. dollars and the public offering price for the subordinate voting shares offered in Canada is payable in Canadian dollars. The U.S. dollar amount is the equivalent of the Canadian price of the subordinate voting shares based on the prevailing U.S. -- Canadian dollar exchange rate as of the date of this prospectus.
The underwriters may also purchase up to an additional 900,000 subordinate voting shares from EXFO, at the public offering price, less the underwriting commission, within 30 days from the date of this prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The shares will be ready for delivery on or about , 2000.
------------------------------
MERRILL LYNCH & CO.
RBC DOMINION SECURITIES
WIT SOUNDVIEW
CIBC WORLD MARKETS
------------------------------
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The date of this prospectus is , 2000.
Description of the artwork
Inside front cover
EXFO logo
CAPTION:
EXFO is a leading designer, manufacturer and marketer of fiber-optic test, measurement and monitoring instruments for the telecommunications industry.
Picture of an engineer using test instruments in our research and development department
Picture of an operating technician using test instruments in the field
Picture of a test instrument
CAPTION:
Our success has been largely due to our exclusive focus on fiber optic test, measurement and monitoring instruments.
Gatefold
EXFO logo
CAPTION:
Fiber-optic test, measurement and monitoring equipment is mainly used by optical network carriers, manufacturers, and research and development laboratories to measure the physical characteristics of optical fiber, optical components, value-added optical modules and optical networking systems.
Artistic photo montage illustrating the growth of digital data
Artistic photo montage illustrating the growth of bandwidth intensive applications
Artistic photo montage illustrating the expansion of the Internet
CAPTION:
Global demand for optical communications equipment capacity has been growing due to the popularity of the internet and other bandwidth intensive applications.
10 pictures of test instruments with various uses with the following captions:
1 - Test instruments for conventional network installation and maintenance
2 - Remote fiber test system for network monitoring
3 - Automated test systems for production of DWDM component
4 - Test instruments for DWDM-based network installation and maintenance
5 - Automated environmental test system for DWDM component production
6 - Test instruments for use in developing and manufacturing optical fiber
7 - Test instruments for use in developing and manufacturing optical components
TABLE OF CONTENTS
Prospectus Summary.......................................... 1 Risk Factors................................................ 6 Special Note Regarding Forward-Looking Statements........... 16 Enforceability of Civil Liabilities......................... 16 Exchange Rate Information................................... 16 Use of Proceeds............................................. 17 Dividend Policy............................................. 18 Capitalization.............................................. 19 Dilution.................................................... 21 Selected Consolidated Financial Information................. 22 Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 24 Corporate Information....................................... 34 Business.................................................... 36 Management.................................................. 50 Transactions with Related Parties........................... 56 Principal Shareholders...................................... 59 Description of Share Capital................................ 60 Transfer Agent and Registrar................................ 64 Shares Eligible for Future Sale............................. 64 Tax Considerations.......................................... 66 Underwriting................................................ 72 Legal Matters............................................... 75 Experts..................................................... 75 Where You Can Find More Information......................... 76 Index to Our Consolidated Financial Statements.............. F-1 |
Our consolidated financial statements are reported in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in Canada, or Canadian GAAP. To the extent applicable to our consolidated financial statements included elsewhere in this prospectus, these principles conform in all material respects with accounting principles generally accepted in the United States, or U.S. GAAP, except as described in note 21 to our consolidated financial statements.
All dollar amounts in this prospectus are expressed in U.S. dollars, except where otherwise indicated. References to "$" or "US$" are to U.S. dollars and references to "C$" are to Canadian dollars. This prospectus contains a translation of some Canadian dollar amounts into U.S. dollars solely for your convenience. See "Exchange Rate Information."
PROSPECTUS SUMMARY
The summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all the information that you should consider before buying shares in this offering. You should read the entire prospectus carefully, including our consolidated financial statements and the related notes included elsewhere in this prospectus.
EXFO
We are a leading designer, manufacturer and marketer of fiber-optic test, measurement and monitoring instruments for the telecommunications industry. We believe that we are the largest manufacturer of test, measurement and monitoring instruments that is exclusively dedicated to fiber optics. Unlike traditional electrical transmission systems, which transmit electrical signals along copper wires, fiber-optic transmission systems use pulses of light along glass or plastic fiber, often referred to as optical fiber. When light travels along optical fiber and through the optical equipment that link optical fibers together, it is subject to unwanted effects such as reflection, attenuation, noise and various types of dispersion, all of which degrade signal quality and reduce transmission performance. Fiber-optic test, measurement and monitoring equipment is critical for measuring these effects and for helping communications carriers and manufacturers ensure network performance and reliability.
Demand for fiber-optic test, measurement and monitoring equipment has been driven by increased production and deployment of optical fiber and related equipment in order to meet the growing demand for telecommunications capacity. Ryan, Hankin & Kent, a leading telecom market research firm, forecasts that Internet traffic will increase from 350,000 terabytes, or trillions of bytes, per month at the end of 1999 to more than 15 million terabytes per month in 2003, representing a compound annual average growth rate of 156%.
Our customers use fiber-optic test, measurement and monitoring equipment mainly to:
- ensure the quality of networks as they are being deployed;
- diagnose and repair problems within an optical network;
- monitor the quality of an optical signal as it passes through a network;
- analyze fiber-optic components and equipment during production and assembly as well as quality control and conformity testing; and
- conduct sophisticated tests during the research and development of fiber-optic products.
We believe that we have positioned ourselves as the supplier offering the most extensive range of products in the fiber-optic test, measurement and monitoring industry. Our success has been largely based on our exclusive focus on fiber-optic test, measurement and monitoring instruments. We have developed optical technologies and advanced testing algorithms that we leverage across our various product lines. Our success is primarily due to:
- our development of a range of products based on a modular system design consisting of Windows-based platforms that can accommodate several data acquisition test modules;
- our high degree of technological innovation, as illustrated by our leading position in our industry in the development and commercialization of a number of new fiber-optic test and measurement products;
- the high quality of our products as a result of our comprehensive quality assurance program, which has been certified ISO 9001 since 1994, and our compliance with demanding industry standards; and
- our highly qualified and specialized internal customer support teams that offer pre-sales evaluation, installation, channel and customer training and post-sales support.
We develop products principally for two markets. Our Portable and Monitoring Division provides solutions primarily to telecommunications carriers, cable television companies, public utilities, private network operators, as well as third-party installers and equipment rental companies. Our Scientific Division, established in 1996, designs an extensive line of more sophisticated and higher performance instruments for manufacturers of optical fiber, optical components, value-added optical modules and optical networking systems. Our Scientific Division also designs products for research and development markets.
We intend to expand our leadership position in the fiber-optic test, measurement and monitoring industry and to increase our market share through the following initiatives:
- expand our technological leadership;
- invest in strategic sectors;
- leverage our modular design across our product lines;
- expand our sales and marketing efforts;
- reduce our delivery lead times; and
Our head office is located at 465 Godin Avenue, Vanier, Quebec, Canada, G1M 3G7 and our telephone number is (418) 683-0211. Our e-mail address is info@exfo.com and our Web site is www.exfo.com. Information on our Web site is not incorporated by reference in this prospectus. This prospectus contains trademarks and registered trademarks of EXFO and other companies.
THE OFFERING
Shares offered by this
prospectus...................... 6,000,000 subordinate voting shares
Shares to be outstanding after
this offering................... 6,709,605 subordinate voting shares
38,000,000 multiple voting shares
Total......................... 44,709,605 shares
Voting rights................... The subordinate voting shares will carry one
vote per share and the multiple voting shares
will carry ten votes per share. Subsequent to
the completion of this offering, the
outstanding multiple voting shares will
represent 98.3% of the voting power.
Conversion rights............... Each multiple voting share will be
convertible at any time at the holder's
option into one fully paid and non-assessable
subordinate voting share.
Undertaking in favor of holders
of subordinate voting shares.... The holders of subordinate voting shares will
benefit from protective provisions that give
them specified rights in the event of a
take-over bid for the multiple voting shares.
See "Description of Share Capital -- Equity
Shares -- Undertakings in Favor of Holders of
Subordinate Voting Shares."
Use of proceeds................. We intend to use the net proceeds of this
offering:
- to repay approximately $17.3 million
outstanding under promissory notes that
we plan to issue to some of our existing
shareholders as payment of dividends to
be declared prior to the closing of this
offering;
- to repay approximately $10.0 million of
our outstanding indebtedness; and
- for working capital and other general
corporate purposes, including potential
strategic investments and acquisitions.
Proposed Nasdaq National Market
symbol.......................... EXFO
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The total number of shares to be outstanding after this offering does not include:
- subordinate voting shares issuable upon the exchange of 800,000 preferred shares series 1 to be issued prior to the closing of this offering. Assuming a conversion price of $21.00 per share, the 800,000 preferred shares series 1 will be convertible into 25,766 subordinate voting shares at our option on November 30, 2000; and
- 4,470,961 subordinate voting shares reserved for future issuances under our stock option plan, including 581,280 subordinate voting shares to be issued upon the exercise of options to be granted prior to the closing of this offering at an exercise price equal to the initial public offering price.
Unless otherwise indicated, all information in this prospectus, including pro forma capitalization figures:
- assumes the underwriters have not exercised the over-allotment option granted by us to purchase up to 900,000 of our subordinate voting shares;
- gives effect to the exchange of all outstanding Class "A" shares into an aggregate of 38,000,000 multiple voting shares, which will occur prior to the closing of this offering;
- gives effect to the exchange of all outstanding Class "F" shares into an aggregate of 709,605 subordinate voting shares, which will occur prior to the closing of this offering; and
- gives effect to the exchange of all outstanding Class "G" shares into an aggregate of 800,000 preferred shares series 1, which will occur prior to the closing of this offering.
SUMMARY CONSOLIDATED FINANCIAL DATA
You should read the following summary consolidated financial data in conjunction with the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.
The consolidated statements of earnings data for each of the three years ended August 31, 1997, 1998 and 1999 and the consolidated balance sheets data as at August 31, 1998 and 1999 are derived from our consolidated financial statements that have been audited by PricewaterhouseCoopers LLP, independent auditors, that are included elsewhere in this prospectus. The consolidated statements of earnings data for the six months ended February 28, 1999 and February 29, 2000 and the consolidated balance sheet data as of February 29, 2000 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. These unaudited financial statements include, in the opinion of our management, all adjustments, consisting only of normally recurring adjustments, necessary to present fairly this unaudited financial information. The "Pro Forma As Adjusted" numbers in the table below reflect the issuance of 485,537 Class "F" shares to employees under outstanding subscription agreements, the share capital reorganization described under "Description of Share Capital", which will be effected prior to the closing of this offering, the declaration of a $17.6 million dividend, the sale of 6,000,000 subordinate voting shares offered by EXFO at an assumed initial public offering price of $21.00 per share and the application of the estimated net proceeds from this offering. See "Use of Proceeds."
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
--------------------------- ---------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
------- ------- ------- ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF EARNINGS DATA:
AMOUNTS UNDER CANADIAN GAAP
Sales....................................................... $24,475 $31,605 $42,166 $18,728 $29,111
Cost of sales............................................... 9,652 11,345 14,998 7,021 9,609
------- ------- ------- ------- -------
Gross margin................................................ 14,823 20,260 27,168 11,707 19,502
Operating expenses
Selling and administrative................................ 7,827 9,898 13,279 5,964 9,938
Net research and development.............................. 1,592 3,014 4,315 1,791 3,221
Amortization of capital and other assets.................. 479 657 898 422 611
------- ------- ------- ------- -------
Earnings from operations.................................... 4,925 6,691 8,676 3,530 5,732
Interest expense (income) -- net............................ 89 (40) (136) (46) (25)
Foreign exchange loss (gain)................................ 184 (126) 506 398 116
------- ------- ------- ------- -------
Earnings before income taxes and amortization of goodwill... 4,652 6,857 8,306 3,178 5,641
Income taxes................................................ 1,582 2,356 2,492 958 1,887
------- ------- ------- ------- -------
Earnings before amortization of goodwill.................... 3,070 4,501 5,814 2,220 3,754
Amortization of goodwill.................................... -- -- -- -- 42
------- ------- ------- ------- -------
Net earnings for the period................................. $ 3,070 $ 4,501 $ 5,814 $ 2,220 $ 3,712
======= ======= ======= ======= =======
Basic and fully diluted net earnings per share.............. $ 0.08 $ 0.12 $ 0.14 $ 0.05 $ 0.10
Basic weighted average number of shares used in per share
calculations.............................................. 38,000 38,000 38,001 38,000 38,425
AMOUNTS UNDER U.S. GAAP
Net earnings for the period................................. $ 3,356 $ 4,538 $ 5,901 $ 2,245 $ 3,526
Basic and diluted net earnings per share.................... $ 0.09 $ 0.12 $ 0.15 $ 0.05 $ 0.09
Basic weighted average number of shares used in per share
calculations.............................................. 38,000 38,000 38,001 38,000 38,425
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AS AT
FEBRUARY 29, 2000
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PRO FORMA AS
ACTUAL ADJUSTED
------- ------------
(IN THOUSANDS)
CONSOLIDATED BALANCE SHEETS DATA:
AMOUNTS UNDER CANADIAN GAAP
Cash and cash equivalents................................... $ 539 $ 89,494
Working capital............................................. 13,578 109,133
Total assets................................................ 37,072 129,427
Long-term debt (excluding current portion).................. 283 283
Shareholders' equity........................................ 19,048 118,003
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RISK FACTORS
Investing in our subordinate voting shares involves a high degree of risk. You should carefully consider the risks described below as well as all the other information in this prospectus, including our financial statements and related notes, before investing in our subordinate voting shares. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The trading price of our subordinate voting shares could decline due to any of these risks and you could lose all or part of your investment.
RISKS RELATED TO OUR INDUSTRY AND BUSINESS
IF WE ARE UNABLE TO ADAPT TO CURRENT AND FUTURE CHANGES IN TECHNOLOGY, OUR PRODUCTS MAY BECOME OBSOLETE.
Any failure by us to anticipate or respond to new technological developments and customer requirements could have a material adverse effect on our business, financial condition and results of operations. Moreover, the markets addressed by our current and planned products are rapidly evolving and are characterized by emerging standards and competing technological platforms. There can be no assurance that products destined by us for sale into these markets will adequately address the requirements dictated by evolving standards, or that we will be able to adapt our products to changes in technology. Accordingly, we may invest in products and technologies that never gain market acceptance. Such investments could have a material adverse effect on our business, financial condition and results of operations.
WE MUST CONTINUE TO OVERCOME SIGNIFICANT AND INCREASING COMPETITION IN OUR INDUSTRY IN ORDER TO CONTINUE OUR GROWTH AND PRODUCTIVITY.
The market for fiber-optic test, measurement and monitoring equipment is rapidly evolving and is marked by intense competition and technical innovations. We expect the pace of change to accelerate in the future. We also expect many new competitors to emerge as the market for fiber-optic test, measurement and monitoring equipment expands and evolves in response to technical innovations.
Some of our current and potential competitors are global electronic test and measurement manufacturers who complement their broad range of products with fiber-optic test, measurement and monitoring equipment. Competitors, such as Agilent Technologies Inc. and Wavetek Wandel & Golterman, have longer operating histories and significantly greater financial, technical and marketing resources. Consequently, these competitors are able to devote greater resources to the development, marketing, sale and support of their products. They are also better positioned than we are to acquire companies and new technologies that may displace our products or make them obsolete.
WE DEVOTE CONSIDERABLE TIME AND RESOURCES TO SECURING NEW CUSTOMERS AND IMPROVING SALES TO EXISTING CUSTOMERS. IF WE ARE UNSUCCESSFUL, OUR FUTURE OPERATING RESULTS MAY SUFFER.
The long sales cycle for our products may cause our sales and operating results to vary significantly from period to period. The period of time between our initial contact with a customer and the receipt of a purchase order may span a year or more. In addition, customers perform and require us to perform, extensive product evaluation and testing of new instruments before purchasing them. If we are unable to satisfy customer demands, considerable resources would have been expended without deriving corresponding sales.
OUR INTELLECTUAL PROPERTY AND PROPRIETARY TECHNOLOGY, WHICH INCLUDES NINE PATENTS AND FOURTEEN PATENT APPLICATIONS, ARE IMPORTANT TO THE CONTINUED SUCCESS OF OUR BUSINESS. OUR FAILURE TO PROTECT THIS PROPRIETARY TECHNOLOGY MAY SIGNIFICANTLY IMPAIR OUR COMPETITIVE POSITION.
Our success and ability to compete depend to a significant extent on our
proprietary technology, since that is how we attempt to keep others from using
the innovations that are central to our existing and future products. We
currently hold four U.S. and two Canadian issued patents, three foreign issued
patents and have six U.S. and eight Canadian patent applications pending. In
addition, we rely on a combination of copyright and trademark laws, trade
secrets, confidentiality procedures, contractual provisions and license
agreements to protect our proprietary technology. We may have to engage in
litigation in order to protect our patents and other intellectual property
rights, or to determine the validity or scope of the proprietary rights of
others. This kind of litigation can be time-consuming and expensive, regardless
of whether we win or lose. Because it is critical to our success that we are
able to prevent competitors from copying our innovations, we intend to continue
to seek patent and
trade secret protection for our technologies. The process of seeking patent protection can be long and expensive and we cannot be certain that any currently pending or future applications will actually result in issued patents, or that, even if patents are issued, they will be of sufficient scope or strength to provide meaningful protection or any commercial advantage to us. Furthermore, others may develop technologies that are similar or superior to our technology, or design around the patents that we own. We also rely on trade secret protection for our technology, in part through confidentiality agreements with our employees, consultants, distributors and third parties. However, these agreements may be breached or otherwise not effective and we may not have adequate remedies for any breach or shortfall of these agreements. In any case, others may come to know about our trade secrets through a variety of methods. In addition, our foreign issued patents only cover France, Germany and Japan, and the laws of some territories in which we sell our products may not protect our intellectual property rights to the same extent as do the laws of Canada and the United States.
Despite our efforts, our intellectual property rights, particularly our existing or future patents, may be invalidated, circumvented, challenged or required to be licensed to others. Furthermore, others may develop technologies that are similar or superior to our technology, duplicate or reverse engineer our technology, or design around the patents owned or licensed by us. We cannot be sure that the steps that we take to protect our technology will prevent misappropriation or infringement. If we fail to protect our technology so that others may copy or use it, we will be less able to differentiate our products and our sales will decline.
IF OTHERS CLAIM THAT OUR PRODUCTS INFRINGE UPON THEIR INTELLECTUAL PROPERTY RIGHTS, WE MAY BE FORCED TO SEEK EXPENSIVE LICENSES, RE-ENGINEER OUR PRODUCTS, ENGAGE IN EXPENSIVE AND TIME-CONSUMING LITIGATION OR STOP MARKETING THE CHALLENGED PRODUCTS, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS AND COULD INCREASE OUR COSTS.
Litigation regarding intellectual property rights is common in the technology industry and, for this reason, we expect that third-party infringement claims involving technologies may increase. If an infringement claim is filed against us, we may be prevented from using some of our technologies and may incur significant costs to resolve the claim.
We could incur substantial costs in defending ourselves and our customers against infringement claims. Litigation could also adversely affect sales of the challenged product or technology and divert the efforts of our management and technical personnel. In the event of a claim of infringement, we may be required to obtain one or more licenses from third parties. We cannot assure you that we, or our customers, could obtain necessary licenses from third parties at a reasonable cost or at all. If we fail to obtain a license where one is required, we could incur substantial liabilities and be forced to suspend the marketing of the challenged products.
WE REQUIRE EMPLOYEES WHO ARE KNOWLEDGEABLE ABOUT THE SPECIALIZED NATURE OF OUR BUSINESS. IF WE ARE UNABLE TO ATTRACT AND RETAIN SUFFICIENT NUMBERS OF HIGHLY SKILLED TECHNICAL, SALES AND MARKETING AND OTHER PERSONNEL, OUR OPERATIONS AND FINANCIAL RESULTS WOULD SUFFER.
Due to the specialized nature of our business, we are highly dependent on the continued service of and on the ability to attract and retain, qualified engineering, sales, marketing and senior management personnel in the area of fiber optics. The competition for such personnel is intense. The loss of key employees or management personnel could have a material adverse effect on our business and operating results. We may not be able to continue to attract and retain the qualified personnel necessary for the development of our business. In addition, if we are unable to hire additional qualified personnel as needed, we may not be able to adequately manage and complete our existing sales commitments and to bid for and execute additional sales.
We must provide significant training for our growing employee base due to the highly specialized nature of fiber-optic test, measurement and monitoring equipment. Our current engineering personnel may be inadequate and we may fail to assimilate and train new employees. Highly skilled employees with the education and training that we require, especially employees with significant experience and expertise in fiber optics, are in high demand. Once trained, our employees may be hired by our competitors.
OUR BUSINESS STRATEGY AND OUR ABILITY TO OPERATE PROFITABLY DEPEND ON THE CONTINUED SERVICES OF OUR SENIOR MANAGEMENT TEAM LED BY GERMAIN LAMONDE, OUR CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER, OR ANY OF OUR SENIOR MANAGEMENT, THE LOSS OF WHOM WOULD ADVERSELY AFFECT OUR BUSINESS.
Our ability to maintain our competitive position depends to a significant extent on the efforts and abilities of our senior management, particularly Germain Lamonde, our Chairman of the Board, President and Chief Executive Officer. Although we expect to enter into an employment agreement with Mr. Lamonde prior to the closing of the offering, we do not have employment agreements with any of our other key executives. Their managerial, technical and other services would be difficult to replace and if we lose the services of one or more of our executive officers, or if one of them decides to join a competitor or otherwise compete directly or indirectly against us, our business would be seriously harmed. The loss of their services would jeopardize our ability to maintain our competitive position. We do not have "key person" life insurance policies covering any of our employees.
IF WE ARE NOT ABLE TO MANAGE OUR GROWTH EFFECTIVELY, WE MAY NOT BE ABLE TO MAINTAIN OR IMPROVE OUR CURRENT LEVEL OF PROFITABILITY.
We expect our business and the industry in which we compete to continue to undergo rapid change. We plan to significantly expand our distribution and marketing capabilities by opening additional international sales offices and service centers, by bolstering our key account management program, by hiring application engineers and by increasing our sales network worldwide. We also intend to increase our manufacturing floor space by 167% through the planned acquisition of an additional facility of approximately 112,000 square feet. Finally, we have had a significant increase in our number of employees from 429 on May 31, 1999 to 671 on May 31, 2000. Our ability to be profitable depends on our ability to manage this rapid growth. The failure of our management to respond effectively to and manage changing technological and business conditions could have a material adverse impact on our business, financial condition and results of operations.
WE DEPEND ON A SINGLE SUPPLIER OR A LIMITED NUMBER OF SUPPLIERS FOR SOME OF THE KEY COMPONENTS AND MATERIALS IN OUR PRODUCTS, WHICH MAKES US SUSCEPTIBLE TO SUPPLY SHORTAGES OR PRICE FLUCTUATIONS THAT COULD ADVERSELY AFFECT OUR OPERATING RESULTS.
We depend on a limited number of suppliers for parts used to manufacture our products. All our orders are placed through individual purchase orders and, therefore, our suppliers may stop supplying parts to us at any time. The reliance on a single source or limited number of suppliers could result in delivery problems and reduced control over product pricing and quality. The process of qualifying a new contract manufacturer for complex products, designed to our specifications, such as our optical and mechanical parts, is lengthy and would consume a substantial amount of time of our technical personnel and management. If we sought to change manufacturers in a short period of time, our business would be disrupted. In addition, we may be unsuccessful in identifying a new manufacturer capable of and willing to meet our needs on terms that we would find acceptable.
WE EXPECT THE PRICE OF OUR EXISTING PRODUCTS TO DECLINE AND IF WE DO NOT REDUCE OUR MANUFACTURING COSTS OR INTRODUCE NEW PRODUCTS WITH HIGHER MARGINS, OUR GROSS MARGINS WILL DECLINE AND WE COULD INCUR LOSSES.
Our industry is very competitive and prices for fiber-optic test, measurement and monitoring equipment will likely decline. These price declines result from factors such as:
- increased competition for business;
- a limited number of potential customers;
- competition from companies with lower labor and production costs;
- introduction of new products by competitors; and
- greater economies of scale for higher-volume manufacturers.
We may have to increase our manufacturing capacity and our unit volume sold in order to maintain our existing sales. If we add capacity, our fixed costs will increase. As a result, we would have to increase the level of sales to maintain operating margins. If we are unable to continuously reduce our manufacturing costs or introduce new products with higher margins, our gross margins could decline.
IF WE FAIL TO ADAPT APPROPRIATELY TO THE CHALLENGES ASSOCIATED WITH OPERATING INTERNATIONALLY, THE GROWTH OF OUR BUSINESS MAY BE IMPEDED AND OUR OPERATING RESULTS MAY BE AFFECTED.
For the fiscal year ended August 31, 1999, customers outside of the United States and Canada accounted for 44% of our sales and for the six months ended February 29, 2000, these customers accounted for 36% of our sales. We plan to increase our international sales activities and have recently opened offices in China, Japan and Singapore. Our international sales will be limited if we cannot establish relationships with international distributors, establish additional foreign operations, expand international sales channel management, hire additional personnel and develop relationships with international service providers. Even if we are able to successfully continue our international operations, we may not be able to maintain or increase international market demand for our products. Our international operations are subject to a number of risks, including:
- unexpected changes in regulatory requirements, tax rates or tariffs that make our products and services more expensive and therefore less attractive to potential customers;
- challenges in staffing and managing foreign operations due to the limited number of qualified candidates, employment laws and practices in foreign countries, any of which could increase the cost and reduce the efficiency of operating in foreign countries;
- technology standards that differ from those on which our products are based, which could require expensive redesign and retention of personnel familiar with those standards;
- longer accounts receivable payment cycles and possible difficulties in collecting payments which may increase our operating costs and hurt our financial performance;
- political and economic instability; and
- certification requirements.
Any of these factors could harm our international operations and negatively affect our financial performance. For example, we currently face problems with increasing, and constantly changing, certification requirements. In addition, although the amounts involved were not material, we have in the past encountered difficulties collecting accounts receivable in countries experiencing economic instability. The recurrence of weakness in these economies or of weakness in other foreign economies could have a significant negative effect on our future operating results.
OUR PRODUCTS MAY HAVE UNFORESEEN DEFECTS THAT COULD HARM OUR REPUTATION, IMPEDE MARKET ACCEPTANCE OF OUR PRODUCTS AND NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS.
As a result of their complexity, our products may contain undetected errors or compatibility problems or regulatory compliance issues, particularly when they are first introduced or when new versions are released. There can be no assurance that, despite our testing, errors will not be found in new products after they have been fully deployed and operated under peak stress conditions. If we are unable to fix defects or other problems, we could experience, among other things:
- loss of customers;
- damage to our brand reputation;
- failure to attract new customers or achieve market acceptance;
- diversion of development and engineering resources;
- legal actions by our customers, including claims for consequential damages and loss of profits; and
- legal actions by governmental entities, including actions to impose product recalls and/or forfeitures.
The occurrence of any one or more of the foregoing could seriously harm our business, financial condition and results of operations.
OUR INSURANCE MAY NOT BE SUFFICIENT TO COVER ALL POTENTIAL PRODUCT LIABILITY AND WARRANTY CLAIMS. A SUCCESSFUL CLAIM EXCEEDING OUR POLICY LIMIT WILL REDUCE OUR WORKING CAPITAL, INCREASE OUR EXPENSES AND HAVE A NEGATIVE EFFECT ON OUR OPERATING RESULTS.
Our products are designed to help telecommunications carriers and manufacturers of optical components, value-added optical modules and optical networking systems ensure network reliability. The failure of our products to perform to client expectations could give rise to product liability and warranty claims. We carry product liability insurance that we consider adequate in view of industry practice. However, a successful claim against us for an amount exceeding our policy limit would force us to use our own resources to pay the claim, which could result in a reduction of our working capital available for other uses, increase our expenses and have a negative effect on our results of operations.
AS OUR COMPETITORS CONSOLIDATE, THEY MAY OFFER PRODUCTS OR PRICING THAT WE CANNOT MEET, WHICH COULD CAUSE OUR SALES TO DECLINE.
Consolidation in the fiber-optic test, measurement and monitoring industry could intensify the competitive pressures that we face. Recently, some of our competitors have merged or have been acquired by larger companies. These combined companies could produce more high-performance products and offer them at more competitive prices.
OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND YOU SHOULD NOT RELY ON THEM AS AN INDICATION OF OUR FUTURE PERFORMANCE.
Our sales and operating results have fluctuated from quarter to quarter in the past and may fluctuate significantly in the future. In addition, our revenue and operating results generally depend on the volume and timing of the orders we receive from customers as well as our ability to fulfill the orders received. Our operating expenses, which include research and development, and selling and administrative expenses, are relatively fixed in the short term. If our revenue is lower than we expect because we sell fewer products than we anticipate or if there is a delay in the release of new products, we may not be able to quickly reduce our operating expenses in response. Factors that could affect the amount and timing of our revenues, and cause quarterly fluctuations in our operating results include:
- the length of our product sales cycle, especially for our higher priced and more complex products;
- our ability to sustain product volumes and high levels of quality across all product lines; and
- the timing of introduction and market acceptance of new products by us, our competitors or our suppliers.
Our operating results could also be affected by the following factors over which we have little or no control:
- changes in the capital budgets of our customers, which may cause seasonal or other fluctuations in the product mix, volume, timing and number of orders we receive from our customers; and
- difficulties in collecting accounts receivable.
Due to these factors, you should not rely on quarter-to-quarter comparisons of our results of operations as an indication of our future performance.
IF OPTICAL FIBER IS REPLACED BY ANOTHER MEDIUM AS THE PRIMARY SOLUTION FOR BANDWIDTH-INTENSIVE APPLICATIONS, OR IF HIGH-BANDWIDTH TRANSMISSION NETWORKS ARE NO LONGER IN GREAT DEMAND, WE COULD EXPERIENCE A SIGNIFICANT LOSS OF SALES.
The increase in fiber-optic cable production and the growth in fiber deployment are causing increased demand for fiber-optic test, measurement and monitoring equipment. If the demand for these markets decreases or disappears, or if optical fiber is replaced by a higher-performance medium, it could have a material adverse effect on our business, financial condition and results of operations.
IF WE FAIL TO PREDICT OUR SUPPLY REQUIREMENTS ACCURATELY, WE WILL HAVE EXCESS INVENTORY OR INSUFFICIENT INVENTORY, EITHER OF WHICH COULD CAUSE US TO INCUR ADDITIONAL COSTS OR EXPERIENCE MANUFACTURING DELAYS.
We provide forecasts of our requirements to some of our suppliers up to six months prior to scheduled delivery of products to our customers. If we overestimate our requirements, we may have excess inventory, which could increase our costs and harm our relationships with our suppliers due to reduced future orders. If we underestimate our requirements, we may have an inadequate inventory of parts. Inadequate inventory could interrupt manufacturing of our products and result in delays in shipments. In addition, lead times for materials and parts that we order are long and depend on factors such as the procedures of, or supply terms with, a specific supplier and demand for each part at a given time. In the case of some parts in short supply, suppliers have imposed strict allocations that limit the number of these parts that they will supply to a given customer in a specified time period. Although to date suppliers have not made selective allocations that adversely affected us, these suppliers may choose, in the future, to increase allocations to larger, more established companies, which could reduce our allocations and harm our ability to manufacture our products.
WE MAY NOT BE ABLE TO INTRODUCE NEW AND ENHANCED PRODUCTS ON A TIMELY BASIS, WHICH COULD PREVENT US FROM ACHIEVING OUR GROWTH STRATEGY AND ADVERSELY AFFECT OUR OPERATING RESULTS.
The development of proprietary technologies entails significant technical and business risks and requires substantial expenditures and lead time. If we experience product delays in the future, we may face:
- customer dissatisfaction;
- cancellation of orders;
- negative publicity;
- loss of sales;
- slower market acceptance of our products; and
- legal actions by customers.
In the future, our efforts to remedy product delays may not be successful and we may lose customers as a result. Delays in bringing to market new products or product enhancements could be exploited by our competitors. If we lose market share as a result of lapses in our product development, our business would suffer.
FLUCTUATIONS IN THE EXCHANGE RATES BETWEEN THE CANADIAN DOLLAR AND THE U.S. DOLLAR MAY ADVERSELY AFFECT OUR OPERATING MARGINS.
The majority of our sales is denominated in U.S. dollars. However, a majority of our operating expenses and capital expenditures are denominated in Canadian dollars. As a result, we are exposed to fluctuations in the exchange rates between the Canadian dollar and the U.S. dollar. An increase in the value of the Canadian dollar relative to the U.S. dollar could have a material adverse effect on our operating margins.
AS OUR CUSTOMERS CONSOLIDATE, THEY MAY REDUCE PURCHASES OF OUR PRODUCTS, WHICH WOULD CAUSE OUR SALES TO DECLINE.
Consolidation in the telecommunications industry could reduce the number of customers to whom our products could be sold. Some of our customers have recently merged. Although to date we have not experienced
any adverse effects as a result of these mergers, these merged customers could, in the future, obtain products from a source other than us, which would cause our sales to decline. In addition, some of our manufacturer customers may merge with or acquire our competitors and, as a result, discontinue their relationships with us.
OUR CUSTOMERS ARE NOT OBLIGATED TO BUY MATERIAL AMOUNTS OF OUR PRODUCTS AND MAY CANCEL OR DEFER PURCHASES ON SHORT NOTICE.
Our customers typically purchase our products under individual purchase orders and may cancel or defer purchases on short notice without significant penalty. Accordingly, sales in a particular period are difficult to predict. Decreases in purchases, cancellations of purchase orders, or deferrals of purchases may have a material adverse effect on our operating results, particularly if we do not anticipate them.
WE MAY NOT BE ABLE TO SUSTAIN OUR RESEARCH AND DEVELOPMENT ACTIVITIES AS OUR RESEARCH AND DEVELOPMENT CREDITS AND GRANTS DECLINE BECAUSE OF THE INCREASING EFFECTIVE COST OF OUR RESEARCH AND DEVELOPMENT ACTIVITIES.
Our historical operating results reflect substantial benefits from programs sponsored by the Canadian and Quebec governments for the support of research and development. Research and development tax credits and grants represented 32.5% of our gross research and development expenses for the year ended August 31, 1999 and 31.4% for the six months ended February 29, 2000. These tax credits and grants will decline as our assets grow. Accordingly, the effective cost of our future research and development activities will increase.
UNEXPECTED DECLINES IN OUR RESEARCH AND DEVELOPMENT CREDITS AND GRANTS MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS.
If unexpected changes in the laws or government policies terminate or adversely modify the government programs, under which we receive research and development tax credits and grants, or if we unexpectedly become unable to participate in or take advantage of these programs, then our net research and development expenses will materially increase. To the extent that we increase our activities outside Canada or Quebec, which could result from, among other things, future acquisitions, the increased activities may not be eligible for these programs. If we are required to decrease our research and development activities, we may be unable to compete effectively.
WE MAY NOT BE ABLE TO MAKE THE NECESSARY ACQUISITIONS NEEDED FOR THE DEVELOPMENT OF OUR BUSINESS AND ANY ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS AND HARM OUR FINANCIAL CONDITION.
Although we have no existing commitments or agreements regarding any acquisitions, we intend to seek acquisitions of businesses, products and technologies that are complementary to ours. There can be no assurance that we will ultimately make any such acquisition.
We have in the past made strategic acquisitions of intellectual property, such as the arrangements we have with GAP Optique S.A. and of complementary products through the recent acquisition of Nortech Fibronic Inc. We anticipate that in the future, as part of our business strategy, we will continue to make strategic acquisitions of complementary companies, products and technologies. In the event of any future acquisition, we could:
- issue shares that would dilute your percentage ownership;
- incur debt;
- assume liabilities; or
- incur expenses related to in-process research and development, amortization of goodwill and other intangible assets.
These acquisitions also involve numerous risks, including:
- problems combining the acquired operations, technologies or products;
- unanticipated costs or liabilities;
- diversion of management's attention from our core business;
- adverse effects on existing business relationships with suppliers and customers;
- risks associated with entering markets in which we have no or limited prior experience; and
- potential loss of key employees, particularly those of acquired organizations.
We cannot assure you that we will be able to successfully integrate any businesses, products, technologies or personnel that we might acquire in the future, which may harm our business.
OUR SALES WOULD SUFFER IF A KEY SALES REPRESENTATIVE OR DISTRIBUTOR STOPPED SELLING OR REDUCED SALES OF OUR PRODUCTS.
We sell substantially all of our products through a network of independent sales representatives and distributors, the majority of whom have exclusive rights to sell our products in specific territories or markets. If we are unable to provide competitive sales commissions, maintain an appropriate sales volume, or offer sufficient channel-support, our independent sales representatives and distributors may discontinue sales of our products and switch to representing one or more of our competitors, which would result in reduced sales for us.
WE MAY NEED ADDITIONAL CAPITAL, AND MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL ON FAVORABLE TERMS OR AT ALL, WHICH COULD LIMIT OUR ABILITY TO GROW AND COULD INCREASE OUR COSTS.
Our future liquidity and capital requirements are difficult to predict because they depend on numerous factors, including the success of our existing and new product offerings as well as competing technological and market developments. As a result, we may not be able to generate sufficient cash from our operations to meet additional working capital requirements, support additional capital expenditures or take advantage of acquisition opportunities. Accordingly, we may need to raise additional capital in the future.
Our ability to obtain additional financing will be subject to a number of factors, including market conditions and our operating performance. These factors may render the timing, amount, terms and conditions of additional financing unattractive for us. If we raise additional funds by selling equity securities, the relative ownership of our existing investors could be diluted or the new investors could obtain terms more favorable than previous investors. If we raise additional funds through debt financing, we could incur significant borrowing costs. If we are unable to raise additional funds when needed, our ability to operate and grow our business could be impeded.
OUR PRODUCTS MAY BE REQUIRED TO CONFORM TO NEW AND UNFORESEEN REGULATORY REQUIREMENTS WHICH COULD INCREASE OUR COSTS AND REDUCE OUR MARKET SHARE.
Our products are designed to conform to the regulatory requirements of the countries in which they are marketed. In the event that the technical regulations applicable in a given country are in any way changed, we may be required to modify, redesign or recall some or all of our products in order to continue participating in that market. These changes likely would increase manufacturing costs and could create technical advantages for products marketed by our competitors.
RESIDUAL YEAR 2000 ISSUES MAY DISRUPT OUR OPERATIONS, SUBJECT US TO LIABILITIES AND COSTS AND AFFECT THE TIMING OF OUR SALES.
Since many of our test systems rely on software, they could be affected by Year 2000 issues. To date, we have not identified any specific Year 2000 problems adversely affecting our business. However, we may still be vulnerable to any residual Year 2000 problems causing the failure of any of our products, as a result of which we could lose customers, suffer significant disruptions in our business, lose sales and incur substantial liabilities and expenses. We could also become involved in costly litigation resulting from Year 2000 problems. This could seriously harm our business, financial condition and results of operations.
RISKS RELATED TO THIS OFFERING AND OWNING OUR SUBORDINATE VOTING SHARES
OUR PRINCIPAL SHAREHOLDER OWNS ALL OF OUR MULTIPLE VOTING SHARES AND WILL BE ABLE TO EXERCISE SIGNIFICANT INFLUENCE OVER OUR AFFAIRS. HOLDERS OF SUBORDINATE VOTING SHARES WILL HAVE A LIMITED ROLE IN OUR AFFAIRS.
Holders of our subordinate voting shares are entitled to one vote per share and holders of our multiple voting shares are entitled to ten votes per share. Following the closing of this offering, Germain Lamonde, our Chairman of the Board, President and Chief Executive Officer, will have control over all of our outstanding multiple voting shares representing 98.3% of the outstanding voting power. As a result, he will be able to control all matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combinations. The concentration of ownership would make it more difficult for a third party to acquire our control if Germain Lamonde were to oppose the change of control transaction. This could prevent our shareholders from realizing a premium over the market prices for their subordinate voting shares or from bringing about a change in management.
WE WILL HAVE BROAD DISCRETION REGARDING THE USE OF PROCEEDS FROM THIS OFFERING. IF WE DO NOT USE THE PROCEEDS EFFECTIVELY TO DEVELOP AND GROW OUR BUSINESS, YOUR INVESTMENT COULD SUFFER.
We intend to use approximately $17.3 million to repay promissory notes to be issued to satisfy the dividends to be declared to our existing shareholders prior to the closing of this offering and approximately $10.0 million to repay indebtedness. While we do not have specific uses for a significant portion of the balance of the proceeds from this offering, we expect it will give us the opportunity to compete more effectively against our competitors, many of which are larger than we are and have significantly greater financial resources. Although to date we have not identified any specific opportunity nor budgeted for any specific projects, we may use the balance of the proceeds to acquire or invest in related businesses, products and technologies. As a result, our management will have broad discretion in how we use the net proceeds from this offering. You will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions regarding the use of the net proceeds from this offering and we may spend these proceeds in ways that do not increase our operating results or market value.
TECHNOLOGY-RELATED STOCK PRICES ARE ESPECIALLY VOLATILE. THIS VOLATILITY MAY DEPRESS OUR SHARE PRICE AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT A PRICE AT OR ABOVE THE INITIAL PUBLIC OFFERING PRICE.
Stock market prices for technology companies have been volatile and the market price of our subordinate voting shares may be volatile. In particular, the market prices of the shares of many companies in the technology sector have experienced wide fluctuations that have often been unrelated to their operating performance. As a result, you may not be able to resell your subordinate voting shares at or above the initial public offering price. Although the market price of our subordinate voting shares will in part be based on our operating and financial performance, it may also be based on conditions in the fiber-optic industry and other factors beyond our control.
MORE THAN 38 MILLION SHARES, IN ADDITION TO THE SHARES COVERED BY THIS PROSPECTUS, WILL BE OUTSTANDING AFTER THIS OFFERING AND SALES OF THESE SHARES MAY DEPRESS OUR SHARE PRICE.
After this offering, we will have 44,709,605 shares outstanding. Sales of a substantial number of our subordinate voting shares in the public market following this offering could cause the market price of our subordinate voting shares to drop. All of the subordinate voting shares sold in this offering will be freely tradeable. Subordinate voting shares issuable upon conversion of 38,000,000 multiple voting shares, held by Germain Lamonde, will be available for sale in the public market 180 days after the date of this prospectus, subject to resale restrictions under applicable Canadian and U.S. securities laws. See "Shares Eligible for Future Sale."
THERE MAY BE NO ACTIVE TRADING MARKET IN OUR SUBORDINATE VOTING SHARES AFTER THIS OFFERING, WHICH MAY MAKE IT DIFFICULT FOR YOU TO RESELL YOUR SHARES.
Prior to this offering, there was no organized market on which to trade the subordinate voting shares and there can be no assurance that an active market for the trading of the shares will develop or be maintained after
this offering. Factors such as our financial results and the financial results of our competitors, general industry conditions and financial markets could result in fluctuations in the share price of the subordinate voting shares.
YOU WILL SUFFER AN IMMEDIATE DILUTION OF YOUR INVESTMENT.
After giving effect to this offering, the offering price of each subordinate voting share will exceed the net tangible book value per share by $18.42, representing a dilution factor of 87.7%. Accordingly, investors who purchase subordinate voting shares pursuant to this offering will be subject to an immediate dilution in the book value of their investments. See "Dilution."
WE ARE NOT LIKELY TO PAY DIVIDENDS FOR THE FORESEEABLE FUTURE.
Except for the dividend payable prior to the closing of this offering, we do not plan to pay dividends on our subordinate voting shares for at least the next three years. We currently intend to retain any earnings for reinvestment in our business. See "Dividend Policy."
SINCE WE ARE A CANADIAN COMPANY AND MOST OF OUR ASSETS AND KEY PERSONNEL ARE LOCATED IN CANADA, YOU MAY NOT BE ABLE TO ENFORCE ANY U.S. JUDGMENT FOR CLAIMS
YOU MAY BRING AGAINST US, OUR ASSETS, OUR KEY PERSONNEL OR THE EXPERTS NAMED IN THIS PROSPECTUS.
We have been organized under the laws of Canada. Many of our assets are located outside the United States. In addition, a majority of the members of our board of directors and our officers and the experts named in this prospectus are residents of countries other than the United States. As a result, it may be impossible for you to effect service of process within the United States upon us or these persons or to enforce against us or these persons any judgments in civil and commercial matters, including judgments under United States federal securities laws. In addition, a Canadian court may not permit you to bring an original action in Canada or to enforce in Canada a judgment of a U.S. court based upon civil liability provisions of U.S. federal securities laws. See "Enforceability of Civil Liabilities."
OUR BOARD OF DIRECTORS MAY ISSUE, WITHOUT SHAREHOLDERS' APPROVAL, AN UNLIMITED NUMBER OF PREFERRED SHARES THAT HAVE RIGHTS AND PREFERENCES SUPERIOR TO THOSE OF OUR SUBORDINATE VOTING SHARES. SUCH ISSUANCE MAY DELAY OR PREVENT A CHANGE OF CONTROL.
Our articles of incorporation allow the issuance of an unlimited number of preferred shares in one or more series. After this offering, there will only be one series of non-voting preferred shares outstanding. However, our board of directors may set the rights and preferences of any series of preferred shares in its sole discretion without the shareholders' approval. The rights and preferences of those preferred shares may be superior to those of the subordinate voting shares. Accordingly, the issuance of preferred shares may adversely affect the rights of holders of subordinate voting shares and could have the effect of delaying or preventing a change of control. See "Description of Share Capital."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and uncertainties. These statements relate to our future plans, objectives, expectations and intentions. We have identified these statements by the use of words such as "may", "will", "expect", "anticipate", "intend", "plan", "estimate", "believe", "continue" or other similar expressions. These forward-looking statements reflect our current expectations and assumptions as to future events that may not prove to be accurate. Our actual results are subject to a number of risks and uncertainties and could differ materially from those discussed in these statements. Factors that could contribute to these differences include, but are not limited to, those discussed in the section entitled "Risk Factors" and elsewhere in this prospectus. In light of the many risks and uncertainties surrounding our business and operations, you should keep in mind that we cannot guarantee that the forward-looking statements described in this prospectus will transpire. We undertake no obligation and do not intend, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.
ENFORCEABILITY OF CIVIL LIABILITIES
We have been organized under the laws of Canada and our executive offices are located in Quebec, Canada. Many of our directors, controlling persons and officers and representatives of the experts named in this prospectus, are residents of Canada and a substantial portion of their assets and a majority of our assets are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon the directors, controlling persons, officers and representatives of experts who are not residents of the United States or to enforce against them judgments obtained in the courts of the United States based upon the civil liability provisions of the federal securities laws or other laws of the United States. There is doubt as to the enforceability in Canada against us or against any of our directors, controlling persons, officers or experts who are not residents of the United States, in original actions or in actions for enforcement of judgments of United States courts, of liabilities based solely upon the civil liability provisions of the U.S. federal securities laws. Therefore, it may not be possible to enforce those actions against us, our directors and officers or the experts named in this prospectus.
EXCHANGE RATE INFORMATION
The following table sets forth, for each period indicated, the high and low exchange rates based on the noon buying rate in the city of New York for cable transfers in Canadian dollars as certified by the Federal Reserve Bank of New York, which is often referred to as the "noon buying rate." The exchange rates are presented as Canadian dollars per $1.00. On June 7, 2000, the noon buying rate was $1.00 equals C$1.4785 and the inverse noon buying rate was C$1.00 equals $0.6764.
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
---------------------------------------------------- FEBRUARY 29,
1995 1996 1997 1998 1999 2000
-------- -------- -------- -------- -------- ----------------
High.................. C$1.4238 C$1.3822 C$1.3995 C$1.5770 C$1.5570 C$1.4952
Low................... 1.3373 1.3285 1.3310 1.3713 1.4512 1.4350
Average(1)............ 1.3742 1.3634 1.3707 1.4490 1.5055 1.4652
End of Period......... 1.3432 1.3685 1.3890 1.5745 1.4965 1.4505
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USE OF PROCEEDS
We expect to receive approximately $116,180,000 in net proceeds from the sale of 6,000,000 subordinate voting shares in this offering, assuming an initial public offering price of $21.00 per share, after deducting underwriting commissions and our estimated expenses in connection with this offering. We estimate that the net proceeds will be approximately $133,757,000 if the underwriters' over-allotment option is exercised in full.
Of the net proceeds that we will receive from this offering, we will use:
- approximately $17.3 million to repay promissory notes to be issued as payment for dividends that we plan to declare prior to the closing of this offering on the Class "A" shares held by GEXFO Investissements Technologiques inc., a company controlled by Germain Lamonde, Fiducie Germain Lamonde, a family trust for the benefit of Germain Lamonde and members of his family and G. Lamonde Investissements Financiers inc., a company controlled by Germain Lamonde. The debt evidenced by the promissory notes will bear no interest and will be payable on demand;
- approximately $2.0 million to repay our bank operating loan of C$3.0 million. The loan bears interest at the prime rate of the bank plus 1/2% and is payable on demand. As of June 7, 2000, the interest rate of this loan was 8.0%. We used the proceeds from that loan to pay the cash consideration and related expenses relating to our acquisition of Nortech Fibronic Inc. in February 2000;
- approximately $1.4 million to repay a C$2.0 million loan from 9080-9823 Quebec inc., a company controlled by Germain Lamonde. That loan bears interest at a rate equal to the prime rate plus 1% and is payable on demand. As of June 7, 2000, the interest rate of this loan was 8.5%;
- approximately $3.4 million to repay a C$5.0 million bank loan that has been made available to us in connection with our planned acquisition of real property in June 2000. The loan will bear interest at a rate equal to the prime rate plus 1/2%. As of June 7, 2000, the interest rate of this loan would have been 8.0%;
- approximately $3.2 million to pay down debt under our revolving bank credit facility. As of June 7, 2000, the interest rate of this credit facility was 7.0%; and
- the remaining net proceeds for our working capital and other general corporate purposes, including sales and marketing expenses and research and development expenditures. The amount and timing of these expenditures will vary depending on a number of factors, including future revenue growth, if any, the amount of cash we generate from operations and the progress of our product development efforts.
If the opportunity arises, we may use a portion of the net proceeds to acquire or invest in related businesses, products and technologies. We currently have no commitments or agreements for any material acquisition of, or investment in, any third party. Pending any use of the net proceeds for the above purposes, we intend to invest the funds in short-term, interest-bearing, investment grade securities. See "Business -- Our Strategy."
DIVIDEND POLICY
We have paid the following dividends per share during the five fiscal years ended August 31, 1999 and the six months ended February 29, 2000:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
--------------------------------------------------- FEBRUARY 29,
1995 1996 1997 1998 1999 2000
------- ------- ------- ------- ------- ----------------
Class "A" Shares..... C$0.008 C$0.008 -- -- C$0.113 C$0.002
Class "E" Shares..... -- -- C$0.008 C$0.008 --
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Prior to the closing of this offering, we will declare a dividend of C$26.0 million (approximately $17.6 million) to the holders of Class "A" and Class "F" shares. Holders of Class "F" shares will receive a cash payment of C$476,616 (approximately $322,000). We will issue promissory notes to the holders of Class "A" shares for an aggregate principal amount of C$25.5 million (approximately $17.3 million). The promissory notes will bear no interest and will be repaid from the proceeds of this offering. We do not currently anticipate paying additional dividends for at least the next three years. Our current intention is to reinvest our earnings in our business long-term growth. Any future determination by us to pay dividends will be at the discretion of our board of directors and in accordance with the terms and conditions of any outstanding indebtedness and will depend upon our financial condition, results of operations, capital requirements and such other functions as our board of directors considers relevant.
CAPITALIZATION
The following table sets forth our capitalization as of February 29, 2000:
- on an actual basis;
- on a pro forma basis, giving effect to the exchange of all Class "A" shares into 38,000,000 multiple voting shares, the issuance of 485,537 Class "F" shares to employees under outstanding subscription agreements, the exchange of 709,605 Class "F" shares into subordinate voting shares, and the exchange of all Class "G" shares into 800,000 preferred shares series 1, and the declaration of a $17.6 million dividend, all of which will occur prior to the closing of this offering; and
- on a pro forma as adjusted basis, giving effect to the sale of 6,000,000 subordinate voting shares offered by this prospectus at an assumed initial public offering price of $21.00 and the application of the estimated net proceeds from this offering.
AS AT FEBRUARY 29, 2000
-----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
Long-term debt (including current portion)............... $ 633 $ 633 $ 633
Mandatorily redeemable preferred shares:
Class "B", Class "C" and Class "E" shares: unlimited
authorized shares, no shares issued or outstanding,
actual; no shares authorized, issued or outstanding,
pro forma and pro forma as adjusted.................... -- -- --
Class "G" shares: unlimited authorized shares, 800,000
shares issued and outstanding, actual; no shares
authorized, issued or outstanding, pro forma and pro
forma as adjusted...................................... 555 -- --
Preferred shares series 1: no shares authorized, issued
or outstanding, actual; 800,000 shares authorized,
issued and outstanding, pro forma and pro forma as
adjusted............................................... -- 555 555
Shareholders' equity:
Class "A" shares: unlimited authorized shares,
38,000,000 issued and outstanding, actual; no shares
authorized, issued or outstanding, pro forma and pro
forma as adjusted...................................... 1 -- --
Class "D" shares: unlimited authorized shares, no
shares issued or outstanding, actual; no shares
authorized, issued or outstanding, pro forma and pro
forma as adjusted...................................... -- -- --
Class "F" shares: unlimited authorized shares, 224,068
shares issued and outstanding, actual; no shares
authorized, issued or outstanding, pro forma and pro
forma as adjusted...................................... 103 -- --
Multiple voting shares: no shares authorized, issued or
outstanding, actual; unlimited authorized shares,
38,000,000 shares, issued and outstanding, pro forma
and pro forma as adjusted.............................. -- 1 1
Subordinate voting shares: no shares authorized, issued
or outstanding, actual; unlimited shares authorized,
709,605 shares issued and outstanding, pro forma;
6,709,605 shares issued and outstanding, pro forma as
adjusted............................................... -- 478 116,659
Cumulative translation adjustment...................... 640 640 640
Retained earnings...................................... 18,304 704 704
------- ------ --------
Total shareholders' equity.......................... 19,048 1,823 118,003
------- ------ --------
Total capitalization........................... $20,236 $3,011 $119,191
======= ====== ========
|
The table above does not include:
- 25,766 subordinate voting shares issuable upon conversion of the preferred shares series 1, assuming a conversion price of $21.00 per share, which may occur at our option on November 30, 2000; and
- 4,470,961 subordinate voting shares reserved for future issuances under our stock option plan, including 581,280 subordinate voting shares to be issued upon the exercise of stock options to be granted prior to the closing of this offering at an exercise price equal to the initial public offering price.
DILUTION
If you invest in our subordinate voting shares, your interest will be diluted by the amount of the difference between the public offering price per subordinate voting share and the pro forma as adjusted net tangible book value per subordinate voting share of this offering.
Our pro forma net tangible book value as of February 29, 2000 was $(739,000), or $(0.02) per subordinate voting share. Pro forma net tangible book value per subordinate voting share is equal to our total tangible assets less total liabilities, divided by the number of outstanding subordinate voting shares and multiple voting shares combined.
After giving effect to our sale of 6,000,000 subordinate voting shares in this offering at an assumed initial public offering price of $21.00 per subordinate voting share and after deducting the estimated underwriting commissions and estimated offering expenses, our pro forma as adjusted net tangible book value as of February 29, 2000 is $115.4 million, or $2.58 per share. This figure represents an immediate increase in our pro forma net tangible book value of $2.60 per subordinate voting share to existing shareholders and an immediate dilution of $18.42 per subordinate voting share to new investors. Dilution is determined by subtracting the pro forma as adjusted net tangible book value per subordinate voting share after this offering from the amount of cash a new investor pays for a subordinate voting share. The following table illustrates this dilution to new investors:
Assumed initial public offering price per subordinate voting
share..................................................... $21.00
Pro forma net tangible book value per subordinate voting
share as of February 29, 2000............................. $ (0.02)
Increase per subordinate voting share attributable to this
offering.................................................. 2.60
-------
Pro forma as adjusted net tangible book value per
subordinate voting share after this offering.............. $ 2.58
------
Dilution in net tangible book value per subordinate voting
share to
new investors............................................. $18.42
======
Percentage of dilution in relation to the offering price.... 87.7%
======
|
If the underwriters exercise their option to purchase additional subordinate voting shares in this offering, our pro forma adjusted net tangible book value as at February 29, 2000 would be $133.0 million, or $2.92 per subordinate voting share, representing an immediate increase in net tangible book value to our existing shareholders of $2.94 per share and immediate dilution to new investors of $18.08 per share.
The following table summarizes as of February 29, 2000 and after giving effect to the capital reorganization described above, the differences between the number of shares purchased from EXFO, the total consideration paid and the average price per share paid by our existing shareholders and by the new investors in this offering, before deducting the estimated underwriting commissions and estimated offering expenses:
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ------------ ------- ---------
Existing shareholders.......... 38,709,605 86.6% $ 479,000 0.4% $ 0.01
New investors.................. 6,000,000 13.4 126,000,000 99.6 21.00
---------- ----- ------------ -----
Total..................... 44,709,605 100.0% $126,479,000 100.0%
========== ===== ============ =====
|
If the underwriters' over-allotment option to purchase additional subordinate voting shares is exercised in full, the number of subordinate voting shares held by new investors purchasing subordinate voting shares in this offering will increase to 6,900,000 or 15.1%, of the total shares outstanding after this offering.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
You should read the selected consolidated financial data set forth below in conjunction with the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.
The consolidated statements of earnings data for the years ended August 31, 1995 and 1996 and the consolidated balance sheets data as of August 31, 1995, 1996 and 1997 are derived from our unaudited consolidated financial statements not included in this prospectus. The consolidated statements of earnings data for each of the three years ended August 31, 1997, 1998 and 1999 and the consolidated balance sheets data as of August 31, 1998 and 1999 are derived from our consolidated financial statements that have been audited by PricewaterhouseCoopers LLP, independent auditors, that are included elsewhere in this prospectus. The consolidated statements of earnings data for the six months ended February 28, 1999 and February 29, 2000 and the consolidated balance sheet data as of February 29, 2000 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. These unaudited financial statements include, in the opinion of our management, all adjustments, consisting only of normally recurring adjustments, necessary to present fairly this unaudited financial information.
Our consolidated financial statements are prepared in accordance with Canadian GAAP, which differs in certain respects from U.S. GAAP. For a description of the material differences between Canadian GAAP and U.S. GAAP in regards to our consolidated financial statements, see note 21 to our consolidated financial statements. Effective September 1, 1999, we adopted the U.S. dollar as the reporting currency for our consolidated financial statements. The financial statements for all periods prior to fiscal 2000 are presented in U.S. dollars in accordance with a translation of convenience method under Canadian GAAP using the representative exchange rate as at August 31, 1999 of $1.00 = C$1.4958. See note 3 to our consolidated financial statements included elsewhere in this prospectus. The historical results below are not necessarily indicative of the results to be expected for any future period.
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
----------------------------------------------- -------------------
FEB. 28, FEB. 29,
1995 1996 1997 1998 1999 1999 2000
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF EARNINGS DATA:
AMOUNTS UNDER CANADIAN GAAP
Sales..................................... $15,016 $19,229 $24,475 $31,605 $42,166 $18,728 $29,111
Cost of sales............................. 6,742 8,456 9,652 11,345 14,998 7,021 9,609
------- ------- ------- ------- ------- ------- -------
Gross margin.............................. 8,274 10,773 14,823 20,260 27,168 11,707 19,502
Operating expenses
Selling and administrative.............. 4,940 6,644 7,827 9,898 13,279 5,964 9,938
Net research and development............ 824 1,216 1,592 3,014 4,315 1,791 3,221
Amortization of capital and other
assets................................ 294 387 479 657 898 422 611
------- ------- ------- ------- ------- ------- -------
Total operating expenses.............. 6,058 8,247 9,898 13,569 18,492 8,177 13,770
Earnings from operations.................. 2,216 2,526 4,925 6,691 8,676 3,530 5,732
Interest expense (income) -- net.......... 390 418 89 (40) (136) (46) (25)
Foreign exchange loss (gain).............. (42) 7 184 (126) 506 398 116
------- ------- ------- ------- ------- ------- -------
Earnings before income taxes and
amortization of goodwill................ 1,868 2,101 4,652 6,857 8,306 3,178 5,641
Income taxes.............................. 675 430 1,582 2,356 2,492 958 1,887
------- ------- ------- ------- ------- ------- -------
Earnings before amortization of
goodwill................................ 1,193 1,671 3,070 4,501 5,814 2,220 3,754
Amortization of goodwill.................. -- -- -- -- -- -- 42
------- ------- ------- ------- ------- ------- -------
Net earnings for the period............... $ 1,193 $ 1,671 $ 3,070 $ 4,501 $ 5,814 $ 2,220 $ 3,712
======= ======= ======= ======= ======= ======= =======
Basic and fully diluted net earnings per
share................................... $ 0.03 $ 0.04 $ 0.08 $ 0.12 $ 0.14 $ 0.05 $ 0.10
Basic weighted average number of shares
used in per share calculations.......... 38,000 38,000 38,000 38,000 38,001 38,000 38,425
|
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
----------------------------------------------- -------------------
FEB. 28, FEB. 29,
1995 1996 1997 1998 1999 1999 2000
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
OTHER FINANCIAL DATA:
Gross research and development.......... $ 2,070 $ 2,667 $ 2,753 $ 4,406 $ 6,390 $ 2,816 $ 4,696
Net research and development............ $ 824 $ 1,216 $ 1,592 $ 3,014 $ 4,315 $ 1,791 $ 3,221
Dividends per share
Class "A" shares........................ $ 0.005 $ 0.005 -- -- $ 0.08 -- --
Class "C" shares........................ -- -- -- -- $ 340 $ 340 --
Class "E" shares........................ -- -- $ 0.005 $ 0.005 -- -- --
AMOUNTS UNDER U.S. GAAP
Sales..................................... $26,752 $32,853 $41,858 $18,340 $29,111
Net earnings for the period............... $ 3,356 $ 4,538 $ 5,901 $ 2,245 $ 3,526
Basic and diluted net earnings per
share................................... $ 0.09 $ 0.12 $ 0.15 $ 0.05 $ 0.09
Basic weighted average number of shares
used in per share calculations.......... 38,000 38,000 38,001 38,000 38,425
Dividends per share
Class "A" shares........................ $ 0.006 $ 0.006 -- -- $ 0.08 -- --
Class "C" shares........................ -- -- -- -- $ 333 $ 333 --
Class "E" shares........................ -- -- $ 0.006 $ 0.005 -- -- --
|
AS AT AUGUST 31, AS AT
-------------------------------------------------- FEB. 29,
1995 1996 1997 1998 1999 2000
------ ------- ------- ------- ------- --------
(IN THOUSANDS)
CONSOLIDATED BALANCE SHEETS DATA:
AMOUNTS UNDER CANADIAN GAAP
Cash and cash equivalents................. $1,022 $ 482 $ 354 $ 1,262 $ 423 $ 539
Working capital (1)....................... 2,293 3,550 5,973 9,797 12,745 13,578
Total assets.............................. 11,223 11,725 13,238 17,643 22,840 37,072
Long-term debt (excluding current
portion)................................ -- 40 20 -- -- 283
Shareholders' equity...................... $3,103 $ 4,674 $ 7,644 $12,045 $14,679 $19,048
AMOUNTS UNDER U.S. GAAP
Cash and cash equivalents................. $ 1,201 $ 423 $ 539
Working capital (2)....................... 9,179 12,781 13,685
Total assets.............................. 16,785 22,899 37,230
Long-term debt (excluding current
portion)................................ -- -- 283
Shareholders' equity...................... $11,318 $14,715 $19,155
|
(1) Includes 19,000,000 mandatorily redeemable preferred shares with a nominal carrying value as at August 31, 1997 and 1998 and 800,000 mandatorily redeemable preferred shares with a carrying value of $555,000 as at February 29, 2000.
(2) Includes 19,000,000 mandatorily redeemable preferred shares, with a nominal carrying value as at August 31, 1998 and 800,000 mandatorily redeemable preferred shares with a carrying value of $555,000 as at February 29, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes, which are included elsewhere in this prospectus.
OVERVIEW
EXFO was incorporated on September 18, 1985. We have expanded from a company that provided low cost handheld fiber-optic test and measurements instruments into a company that provides an extensive line of test, measurement and monitoring products. Our original products were focused primarily on the needs of installers and operators of fiber-optic networks. In 1996, we supplemented our product line with an extensive line of scientific products that is dedicated to the manufacturing and research and development markets in the fiber-optic industry. Our scientific products tend to be more complex and higher priced. In 1999, we entered the market for remote fiber test systems. Remote fiber test systems allow carriers to deploy monitoring equipment throughout their networks in order to monitor the status of their fiber-optic networks.
We sell our products to customers through our direct sales force and indirectly through distribution channels. For products where the software is incidental, we recognize sales when the products are delivered with appropriate provisions made for estimated returns, warranties and support obligations. For products where software is not incidental, sales are separated into two components, product sales and customer support sales. The product sales are recognized when the products are delivered with provisions made for estimated returns and warranties. The customer support sales are deferred based on prices for similar maintenance contracts and recognized ratably over the period of the support arrangement, except where support is provided within one year of delivery, costs of providing this support are insignificant and accrued at the time of delivery and no upgrades of software are provided.
We deliver products to a large number of customers. No customer accounted for more than 6.8% of total sales for the year ended August 31, 1999 or 5.5% of total sales for the six months ended February 29, 2000. During the twelve months ended May 31, 2000, we shipped and invoiced products within an average of 30 days after the acceptance of an order.
The market for fiber-optic test, measurement and monitoring instruments is highly competitive and we anticipate that the average selling prices of our existing products will decrease in future periods, although the timing and amount of these decreases cannot be predicted with any certainty. Those decreases in the average selling price may be offset by continued product improvement and new product introductions.
Cost of sales include raw materials, salaries and related expenses for direct and indirect manufacturing personnel and manufacturing overhead. Cost of sales may increase as a percentage of sales in future periods due to the high demand for fiber-optic components, our use of more sophisticated and complex fiber-optic components, as well as the planned expansion of our manufacturing facilities. However, this increase may be mitigated by increased purchasing power and productivity gains related to our expansion.
Our gross margin varies among our products and we expect that our overall gross margin will fluctuate from period to period as a result of shifts in product mix, anticipated decreases in average selling prices and our ability to introduce new products.
Gross research and development expenses consist primarily of salaries and related expenses for engineers and other technical personnel and fees paid to third-party consultants. We are entitled to research and development tax credits granted by the Canadian federal government and the government of the province of Quebec. Federal tax credits are earned on qualified Canadian research and development expenditures at a rate of 20% and can only be used to offset federal income taxes otherwise payable. Provincial tax credits, which are refundable, are earned on qualified research and development salaries in the province of Quebec at a rate of 20%. Additional refundable provincial research and development tax credits are earned at a rate of up to 20%. These additional tax credits are reduced to nil, on a pro-rata basis, as total assets increase from C$25.0 million to C$50.0 million. We are also entitled to government grants resulting from agreements entered into with the government of the province of Quebec. See "Liquidity and Capital Resources." Research and development tax
credits and certain government grants are recorded as a reduction of gross research and development expenses. We believe that continued investment in research and development is critical to our long-term success. We expect that our gross research and development expenses will increase with sales in future periods. The rate of research and development tax credits will decrease as our total assets continue to grow.
Selling and administrative expenses consist primarily of salaries and related expenses for personnel, sales commissions, travel expenses, marketing programs, professional services, management information systems, human resources and other corporate expenses. We intend to expand our sales organization by opening additional international sales offices and service centers. We expect that, in support of our continued growth, the expansion of our sales efforts and our operations as a public company, selling and administrative expenses will continue to increase with sales for the foreseeable future.
In February 2000, in order to expand our portfolio of test equipment, we acquired Nortech Fibronic Inc., a company specializing in fiber-optic testing and temperature sensing. In connection with the acquisition, we recorded $2.5 million of goodwill, which will be amortized over five years.
Our consolidated financial statements are prepared in accordance with Canadian GAAP, which differs in certain respects from U.S. GAAP. For a description of the material differences between Canadian GAAP and U.S. GAAP in regards to our consolidated financial statements, see note 21 to our consolidated financial statements included elsewhere in this prospectus. All dollar amounts are expressed in U.S. dollars. Effective September 1, 1999, we adopted the U.S. dollar as the reporting currency for our consolidated financial statements. The financial statements for all periods prior to fiscal 2000, are presented in U.S. dollars in accordance with a translation of convenience method under Canadian GAAP using the representative exchange rate as at August 31, 1999 of $1.00 = C$1.4958. The historical results below are not necessarily indicative of the results to be expected for any future period.
We believe that period-to-period comparisons of our historical operating results should not be relied upon as being a good indication of our future performance. Our prospects must be considered in light of the risks experienced by companies in new and rapidly evolving markets like ours. We cannot assure you that we will successfully address the risks and challenges that we face. Although we have experienced significant sales growth recently, we may not be able to sustain this trend. Furthermore, we may not achieve or maintain profitability in the future.
RESULTS OF OPERATIONS
The following table sets forth certain consolidated statements of earnings data as a percentage of sales for the periods indicated:
SIX MONTHS ENDED
YEARS ENDED AUGUST 31, ------------------
----------------------- FEB. 28 FEB. 29
1997 1998 1999 1999 2000
----- ----- ----- ------- -------
Sales........................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales................................... 39.4 35.9 35.6 37.5 33.0
----- ----- ----- ----- -----
Gross margin.................................... 60.6 64.1 64.4 62.5 67.0
Operating expenses
Selling and administrative.................... 32.0 31.3 31.5 31.8 34.1
Net research and development.................. 6.5 9.5 10.2 9.6 11.1
Amortization of capital and other assets...... 2.0 2.1 2.1 2.3 2.1
----- ----- ----- ----- -----
Earnings from operations........................ 20.1 21.2 20.6 18.8 19.7
Interest expense (income) -- net................ 0.4 (0.1) (0.3) (0.3) (0.1)
Foreign exchange loss (gain).................... 0.7 (0.4) 1.2 2.1 0.4
----- ----- ----- ----- -----
Earnings before income taxes and amortization
of goodwill................................... 19.0 21.7 19.7 17.0 19.4
Income taxes.................................... 6.5 7.5 5.9 5.1 6.5
----- ----- ----- ----- -----
Earnings before amortization of goodwill........ 12.5 14.2 13.8 11.9 12.9
Amortization of goodwill........................ -- -- -- -- 0.1
----- ----- ----- ----- -----
Net earnings for the period..................... 12.5% 14.2% 13.8% 11.9% 12.8%
===== ===== ===== ===== =====
Research and Development Data:
Gross research and development................ 11.2% 13.9% 15.2% 15.0% 16.1%
Net research and development.................. 6.5% 9.5% 10.2% 9.6% 11.1%
|
SIX MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO SIX MONTHS ENDED FEBRUARY 28,
1999
SALES
Sales increased 55.4% from $18.7 million for the six months ended February 28, 1999 to $29.1 million for the six months ended February 29, 2000. This growth was primarily due to the higher demand for our scientific products and a general increase in sales of our other products. Accepted orders increased 74.2% from $18.2 million for the six months ended February 28, 1999 to $31.7 million for the six months ended February 29, 2000.
GROSS MARGIN
Gross margin increased to 67.0% of sales for the six months ended February 29, 2000 from 62.5% of sales for the corresponding period in 1999. The improvement of the gross margin resulted primarily from increased economies of scale in our production process and from higher margin product sales. The expected expansion of our manufacturing capacity to address future volume growth may have an adverse impact on our gross margin until we can absorb the additional fixed manufacturing expenses through increased sales.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses increased to $9.9 million during the six months ended February 29, 2000 compared to $6.0 million for the corresponding period in 1999, an increase of 66.6%. As a percentage of sales, selling and administrative expenses amounted to 34.1% for the six months ended February 29, 2000 compared to 31.8% of sales for the six months ended February 28, 1999. The $3.9 million increase in selling and
administrative expenses reflects the hiring of additional sales, marketing and administrative personnel and commissions on higher sales volume.
RESEARCH AND DEVELOPMENT
Gross research and development expenses amounted to $4.7 million for the six months ended February 29, 2000 compared to $2.8 million for the corresponding period in 1999, an increase of 66.8%. As a percentage of sales, gross research and development expenses amounted to 16.1% for the six months ended February 29, 2000 compared to 15.0% for the corresponding period in 1999. The increase in gross research and development expenses reflects the hiring of additional research and development personnel and the outsourcing of non-critical research and development projects.
Tax credits and grants earned from federal and provincial governments for our research and development activities increased 43.9% to $1.5 million for the six months ended February 29, 2000 compared to $1.0 million for the six months ended February 28, 1999. Research and development tax credits and grants as a percentage of gross research and development expenses amounted to 31.4% for the six months ended February 29, 2000 compared to 36.4% for the six months ended February 28, 1999. The percentage decrease is due to the reduction of the rate of the government tax credits due to the growth in our total assets.
As a result of these factors, net research and development expenses increased 79.8% to $3.2 million for the six months ended February 29, 2000 compared to $1.8 million for the corresponding period in 1999. Net research and development expenses increased as a percentage of total sales to 11.1% for the six months ended February 29, 2000 compared to 9.6% for the six months ended February 28, 1999.
INCOME TAXES
Our effective tax rate amounted to 33.7% for the six months ended February 29, 2000 compared to 30.1% for the six months ended February 28, 1999. The increase is due to non-taxable items in the six months ended February 28,1999, which lowered the effective tax rate of that period.
YEAR ENDED AUGUST 31, 1999 COMPARED TO YEAR ENDED AUGUST 31, 1998
SALES
Sales increased 33.4% from $31.6 million in fiscal 1998 to $42.2 million in fiscal 1999. The increase in sales was due primarily to increased sales of our IQ-200 Optical Test System product and related modules and the overall growth in demand for test and measurement products.
GROSS MARGIN
Gross margin increased from 64.1% of sales in fiscal 1998 to 64.4% of sales in fiscal 1999. The improvement of the gross margin resulted primarily from increased economies of scale in our production process and increased sales of higher margin products.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses increased from $9.9 million in fiscal 1998 to $13.3 million in fiscal 1999, an increase of 34.2%. As a percentage of sales, selling and administrative expenses amounted to 31.5% in fiscal 1999 and 31.3% in fiscal 1998. The $3.4 million increase in fiscal 1999 reflects the hiring of additional sales personnel, product managers, marketing and administrative personnel, for the opening of offices in Asia and commissions on higher sales volume.
RESEARCH AND DEVELOPMENT
Gross research and development expenses amounted to $6.4 million in fiscal 1999 compared to $4.4 million in fiscal 1998, an increase of 45.0%. As a percentage of sales, gross research and development expenses amounted to 15.2% in fiscal 1999 and 13.9% in fiscal 1998. The increase in gross research and development
expenses, due primarily to additional personnel, reflects our continued focus on research and development activities.
Tax credits and grants earned from federal and provincial governments for our research and development activities increased 49.1% to $2.1 million in fiscal 1999 compared to $1.4 million in fiscal 1998. Research and development tax credits and grants as a percentage of gross research and development expenses amounted to 32.5% in fiscal 1999 compared to 31.6% in fiscal 1998.
As a result of these factors, net research and development expenses increased 43.2% to $4.3 million in fiscal 1999 compared to $3.0 million for fiscal 1998. Net research and development expenses increased as a percentage of total sales to 10.2% for fiscal 1999 compared to 9.5% for fiscal 1998.
INCOME TAXES
Our effective income tax rate decreased to 30.0% in fiscal 1999 compared to 34.4% in fiscal 1998. The decrease was due to non-taxable items in fiscal 1999.
YEAR ENDED AUGUST 31, 1998 COMPARED TO YEAR ENDED AUGUST 31, 1997
SALES
Sales increased 29.1% from $24.5 million in fiscal 1997 to $31.6 million in fiscal 1998. The increase in sales was primarily due to increased unit sales of our IQ-200 Optical Test System product and related modules and the overall growth in sales for test and measurement products.
GROSS MARGIN
Gross margin increased from 60.6% of sales in fiscal 1997 to 64.1% of sales in fiscal 1998. The gross margin increase is due primarily to a reduction in raw materials costs obtained by renegotiating supplier arrangements and by aggregating the number of our suppliers.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses increased from $7.8 million in fiscal 1997 to $9.9 million in fiscal 1998, an increase of 26.5%. As a percentage of sales, selling and administrative expenses amounted to 31.3% in fiscal 1998 compared to 32.0% in fiscal 1997. The increase of $2.1 million in 1998 reflects the hiring of additional sales personnel, product managers, marketing and administrative personnel and commissions on higher sales volume.
RESEARCH AND DEVELOPMENT
Gross research and development expenses amounted to $4.4 million in fiscal 1998 compared to $2.8 million in fiscal 1997, an increase of 60.0%. As a percentage of sales, gross research and development expenses amounted to 13.9% in fiscal 1998 and 11.2% in fiscal 1997. The increase in gross research and development expenses, primarily due to additional personnel, reflects our continued focus on research and development activities.
Tax credits and grants earned from federal and provincial governments for our research and development activities increased 19.9% to $1.4 million in fiscal 1998 compared to $1.2 million in fiscal 1997. Research and development tax credits and grants as a percentage of gross research and development expenses amounted to 31.6% in fiscal 1998 compared to 42.2% in fiscal 1997. The percentage decrease is due to the reduction of the rate of government tax credits due to the growth in our total assets.
As a result of these factors, net research and development expenses increased 89.3% to $3.0 million for fiscal 1998 compared to $1.6 million for fiscal 1997. Net research and development expenses increased as a percentage of sales to 9.5% for fiscal 1998 compared to 6.5% for fiscal 1997.
INCOME TAXES
Our effective income tax rate remained relatively constant at 34.4% in fiscal 1998 compared to 34.0% in fiscal 1997.
QUARTERLY RESULTS OF OPERATIONS
The following tables set forth unaudited quarterly results prepared in accordance with Canadian GAAP for the ten fiscal quarters ended February 29, 2000, as well as such data expressed as a percentage of sales for each quarter. This information has been presented on the same basis as our audited consolidated financial statements included elsewhere in this prospectus and, in our opinion, includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary to present fairly the unaudited quarterly results. This information should be read in conjunction with our audited consolidated financial statements and the related notes appearing elsewhere in this prospectus. The operating results for any quarter are not necessarily indicative of results for any future period.
THREE MONTHS ENDED
-----------------------------------------------------------------------------------
NOV. 30, FEB. 28, MAY 31, AUG. 31, NOV. 30, FEB. 28, MAY 31, AUG. 31,
1997 1998 1998 1998 1998 1999 1999 1999
-------- -------- ------- -------- -------- -------- ------- --------
(IN THOUSANDS)
CONSOLIDATED STATEMENTS OF
EARNINGS
Sales.......................... $7,115 $7,486 $10,069 $6,935 $9,124 $9,604 $10,916 $12,522
Cost of sales.................. 2,400 2,421 3,980 2,544 3,402 3,619 3,753 4,224
------ ------ ------- ------ ------ ------ ------- -------
Gross margin................... 4,715 5,065 6,089 4,391 5,722 5,985 7,163 8,298
Operating expenses
Selling and administrative... 2,190 2,458 2,448 2,801 2,799 3,165 3,465 3,850
Net research and
development................ 571 520 972 951 833 958 1,058 1,466
Amortization of capital and
other assets............... 149 163 181 165 200 222 223 253
------ ------ ------- ------ ------ ------ ------- -------
Total operating expenses... 2,910 3,141 3,601 3,917 3,832 4,345 4,746 5,569
Earnings from operations....... 1,805 1,924 2,488 474 1,890 1,640 2,417 2,729
Interest expense (income) --
net.......................... 10 (5) (18) (27) (24) (22) (33) (57)
Foreign exchange loss (gain)... (43) 33 13 (129) 204 194 102 6
------ ------ ------- ------ ------ ------ ------- -------
Earnings before income taxes
and amortization of
goodwill..................... 1,838 1,896 2,493 630 1,710 1,468 2,348 2,780
Income taxes................... 623 641 858 234 535 423 725 809
------ ------ ------- ------ ------ ------ ------- -------
Earnings before amortization of
goodwill..................... 1,215 1,255 1,635 396 1,175 1,045 1,623 1,971
Amortization of goodwill....... -- -- -- -- -- -- -- --
------ ------ ------- ------ ------ ------ ------- -------
Net earnings for the period.... $1,215 $1,255 $ 1,635 $ 396 $1,175 $1,045 $ 1,623 $ 1,971
====== ====== ======= ====== ====== ====== ======= =======
THREE MONTHS ENDED
-------------------
NOV. 30, FEB. 29,
1999 2000
-------- --------
(IN THOUSANDS)
CONSOLIDATED STATEMENTS OF
EARNINGS
Sales.......................... $11,688 $17,423
Cost of sales.................. 3,733 5,876
------- -------
Gross margin................... 7,955 11,547
Operating expenses
Selling and administrative... 4,119 5,819
Net research and
development................ 1,462 1,759
Amortization of capital and
other assets............... 282 329
------- -------
Total operating expenses... 5,863 7,907
Earnings from operations....... 2,092 3,640
Interest expense (income) --
net.......................... (22) (3)
Foreign exchange loss (gain)... 236 (120)
------- -------
Earnings before income taxes
and amortization of
goodwill..................... 1,878 3,763
Income taxes................... 578 1,309
------- -------
Earnings before amortization of
goodwill..................... 1,300 2,454
Amortization of goodwill....... -- 42
------- -------
Net earnings for the period.... $ 1,300 $ 2,412
======= =======
|
THREE MONTHS ENDED
-----------------------------------------------------------------------------------
NOV. 30, FEB. 28, MAY 31, AUG. 31, NOV. 30, FEB. 28, MAY 31, AUG. 31,
1997 1998 1998 1998 1998 1999 1999 1999
-------- -------- ------- -------- -------- -------- ------- --------
CONSOLIDATED STATEMENTS OF
EARNINGS AS A PERCENTAGE OF SALES
Sales............................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales.................... 33.7 32.3 39.5 36.7 37.3 32.7 34.4 33.7
----- ----- ----- ----- ----- ----- ----- -----
Gross margin..................... 66.3 67.7 60.5 63.3 62.7 62.3 65.6 66.3
Operating expenses
Selling and administrative..... 30.8 32.8 24.3 40.4 30.7 32.9 31.8 30.8
Net research and development... 8.0 7.0 9.7 13.7 9.1 10.0 9.7 11.7
Amortization of capital and other
assets......................... 2.1 2.2 1.8 2.4 2.2 2.3 2.0 2.0
----- ----- ----- ----- ----- ----- ----- -----
Total operating expenses..... 40.9 42.0 35.8 56.5 42.0 45.2 43.5 44.5
Earnings from operations......... 25.4 25.7 24.7 6.8 20.7 17.1 22.1 22.8
Interest expense (income) --
net............................ 0.1 (0.0) (0.1) (0.4) (0.3) (0.2) (0.3) (0.5)
Foreign exchange loss (gain)..... (0.6) 0.4 0.1 (1.9) 2.2 2.0 0.9 0.1
----- ----- ----- ----- ----- ----- ----- -----
Earnings before income taxes and
amortization of goodwill....... 25.9 25.3 24.7 9.1 18.8 15.3 21.5 22.2
Income taxes..................... 8.8 8.5 8.5 3.4 5.9 4.4 6.6 6.5
----- ----- ----- ----- ----- ----- ----- -----
Earnings before amortization of
goodwill....................... 17.1 16.8 16.2 5.7 12.9 10.9 14.9 15.7
Amortization of goodwill......... -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Net earnings for the period...... 17.1% 16.8% 16.2% 5.7% 12.9% 10.9% 14.9% 15.7%
===== ===== ===== ===== ===== ===== ===== =====
THREE MONTHS ENDED
-------------------
NOV. 30, FEB. 29,
1999 2000
-------- --------
CONSOLIDATED STATEMENTS OF
EARNINGS AS A PERCENTAGE OF SALES
Sales............................ 100.0% 100.0%
Cost of sales.................... 31.9 33.7
----- -----
Gross margin..................... 68.1 66.3
Operating expenses
Selling and administrative..... 35.2 33.4
Net research and development... 12.5 10.1
Amortization of capital and other
assets......................... 2.5 1.9
----- -----
Total operating expenses..... 50.2 45.4
Earnings from operations......... 17.9 20.9
Interest expense (income) --
net............................ (0.2) (0.0)
Foreign exchange loss (gain)..... 2.0 (0.7)
----- -----
Earnings before income taxes and
amortization of goodwill....... 16.1 21.6
Income taxes..................... 5.0 7.5
----- -----
Earnings before amortization of
goodwill....................... 11.1 14.1
Amortization of goodwill......... -- 0.3
----- -----
Net earnings for the period...... 11.1% 13.8%
===== =====
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Quarterly sales figures have varied in the past and may continue to vary significantly in the future. From time to time, we receive large orders which require us to build significant inventories to aggregate for shipment. For example, in the three months ended May 31, 1998, a large order of portable products was delivered, explaining the high level of sales achieved in that quarter. Change in demand for our products may also cause fluctuations quarter-over-quarter. For example, the increased demand for our scientific products generally explained the increase in sales for the three months ended February 29, 2000. Other factors that may cause quarter-over-quarter fluctuations in sales include:
- timing of sales;
- timing of customer orders;
- delivery date requested by the customer;
- unexpected delay in introducing new products;
- shortage in raw materials supply;
- delay in ramping up our manufacturing for high demand products;
- cancellation of orders by our customers;
- customers' capital budgets available for purchasing our products; and
- competitors' products and prices.
Consequently, these fluctuations in sales can cause significant fluctuations in our gross margin as well as quarterly earnings.
Gross margin has also varied in the past and may continue to vary significantly in the future depending on the mix of products sold, our capacity to introduce new products with higher margins, our ability to achieve economies of scale in our production process, the impact of large orders with reduced margins, fluctuations in raw materials costs and increases in personnel costs. For nine of the ten quarters, the gross margins were in a range of 62.3% to 68.1%. Gross margins for the quarter ended May 31, 1998 was 60.5%, due to the delivery in March 1998 of a large order of portable products with lower margins.
As a result of the factors listed above and elsewhere in the "Risk Factors" section of this prospectus, it is possible that in some future periods our results of operations may fall below our expectations as well as the expectations of public market analysts and investors. In addition, we plan to significantly increase our operating expenses to expand our manufacturing, sales and marketing, customers support, administration and research and development activities. If sales fall below our expectations in any quarter and we are unable to reduce our spending appropriately, our operating results would be lower than expected.
LIQUIDITY AND CAPITAL RESOURCES
Since our inception, we have financed operations and met our capital expenditure requirements primarily through cash flows from our operations, research and development tax credits and government grants. Cash flows from operating activities were $4.6 million for fiscal 1997, $3.2 million for fiscal 1998 and $3.7 million for fiscal 1999. Cash flows used for operating activities were $2.1 million for the six months ended February 29, 2000, reflecting the large increase in accounts receivable and inventories. The increase in accounts receivable is in line with the increase in sales in the quarter ended February 29, 2000. Increased levels of inventory were required to service this growth in sales as well as the expected growth in future sales. As at February 29, 2000, we had cash and cash equivalents of $539,000 and working capital of $13.6 million.
Net cash used in investing activities was $1.6 million for fiscal 1997, compared to $2.0 million for fiscal 1998, $1.2 million for fiscal 1999 and $2.3 million for the six months ended February 29, 2000. The cash used in fiscal 1997, 1998 and 1999 was primarily for capital expenditures and short-term investments. The cash used for the six months ended February 29, 2000 was primarily for capital expenditures and the Nortech Fibronic Inc. acquisition. On February 4, 2000, we acquired Nortech Fibronic Inc., for a total consideration of approximately C$4.1 million of which approximately C$3.0 million was paid in cash, C$800,000 of which was paid by the issuance of Class "G" shares of EXFO, which will be converted into preferred shares series 1 prior to the closing of this offering and of which C$200,000 was paid by a non-interest-bearing debenture payable in November 2000. We currently have a commitment to purchase a building located in Vanier, Quebec for C$4.9 million and expect to make additional capital expenditures in fiscal 2000 of approximately $5.8 million, primarily for improvements to the building being acquired, the acquisition of production equipment, the acquisition of research and development equipment and new management information systems.
Net cash used in financing activities are primarily due to dividends paid in fiscal 1999 and fiscal 1998 and to dividends paid and repayments of bank advances and long-term debt in fiscal 1997. The total amount of bank advances outstanding increased to $5.4 million as at February 29, 2000 compared to nil at August 31, 1999. This substantial increase is due in part to the acquisition of Nortech Fibronic Inc., for which we used approximately $2.1 million under our operating loan facility. The balance of the increase results form advances drawn under our available lines of credit in order to finance working capital requirements, namely inventories and accounts receivable. In addition, we expect to declare a dividend of C$26.0 million (approximately $17.6 million) immediately prior to the closing of this offering. We do not expect to pay any additional dividends for at least the next three years.
Pursuant to an agreement with the Quebec Minister of Industry, Commerce, Science and Technology, the Minister agreed to provide grants for job creation up to a maximum of approximately C$2.2 million over the period from January 1, 1998 through December 31, 2002. These grants are payable based on the number of full time jobs created during the period. In addition the Minister agreed to contribute grants, up to a maximum of C$600,000 towards interest costs incurred for the period from January 1, 1998 through December 31, 2002. Among other conditions, each job created must be maintained for a minimum period of five years from the date of hire. Should this or other conditions not be met, the Minister may enforce various recourse options including suspension or cancellation of the agreement or repayment of amounts received by us. See "Risk Factors -- We may not be able to sustain our research and development activities as our research and development credits and grants decline" and "Risk Factors -- Unexpected declines in our research and development credits and grants may have an adverse effect on our business."
We have available credit facilities that provide for advances of up to C$11.5 million under lines of credit and C$3.0 million as an operating loan. These facilities, which must be renewable annually, bear interest at margins
over prime rate ranging between nil and 1.25%. Accounts receivable, inventories and all tangible and intangible assets have been pledged as security against these facilities. As at February 29, 2000, an amount of C$7.7 million has been drawn against the facilities. The interest rate of credit facilities drawn in Canadian dollars is the Canadian prime rate (7.5% as at June 7, 2000) and the credit facilities drawn in United States dollars is the U.S. prime rate (10.0% as at June 7, 2000).
We expect to devote substantial resources to continue our research and development efforts, expand our sales, support, marketing and product development organizations, expand internationally and build the infrastructure necessary to support our growth. As a result, we anticipate that capital expenditures will continue to increase in absolute dollars for at least the next three years. We believe that the net proceeds from this offering, together with our current cash and cash equivalents, will be sufficient to fund our operations for at least the next 12 months. Prior to or following the end of this period, we may need or choose to raise additional funds or seek other financing arrangements in order to facilitate more rapid expansion, including significant increases in personnel and office facilities, to develop new or enhance existing products or services, to respond to competitive pressures, or to acquire or invest in complementary businesses, technologies, services or products. In the event that additional financing is required, we may not be able to raise it on acceptable terms or at all.
NEW ACCOUNTING STANDARDS
In 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". The standard, which must be applied prospectively, is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. Under SFAS No. 133, all of our forward exchange contracts would be carried on the balance sheet at fair value and any unrealized gains or losses at each balance sheet date would be included in other comprehensive income.
On December 3, 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB")101, "Revenue Recognition." SAB 101, as amended by SAB 101A, is effective commencing in the first fiscal quarter of the first fiscal year beginning after December 15, 1999. The implementation of this SAB is not expected to have any material effect on our financial statements or revenue recognition policy on future periods.
MARKET RISK
Currency Risks
We are exposed to currency risk as a result of our export of products manufactured in Canada, substantially all of which are denominated in U.S. dollars. Our exposure to foreign exchange rate fluctuations is partially hedged by operating expenses of our U.S. and European subsidiaries and the portion of our raw materials purchased which are denominated in U.S. dollars. In addition, we frequently enter into forward exchange contracts to sell U.S. dollars at fixed forward rates in exchange for Canadian dollars in order to manage the risk of exchange rate fluctuations between the Canadian and U.S. dollars on cash flows related to anticipated future revenue streams and firmly committed future sales transactions denominated in U.S. dollars. We do not enter into forward exchange contracts for trading purposes.
The following table summarizes the forward exchange contracts in effect as at February 29, 2000, classified by expected transaction dates, none of which exceed two years. The table below presents the notional amounts of such contracts (in thousands of dollars) along with the weighted average contractual forward rates under such contracts. The notional amounts of such contracts are used to calculate the contractual payments to be exchanged under these contracts.
YEARS ENDING
AUGUST 31,
----------------
2000 2001
------ ------
Forward exchange contracts to sell U.S. dollars in exchange
for Canadian dollars
Contractual amounts....................................... $3,000 $4,600
Weighted average contractual exchange rates............... 1.5010 1.4898
------ ------
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Interest Rate Risks
The table below presents information about our financial instruments that are sensitive to changes in interest rates, including debt instruments. For debt instruments, the table presents the expected cash flows related to future principal repayments and the related interest rates. Debt instruments that are due on demand have been assumed to fall due during the year ending August 31, 2000. The table presents such debt instruments, which are all denominated in Canadian dollars, presented in U.S. dollars using the prevailing exchange rate as at February 29, 2000 of $1.00 = C$1.4403. Effective interest rates disclosed below for instruments which bear interest at variable rates are those in effect as at February 29, 2000.
YEARS ENDING AUGUST 31,
------------------------------
2000 2001 2002 2003
------ ---- ---- ----
(IN THOUSANDS EXCEPT
PERCENTAGE)
Non-interest-bearing debt (excluding trade liabilities and
deferred grants, including mandatorily redeemable
preferred shares)........................................ $ 704 $ 20 $ 19 --
Loan from company under common control..................... $1,388 -- -- --
Effective interest rate.................................. 7.75%
Variable interest rate debt................................ $ 98 $182 $129 $36
Effective interest rate.................................. 8.28%
Bank advances.............................................. 5,351 -- -- --
Effective interest rate.................................. 6.83%
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Fair Value
As at February 29, 2000, financial instruments whose fair value approximate their carrying value include cash and cash equivalents, accounts receivable, bank advances, accounts payable and accrued liabilities, dividends payable, mandatorily redeemable preferred shares, loan from a company under common control, and long-term debt.
The fair value of the forward exchange contracts as at February 29, 2000, based on the prevailing exchange rate at that date of $1.00 = C$1.4403, amounted to C$10.9 million compared to a contractual value of C$11.4 million, resulting in an unrealized gain of C$409,800 (approximately $285,000).
CORPORATE INFORMATION
CORPORATE HISTORY
EXFO was incorporated on September 18, 1985 pursuant to the Canada Business Corporations Act. Since that date, we have amended our articles on various occasions:
- on August 9, 1996, to add the English version of EXFO Electro-Optical Engineering Inc. to our name;
- on August 31, 1998, to change our name from Ingenierie Electro-Optique EXFO Inc./EXFO Electro-Optical Engineering Inc. to EXFO Ingenierie Electro-Optique Inc./EXFO Electro-Optical Engineering Inc. and to create the Class "F" shares;
- on September 2, 1998, to effect a split of our Class "A" shares;
- on September 3, 1998 to effect a split of our Class "E" shares and to convert our Class "E" shares into Class "A" shares;
- on February 7, 2000, to create our Class "G" shares;
- on April 13, 2000, to amend our articles of incorporation in order to:
-- repeal pre-emptive rights in favor of our shareholders;
-- repeal our right to have a lien over shares of shareholders who are indebted to us;
-- amend the rights of the holders of Class "F" shares; and
-- repeal rights of first refusal in favor of our shareholders; and
- on June 8, 2000, to amend our articles of incorporation in order to:
-- eliminate the private-company restrictions; and
-- provide for a board of directors of a minimum of three and a maximum of 12 directors.
Prior to the closing of this offering, we will file articles of amendment to create a class of multiple voting shares, a class of subordinate voting shares and a class of preferred shares issuable in series and to exchange the Class "A" shares into multiple voting shares, the Class "F" shares into subordinate voting shares and the Class "G" shares into preferred shares series 1.
In 1996, GEXFO Investissements Technologiques inc., a company controlled by Germain Lamonde, acquired a majority interest in GAP Optique S.A., a Swiss limited liability company carrying out activities in the field of fiber-optic testing and measurement technology. In 1996, GEXFO, EXFO, GAP Optique and the University of Geneva entered into agreements whereby GAP Optique, EXFO and GEXFO obtained worldwide exclusive rights to commercially develop, manufacture and market specified technologies relating to fiber-optic telecommunications testing and measurement instruments developed by the University of Geneva. In addition, GAP Optique, EXFO and GEXFO acquired priority rights over the marketing of fiber-optic telecommunication testing and measurement instruments prototypes designed by the University of Geneva. This agreement was renegotiated under similar terms and conditions in 1999 for a five-year term. On June 1, 2000, we acquired the 85% interest held by GEXFO in GAP Optique for a consideration equal to its book value of approximately $16,000 and GEXFO transfered all of its rights in the agreements to us.
In February 2000, we acquired all of the shares of Nortech Fibronic Inc., a company specializing in fiber-optic testing and temperature-sensing for a total consideration of $2.8 million of which $2.1 million was paid in cash. We also issued C$800,000 (approximately $541,000) of Class "G" shares and a debenture of C$200,000 (approximately $135,000) bearing no interest and payable on November 30, 2000.
CAPITAL REORGANIZATION
As of June 8, 2000, our authorized share capital was composed of an unlimited number of Class "A" shares, Class "B" shares, Class "C" shares, Class "D" shares, Class "E" shares, Class "F" shares and Class "G" shares, of which 38,000,000 Class "A" shares, 709,605 Class "F" shares and 800,000 Class "G" shares were issued and outstanding.
Prior to the closing of this offering, we will modify our authorized share capital to:
- an unlimited number of subordinate voting shares without par value;
- an unlimited number of multiple voting shares without par value; and
- an unlimited number of preferred shares without par value, issuable in series.
As a result of the reorganization:
- the 38,000,000 Class "A" shares will be exchanged into 38,000,000 multiple voting shares;
- the 709,605 Class "F" shares will be exchanged into 709,605 subordinate voting shares; and
- the 800,000 Class "G" shares will be exchanged into 800,000 preferred shares series 1.
The exchange of Class "A" shares into multiple voting shares, of Class "F" shares into subordinate voting shares and of Class "G" shares into preferred shares series 1 is part of the capital reorganization and will not involve any disbursement of funds. Likewise, the conversion of the preferred shares series 1 will not involve any disbursement of funds and is based on a predetermined formula. See "Description of Share Capital -- Preferred Shares Series 1."
CORPORATE STRUCTURE
The following chart presents our corporate structure, the jurisdiction of incorporation of our subsidiaries and the percentage of shares that we hold in those subsidiaries.
|
-------------------------------------------------------------------
| 85% | 100% | 100%
---------------------- ---------------------- ---------------------
GAP Optique S.A. GEXFO Distribution Nortech Fibronic Inc.
(Switzerland) Internationale Inc. (Canada)
(Quebec)
---------------------- ---------------------- ----------------------
| |
----------------------------- |
| | |
| 100% | 100% | 100%
---------------------- ---------------------- ----------------------
EXFO Europe S.A.R.L. EXFO America Inc. Nortech Fibronic Inc.
(France) (Delaware) (Texas)
---------------------- ----------------------- ----------------------
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BUSINESS
OVERVIEW
We are a leading designer, manufacturer and marketer of fiber-optic test, measurement and monitoring instruments for the telecommunications industry. We believe that we are the largest manufacturer of test, measurement and monitoring instruments that is exclusively dedicated to fiber optics. Fiber-optic test, measurement and monitoring equipment is mainly used by optical network carriers, manufacturers, and research and development laboratories to measure the physical characteristics of optical fiber and related hardware.
EXFO was founded in 1985 in Quebec City. We have grown from a two-employee supplier of portable handheld test instruments to a leading designer, manufacturer and marketer of an extensive line of fiber-optic test, measurement and monitoring instruments. We currently employ more than 650 employees and our products are distributed in over 70 countries. We have been profitable each year of our 15-year existence.
We develop products principally for two markets. Our Portable and Monitoring Division provides solutions primarily to telecommunications carriers, cable television companies, public utilities, private network operators, as well as third-party installers and equipment rental companies. Our Scientific Division, established in 1996, designs an extensive line of more sophisticated and higher performance instruments for manufacturers of optical components, value-added optical modules and optical networking systems. Our Scientific Division also designs products for research and development markets. We leverage technologies that we develop for our Scientific Division into products for our Portable and Monitoring Division.
In 1999, we released the first version of our remote fiber test system, which surveys and monitors a fiber-optic network. Our remote fiber test system consists of rack-mounted remote test units, which are strategically deployed along a fiber-optic network and a test system controller that retrieves information from as many remote test units as required. The test system controller is typically located inside a network operations center. The information obtained from these remote test units is combined with data from a geographic information system in our software to pinpoint the exact location of a system failure.
We have received 40 industry and commerce awards. Every year since 1995, we have been recognized as one of the 50 Best-Managed Private Companies in Canada by Arthur Andersen Consulting and the Financial Post. We have maintained ISO 9001 certification since 1994.
INDUSTRY OVERVIEW
Optical Networking Market
The past decade has witnessed an explosive growth in the volume of data traffic largely due to the soaring popularity of the Internet and related bandwidth-intensive applications. According to the Angus Reid Group, a leading market research company, the number of Internet users around the world is expected to increase from 300 million in early 2000 to 1 billion by 2005. Ryan, Hankin & Kent, a leading telecom market research firm, forecasts that Internet traffic will increase from 350,000 terabytes, or trillions of bytes, per month at the end of 1999 to more than 15 million terabytes per month in 2003, representing a compound annual average growth rate of 156%.
The dramatic increase in Internet users and traffic has created a tremendous need for high-bandwidth communications networks. To meet this increasing demand for bandwidth, many communications service providers are designing and installing new networks based on optical fiber, deploying additional fiber within their existing networks, or using advances in optical technology such as dense wavelength division multiplexing, or DWDM. DWDM involves combining beams of light of slightly different wavelengths through a single fiber, with each wavelength carrying its own stream of information. This technique requires separate laser sources for each signal or channel and more complex equipment to control and amplify the signal in the network. Some DWDM systems can carry as many as 160 separate channels per optical fiber. According to Ryan, Hankin & Kent, the global DWDM and optical networking market is expected to increase from $13 billion in 2000 to $41 billion in 2003.
Until recently, most of the fiber deployed had been dedicated to long-haul and inter-office networks. The fiber-optic industry, however, is beginning to shift its focus towards more complex metropolitan networks for
business-to-business applications and fiber-to-the-curb networks for residential applications. These networks require more complex optical systems than long-haul and inter-office networks.
Manufacturers are finding it difficult to keep pace with carrier demand for optical fiber and optical networking equipment. At the end of 1999, 22.7 million kilometers of fiber had been deployed in North America alone and this figure is expected to reach 68.1 million kilometers by 2004, according to Kessler Marketing Intelligence, a leading fiber-optic market research company. Corning Incorporated, a world-leading manufacturer of optical fiber, announced earlier this year that it plans to invest $750 million in order to expand its optical fiber manufacturing capacity by 50%. Nortel Networks Corporation, a leading supplier of DWDM equipment, announced in November 1999 that it will invest $400 million to triple its manufacturing capacity of high-performance optical Internet systems.
Optical Test, Measurement and Monitoring Equipment Market
Conventional test, measurement and monitoring instruments used by telecommunications carriers and manufacturers of communications equipment were designed for electrical transmission systems and are unsuitable for optical networking. Unlike traditional electrical transmission systems, which transmit electrical signals along copper wires, fiber-optic transmission systems use pulses of light along glass or plastic fiber, often referred to as optical fiber. When light travels along optical fiber and through the optical components and systems that link, optical fibers together, it is subject to unwanted effects such as reflection, attenuation, noise and various types of dispersion, all of which degrade signal quality and reduce transmission performance. Fiber-optic test, measurement and monitoring equipment is critical for measuring these effects and helping communications carriers and manufacturers of optical components, value-added optical modules and optical networking systems ensure network performance and reliability. The following are the main uses for fiber-optic test, measurement and monitoring equipment:
- NETWORK INSTALLATION. Carriers and third-party network installers use test and measurement instruments to ensure the quality of networks as they are being deployed.
- NETWORK MAINTENANCE AND REPAIR. Carriers and third-party service companies use test and measurement instruments to diagnose and repair problems within an optical network.
- NETWORK MONITORING. By continually monitoring the quality of an optical signal as it passes through a network, carriers can reduce downtime through faster detection and diagnosis of network problems.
- MANUFACTURING. Manufacturers in the fiber-optic industry use test measurement equipment during production and assembly as well as for quality control and conformity testing.
- RESEARCH AND DEVELOPMENT. Developers and manufacturers in the fiber-optic industry require sophisticated test and measurement equipment during the prototyping stage of product development.
MARKET OPPORTUNITY
Demand for fiber-optic test, measurement and monitoring equipment is driven by the following key trends:
INCREASED PRODUCTION OF CABLE AND FIBER. Cable and fiber manufacturers are increasing production of optical fiber in order to meet the growing demand from telecommunications carriers. Manufacturers of optical fiber require additional test and measurement equipment to fulfill their product development and quality control requirements. Fiber and cable manufacturers require improved test and measurement instruments as they develop better products to respond to the demand for increased transmission speeds and higher DWDM channel counts.
QUALIFICATION OF EXISTING PLANTS AND FURTHER DEPLOYMENT OF FIBER. Carriers are upgrading their existing fiber networks, deploying more fiber and using more advanced optical transmission technologies, such as DWDM, to handle the increased demand for bandwidth. Test, measurement and monitoring equipment is required for the qualification of existing fiber plants; for the installation, maintenance and troubleshooting of newly deployed fiber and for the installation and verification of DWDM networks.
MORE COMPLEX OPTICAL NETWORKS. The trend towards more complex optical
networks has rendered test, measurement and monitoring increasingly important.
First-generation fiber-optic networks carried only one wavelength and demanded
simpler loss measurements. Rapid advances in fiber-optic data transmission are
producing networks with higher data speeds, higher power transmission lasers,
greater distances without
reamplification, more narrowly spaced DWDM channels and higher channel counts. Optical equipment used in these new and more complex networks requires the verification of several parameters for each DWDM wavelength and has created a demand for more complex test, measurement and monitoring instruments.
CONTINUED WORLDWIDE TELECOMMUNICATIONS DEREGULATION. Continued deregulation of telecommunications markets has forced many carriers to upgrade their networks to compete for customers. In order to compete, carriers must offer services to provide increased bandwidth with greater reliability, while at the same time reducing costs. To respond to these market conditions, carriers are increasingly using sophisticated test, measurement and monitoring equipment to ensure network quality, as fiber networks are being deployed and to reduce restoration time for operating networks.
GROWING USE OF CUSTOMIZED AUTOMATED TEST SYSTEMS. Optical components, value-added optical modules and optical networking systems are typically assembled and aligned by hand. This task involves the extensive use of optical measurement during the manufacturing and assembly process as well as during final testing and certification. As systems become more complex, the number of individual tests that must be performed increases dramatically. Testing and certification procedures represent a significant portion of the total time required to manufacture optical components, value-added optical modules and optical networking systems. As a result, manufacturers are continually looking for ways to automate their test and certification procedures. Although optical components, value-added optical module and optical networking systems manufacturers have typically integrated commercially available test instruments into customized, automated test systems in-house, they are increasingly turning to third-party test and measurement manufacturers to provide innovative solutions, so that they can focus scarce technical resources on product development and production.
MORE STRINGENT INDUSTRY REQUIREMENTS. Industry standards committees, such as the Telecommunication Industry Association, International Electrotechnical Commission and International Telecommunications Union, are adopting more stringent technical specifications to address increased transmission rates, greater power and higher channel counts being demanded by the industry. Manufacturers of optical components, value-added optical modules and optical networking systems, as well as network carriers and installers, all require improved test, measurement and monitoring solutions to meet the demands of advanced optical networks.
THE EXFO SOLUTION
We believe that we offer the most extensive range of products in the fiber-optic test, measurement and monitoring industry. Our success has been largely based on our exclusive focus on fiber-optic test, measurement and monitoring instruments. We have developed optical technologies and advanced testing algorithms that we leverage across our various product lines.
The success of our solution is based on the following key attributes:
MODULAR SYSTEM DESIGN. In 1996, we introduced the first products designed around our modular system design. These system designs consist of Windows-based platform that can accommodate several data acquisition test modules. We have since developed products for each of our divisions based on the same modular design. Our modular design provides the following advantages:
- Unlike stand-alone units, new test modules can be rapidly developed to address the changing requirements of the industry.
- As customers' testing requirements change, they can purchase additional modules that are compatible with their previously purchased platforms, thus protecting their initial investments.
- Our standard graphical user interface reduces training costs because customers are familiar with previously acquired software products.
- The flexibility of our systems allows customers to develop customized and automated solutions directed at specific testing requirements.
The diagram below illustrates our modular system design:
[Diagram representing test platform, test modules and typical applications]
HIGH DEGREE OF TECHNOLOGICAL INNOVATION. We have continually been at the forefront of fiber-optic test, measurement and monitoring technology. For example, we were the first in our industry to develop and commercialize a number of fiber-optic test and measurement products:
- All-in-one loss test set. In 1992, we launched the first handheld unit for automated bidirectional loss testing. This rugged and compact loss test set combined four high-performance instruments in a single unit. The all-in-one loss test set, based upon our patented technology, allowed the user to save a considerable amount of time in the field. In 1997, we released a second-generation of this product which combines six instruments in a single unit.
- Portable modular platform. In 1996, we released the FTB-300 Universal Test System, which was the first portable test platform in our industry based on a modular design. This portable modular platform, which includes multiple optical testing technologies, enables the user to carry out numerous test operations for outside plant installation, maintenance and troubleshooting applications.
- Portable polarization mode dispersion analyzer. In 1996, we introduced the industry's first handheld polarization mode dispersion analyzer. Polarization mode dispersion is a physical phenomenon inherent to optical fiber and other optical components that causes a spreading of light pulses as they travel along a fiber, thus degrading the transmission signal.
PRODUCTS OF HIGH QUALITY. Product quality is an integral part of our solution. We have implemented a comprehensive quality assurance program, which has been certified ISO 9001 since 1994. Our products meet industry standards, such as those set by Telcordia, formerly Bellcore, an industry-leading standards body. During manufacturing, each product has a related quality assurance plan, with rigorous checkpoints, to reduce defects to a minimum. More than 40 people are dedicated to various tasks in the quality assurance process including quality control, conformity testing, product documentation, product improvement, regulatory compliance, metrology and calibration.
SUPERIOR CUSTOMER SUPPORT. We use highly qualified and specialized internal groups to offer pre-sales evaluation, installation, channel and customer training, communications and post-sales support. We believe that this approach provides us with an advantage over our competitors, who often outsource some of these functions. Our inside sales group is mainly responsible for supporting our sales force, selecting instruments that best match our customers' testing, measurement and monitoring needs and for providing detailed quotations. Our customer support group manages three main tasks: order processing, technical support and training and calibration and repair services. Furthermore, our communications and marketing group, which operates like an internal advertising agency, educates our customers and our sales force by providing detailed marketing and technical information. Literature includes specification sheets, application notes, media releases, product catalogues and a bi-monthly corporate newsletter. Finally, our writing services group, which consists of more than 15 university-trained professionals, provides technical writing for product instruction manuals and online help. We translate most of our documentation in seven different languages.
OUR STRATEGY
We intend to expand our leadership position in the fiber-optic test, measurement and monitoring industry and to increase our market share through the following initiatives:
EXPAND TECHNOLOGICAL LEADERSHIP. We believe that our ultimate success will depend on our ability to introduce enhanced products that meet the changing needs of our customers. We, therefore, will continue to invest heavily in research and development. We have increased gross research and development expenditures from 11.2% to 15.2% of total sales between the years ended August 31, 1997 and August 31, 1999 and we intend to spend between 12% to 16% of our sales on research and development during the next three years. We also intend to dedicate more than 25% of our employees to research and development, including an advanced research group that carries out research activities, monitors technological trends in the industry and maintains links with numerous universities, industry associations and standards bodies.
We also intend to maintain our profile as experts in the field of fiber-optic test, measurement and monitoring instrumentation through activities such as publishing our DWDM reference guide, a widely distributed reference tool and presenting scientific papers at industry conferences, such as the Optical Fiber Conference and the National Fiber-Optic and Engineering Conference.
INVEST IN STRATEGIC SECTORS. We have established a structured review process to ensure that our research and development activities are aligned with our corporate strategy. This rigorous review process has led us to focus on the following strategic sectors:
- DWDM Market. We recently launched a number of DWDM testing solutions, including optical spectrum analyzers, tunable laser sources and fully automated test systems to capitalize on the DWDM market opportunity. We believe that we are well positioned to take advantage of this growing market because we offer one of the most comprehensive selections of DWDM test products. We intend to further improve our DWDM testing solutions to address the requirements of systems requiring higher channel counts and increased transmission speeds.
- Network Monitoring Market. Carriers have become increasingly concerned about the loss of revenue related to system downtime, especially with the widespread deployment of DWDM networks that concentrate data traffic along fewer fibers. As a result, carriers need to automatically carry out network monitoring in real time to locate faults and degradation points along a network in order to prevent system downtime or shorten restoration time. We have developed our remote fiber test system to address the needs of this market. As carriers' optical networks become more complex, we intend to upgrade our remote fiber test system by providing features like wavelength monitoring, which enables the analysis of power and drift of each wavelength and by supplying improved software for better integration with carriers' existing operational support systems.
- Scientific Product Market. We believe that several new market opportunities exist for our family of scientific products, especially with the increasing reliance of optical component, value-added optical module and optical networking system manufacturers on automated test, measurement and monitoring equipment. We intend to provide manufacturers with both off-the-shelf and customized test solutions. We have established a team of 13 product managers in this division, consisting of engineers and scientists, several of whom hold master's or doctorate degrees in Optical Sciences or Electrical Engineering.
LEVERAGE OUR MODULAR DESIGN. The modularity and compatibility of our Windows-based platforms enable us to offer the same instrument design to as many as three different market segments with a single research and development project. This practice lessens the number of different designs, including optical, mechanical, electronics and software, that we must develop and manufacture. We intend to capitalize on the flexible architecture of our Windows-based systems to expand our solutions portfolio and to offer specialized products to specific markets. By being able to provide new functionality through the design of a new module rather than through the design of a complete instrument, we can be quicker to market with new testing technologies and provide more specialized testing solutions.
EXPAND SALES AND MARKETING EFFORTS. We have adopted a focused sales and marketing approach to improve service to existing customers and to pursue new customer opportunities. We intend to:
- expand our direct sales force by opening additional international offices;
- bolster our key account management program by hiring application engineers dedicated to large system manufacturers that are current customers, such as Nortel Networks Corporation, Lucent Technologies, Inc. and Alcatel Optronics;
- increase our network of distributors worldwide;
- open additional service centers in selected, high-growth markets to support our sales activities with calibration and repair services; and
- deploy a customer relationship management software initiative to keep better track of our customers' individual demands and to store information about potential customer opportunities, profiles and histories.
REDUCE DELIVERY LEAD TIMES. The majority of our sales are derived from complex products that are assembled to order. Despite the increased demand for testing, measurement and monitoring instruments, we maintained an average delivery lead time of 30 calendar days for our products during the twelve months ended May 31, 2000. We believe that our delivery lead times are shorter than most of those of our competitors. To further reduce our delivery lead times, we have adopted a number of measures:
- Adhere to Vertically Integrated Manufacturing. We handle all major manufacturing operations in-house because we generally produce short runs of complex products. We believe it is a competitive advantage to have our manufacturing operations centralized since we have greater flexibility and better control over our delivery lead times.
- Increase Manufacturing Capacity. We recently agreed to purchase a building of approximately 112,000 square feet and we intend to make available 60,000 square feet of this additional space for manufacturing. This facility, once equipped, should increase our manufacturing floor space by 167%.
- Implement Enterprise Resource Planning and Supply-Chain Management Software Tools. We intend to improve our information systems environment by implementing enterprise resource planning and supply-chain management software tools. This will enable us to enhance our forecasting, planning and scheduling and procurement activities.
PURSUE COMPLEMENTARY ACQUISITIONS. We believe that market fragmentation in the test, measurement and monitoring industry creates opportunities for consolidation. We plan to pursue strategic acquisitions that will provide us with additional key technologies, complement our product offerings, increase our sales channels and add to our overall level of expertise.
PRODUCTS
Our products are designed for the fiber-optic test, measurement and monitoring industry. We have adapted our product offerings to meet the needs of two main markets: portable and monitoring products for the carrier market and scientific products for the optical component, value-added optical module and optical networking system manufacturer market.
The carrier market primarily encompasses the needs of telecommunications carriers, such as AT&T Corporation, Bell Atlantic Corporation, GTE Corporation and TelMex S.A. de C.V., cable television companies, public utilities, private network operators, as well as third-party network installers and equipment rental companies. This market requires rugged, field-portable and easy-to-use equipment.
The scientific product market includes optical component and value-added optical module companies such as E-Tek Dynamics, Inc. and JDS Uniphase Inc.; optical system manufacturers such as Nortel Networks Corporation and Lucent Technologies, Inc.; optical fiber and cable manufacturers such as Corning Incorporated, Lucent Technologies, Inc. and Sumitomo Electric Lightwave Corp.; as well as university and government research laboratories.
At the core of our test, measurement and monitoring instruments are our FTB-300 Universal Test System (UTS) and IQ-200 Optical Test System (OTS) products. Our FTB-300 UTS provides carriers with a simple, yet efficient way to perform multiple, advanced test operations for installation, maintenance and troubleshooting applications. Our IQ-200 OTS is a scalable unit that is suited for manufacturing, laboratory engineering and research applications. The added benefit of our IQ-200 OTS is that manufacturers can design their own automated test setup or we can customize a setup for them. Our FTB-300 UTS and IQ-200 OTS platforms are fully supported by integrated and highly intuitive graphical user interfaces, enabling the user to easily store, handle and retrieve a large amount of data.
At the Optical Fiber Conference in March 2000, we introduced 13 new products, including optical spectrum analyzer test modules for our FTB-300 UTS and IQ-200 OTS platforms, widely tunable laser sources for DWDM testing, automated test systems for DWDM optical components and value-added optical modules, a single-slot optical time domain reflectometer platform and related test modules, as well as high-power and low-polarization sensitivity power meters.
The following table summarizes the principal types of instruments we provide, their typical applications and the format in which we offer them:
FORMAT
--------------------------------------------------
INSTRUMENT TYPE TYPICAL APPLICATION PORTABLE SCIENTIFIC
--------------- -------------------------------------------------------- ---------------------- -------------------------
FTB 300 IQ200 BENCHTOP
UTS MODULES HANDHELD OTS MODULES INSTRUMENTS
----------- -------- ----------- -----------
Optical time domain Like a radar, it measures the time of arrival of X X
reflectometers reflections of an optical signal to determine the
(OTDRs) distance to the breaks or points of excessive loss in a
fiber network.
Optical spectrum Produces a graphical representation of power versus X X
analyzers wavelength for an optical signal. Useful for measuring
the drift, power and signal-to-noise ratio for each
wavelength in a DWDM system.
Optical power meters Measures the power of an optical signal. It is the basic X X X X
tool for the verification of transmitters, amplifiers
and optical transmission path integrity.
Widely tunable Can produce laser light across a broad range of X X
lasers wavelengths. Used to test DWDM components and
value-added optical modules.
Narrowly tunable A laser that can be precisely tuned to simulate a DWDM X
lasers light sources. Used primarily in testing optical
amplifiers.
Polarization mode Measures the dispersion of light that is caused by X X
dispersion polarization. Generally used to determine the bandwidth
analyzers capacity of fiber and cables.
Multi-wavelength Measures the power and drift for multiple wavelengths in X X
meters a DWDM system.
Variable optical Used in network simulation setups to provide calibrated X X X
attenuators variable reduction of the strength of an optical signal.
Polarization Measures the difference in loss of power for the X
dependent loss different states of polarization.
meters
Loss test sets Integrates a power meter and a light source to manually X X X
or automatically measure the loss of optical signal
along a fiber.
Stable light sources Emitting diode or lasers used in connection with a power X X X X
meter to measure signal loss.
Optical fiber Measures the geometric and light guiding properties of X
parameters an optical fiber. Used in new fiber research and
analyzer development and quality control applications.
Optical amplifier Amplifiers which boost the power of source lasers. Used X
for the testing and calibration of test systems.
Optical switches Provides switching between fibers. Used to provide X X
flexible and automated test setups such as the
measurement of multiple fibers or components with
multiple ports with one instrument.
Optical power Provides a highly accurate and traceable measurement of X
reference module power for the calibration or verification of other power
measurement instruments.
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FORMAT
--------------------------------------------------
INSTRUMENT TYPE TYPICAL APPLICATION PORTABLE SCIENTIFIC
--------------- -------------------------------------------------------- ---------------------- -------------------------
FTB 300 IQ200 BENCHTOP
UTS MODULES HANDHELD OTS MODULES INSTRUMENTS
----------- -------- ----------- -----------
Broadband source Used for testing wavelength dependent behavior of DWDM X
optical components and value-added optical modules.
Talk sets A device which attaches to an optical fiber and serves X X
as a temporary voice link facilitating coordination of
work among installation crews.
Optical return loss Combines a laser and a power meter to measure the amount X X X X
meters of potentially degrading back reflection.
Visual fault A visible laser that can be connected to an optical X X
locators fiber network to help locate breaks or points of
excessive loss.
Live fiber detector Clips on to a fiber and is used to detect the presence X
and direction of a signal without interrupting the
traffic.
Clip-on coupling Clips to an optical fiber and allows non-invasive X
device testing.
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Portable and Monitoring Products
We offer an extensive range of products for fiber-optic testing, measurement and monitoring in the carrier market.
Our test and measurement products are available as handheld test instruments modular and field-portable platforms. Our handheld instruments are durable, compact and easy to use. Our portable platforms are rugged, Windows-based, battery-powered units. Their large, environmentally robust touchscreens are very practical for field use.
We recently introduced our remote fiber test system known as FiberVisor. Our FiberVisor consists of rack-mounted remote test units, which are strategically deployed along a fiber-optic network and a test system controller that retrieves information from as many remote test units as required. The test system controller is typically located inside a network operations center. The information obtained from these remote test units is combined with data from a geographic information system in our FiberVisor system to pinpoint the exact location of a system failure and rapidly provide the required information to a restoration team.
Scientific Products
Our scientific product line is mainly built around our IQ-200 OTS platform and is available as modules or stand-alone benchtop instruments. This base platform is a Windows-based system, which includes a Pentium processor, liquid crystal screen and three slots to accept test modules. This base platform can be supplemented by as many as four expansion platforms, each capable of housing six additional modules, which can be connected and controlled to provide additional functionality and capacity. These expansion platforms can also be controlled via a personal computer. Altogether, the IQ-200 OTS platform and expansion platforms can hold as many as 27 modules and test as many as 105 channels.
The modular nature of our IQ-200 OTS platform is adapted for complex applications involving the synchronized operation of several instruments. For example, several types of lasers, a variable attenuator and an optical spectrum analyzer can be combined to automatically characterize a number of key performance parameters of fiber-optic amplifiers.
Our Scientific Division also addresses testing problems that cannot be handled by standard modules or stand-alone benchtop instruments. We have dedicated a team of engineers to develop custom-made, integrated test systems for customers with specific needs. Some of these integrated test systems, in turn, are modified and offered as off-the-shelf test systems to suit a wider range of customers. In addition, we have created a software development kit for developers who prefer writing their own programs for our instruments. We provide automated systems for assembly, calibration and environmental testing for optical components, value-added optical modules and optical networking systems such as:
- Fiber assembly test system Used for quality assurance testing of optical connector
cables known as jumpers. Jumpers are used to interconnect
optical networking equipment.
- Optical calibration test system Used to calibrate power meters, light sources, variable
attenuators, and optical time domain reflectometers.
- Environmental test system Allows users to perform long term qualification testing of
optical components and value-added optical modules under
varying environmental conditions primarily to ensure
compliance with industry standards.
- DWDM passive component test Provides optical DWDM component and value-added optical
system module manufacturers an automated testing, quality
assurance, and test data storage solution.
- Optical amplifier test system Provides manufacturers of optical amplifiers with an
integrated automated testing, quality assurance, and test
data storage solution.
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RESEARCH AND DEVELOPMENT
We believe that our future success largely depends on our ability to maintain and enhance our core technology and product functionality. To keep developing new products and enhancements, it is important that we recruit and retain highly skilled engineers, scientists and technicians. As of May 31, 2000, our research and development department included 185 full-time engineers, scientists and technicians, of whom 36 hold post-graduate degrees. Gross research and development expenditures for fiscal 1999 were $6.4 million and for the last six months ended February 29, 2000, they were $4.7 million.
Through a market-oriented, product portfolio review process, we ensure that our investments in research and development are aligned with our corporate strategy. This approach enables us to maximize our returns on research and development investments by focusing our resources on a limited number of prioritized projects. Quarterly product portfolio review meetings enable us to choose a realistic, balanced mix of new products and allocate the necessary resources for their development. All our projects, including those already underway, are reviewed, given a priority rating and allocated budgets and resources. Our existing projects can be stopped or substantially redefined if there have been significant changes in market conditions, or if the project development schedule or budget has been significantly exceeded.
To manage our research projects once they are underway, we use a structured management process known as the stage-gate approach. The stage-gate approach is based on a systematic review of a project's feasibility at various stages of its life cycle. The following are the key review stages of the stage-gate approach:
- market study and research feasibility;
- product definition;
- development feasibility;
- development;
- qualification; and
- transfer to production.
At each stage, we review our project risks, costs and estimated completion time. We compare our design to anticipated market needs and ensure that our project is synchronized with other internal departments and external industry events.
CUSTOMERS
Since 1985, we have sold more than 85,000 product units to more than 1,500 customers and our products are distributed in over 70 countries. Our customers include telecommunications carriers, cable television companies, public utilities, private network operators, third-party installers, equipment rental companies, as well as optical component, value-added optical module and optical networking system manufacturers. During fiscal 1999, we delivered products to more than 650 customers and for the six months ended February 29, 2000, we delivered products to approximately 480 customers. During fiscal 1999, no single customer represented more than 6.8% of our sales and for the six months ended February 29, 2000, no single customer accounted for more than 5.5% of our sales.
United States and Canada
During fiscal 1999, U.S. and Canadian customers accounted for 49% and 7% of our sales. For the six months ended February 29, 2000, U.S. and Canadian customers accounted for 51% and 13% of our sales.
The following table is a list of our top U.S. and Canadian customers based on gross sales during the last 12 months:
AT&T Corporation
Bell Atlantic Corporation
General Dynamics Corporation
GTE Corporation
Newcourt Technologies Corp
Nortel Networks Corporation
Qwest Communications International, Inc.
SBC Communications, Inc.
US West Communications, Inc.
International
Our international sales are largely handled by a network of distributors around the world. During fiscal 1999, international customers accounted for 44% of our sales and for the six months ended February 29, 2000, they represented 36% of our sales.
The following is a list of some international end-users of our products:
Bestel S.A. de C.V. (Mexico)
Daewon Corporation (Korea)
ECI Telecom LTD. (Israel)
FOCI Fiber-Optic Communications Inc. (Taiwan)
Instituto Costarricense de Electricidad (Costa Rica)
Korea Informatics Telesis Inc. (Korea)
Marconi Communications SPA (Italy)
Nortel Networks Corporation (United Kingdom)
Telecom Argentina (Argentina)
Telkom S.A. LTD. (South Africa)
SALES
We sell our fiber-optic test, measurement and monitoring products through direct and indirect sales networks in the United States and Canada as well as around the world. We also have an inside sales group, consisting of 10 people, to meet the needs of existing and new customers. Our inside sales group is responsible for providing quotations to customers, supporting our sales force and managing more than 2,000 demonstration units.
United States and Canada Sales
In the United States and Canada, our direct sales network consists of a vice-president, four national sales managers and 16 regional sales managers and application engineers, who are located throughout major metropolitan areas. Our main sales office in the United States is located in Richardson, Texas. We also maintain sales personnel in the following metropolitan areas: Atlanta, Georgia; Charlotte, North Carolina; Chicago, Illinois; Columbus, Ohio; Dallas, Texas; Denver, Colorado; Los Angeles, California; Newark, New Jersey; Wilmington, Delaware; Montreal, Quebec; Ottawa, Ontario; Toronto, Ontario; and Vancouver, British Columbia. Our group of 21 sales professionals has an average of 12 years of experience in the fields of telecommunications, fiber optics, or test, measurement and monitoring.
In the United States, we have adopted a market-specific sales strategy. Three different sales organizations have been created to maximize coverage and penetration of our main markets:
- CARRIER MARKET. This sales team targets customers who own, operate or install networks as their primary business. This market includes telecommunications carriers, cable television companies, public utilities, private network operators, as well as third-party installers and equipment rental companies. A national sales manager, seven regional sales managers and a team of independent sales representatives and distributors concentrate on selling our product line to this customer market.
- MANUFACTURING/R&D MARKET. This sales team targets customers who research, develop or manufacture optical networking products. This sales group consists of one national sales manager and seven regional sales managers, who oversee a network of independent sales representatives. Some regional sales managers also have direct responsibility for serving our larger manufacturing customers. This group also includes field application engineers because pre-sales requirements, including the setup of full-scale demonstration units, often require a significant level of technical on-site expertise. The
presence of field application engineers enables our regional sales managers to concentrate on other sales and management activities. This organizational structure allows us to adequately cover the demands of a highly technical customer base and to identify and penetrate the large number of start-up companies in the component manufacturer market.
- PRIVATE NETWORK MARKET. We have recently initiated a program to pursue additional business opportunities in this market. We anticipate a growing market with the emergence of Gigabit Ethernet, an advanced transmission protocol used in high-speed local area network applications and other optical technologies that will accelerate the delivery of communications services over optical fiber to the desktop. We recently hired a national sales manager to develop this market for our products through new distributor channels.
International Sales
Our international sales network includes a vice-president, three sales directors covering Europe, Latin America and Asia and eight regional sales managers. Our direct sales network around the world is supported by a main office in Paris, France, which maintains our head European sales operations and also provides repair and calibration services for our European, Middle East and African customers. We also have established several sales offices in strategic locations around the world to support our network of distributors and customers. These offices are located in Brazil, China, Germany, Great Britain, Japan and Singapore. Finally, we rely on more than 50 distributors to support our international sales. We feel that the local presence and cultural attributes of our distributors allow us to better serve our global markets.
MARKETING, COMMUNICATIONS AND CUSTOMER SUPPORT
Marketing
Our marketing group consists of 33 products managers and marketing analysts who have various degrees in engineering, science and business administration. Product managers, with the assistance of marketing analysts, are responsible for all aspects of our marketing program including new product introductions, definition of new features and functions, pricing, product launches and advertising campaigns. Marketing analysts help product managers develop marketing programs with tools such as our Web site, CD-ROMs, advertisements, mailouts and customer presentations. We follow up our marketing initiatives by attending industry trade shows. Furthermore, we are implementing a customer relationship management system to compile market and customer information including forecasts, leads and competitive data. We use this information to make strategic business decisions.
Communications
Our communications group, which is mainly composed of commercial writers and graphic artists, supports our marketing group by producing marketing and corporate documentation. Literature includes specification sheets, application notes, media releases, product catalogues, advertising copy and a bi-monthly corporate newsletter. Our communications group is also responsible for maintaining and updating our Web site.
Customer Support
We have developed a customer support group that serves customers and distributors around the world in English, French, Spanish and German. Our customer support group consists of three distinct units: technical support, customer service and a repair and calibration authorization service center. A frequently asked question database is also updated regularly on our Web site.
MANUFACTURING
Manufacturing operations consist mainly of material planning, procurement, sub-assembly, final assembly, testing, software loading, calibration, quality assurance and shipping and billing. As of May 31, 2000, we had 258 employees involved in our manufacturing operations. We have two surface-mount, circuit-board assembly lines and we occupy more than 36,000 square feet for manufacturing purposes. Upon completion of our purchase of a new facility at 400 Godin Avenue, we will occupy more than 95,000 square feet for manufacturing. Our manufacturing operations are handled by three inter-related departments:
- PRODUCTION. Our production department, which is divided into ten cells, is responsible for manufacturing high-quality products on time. Each cell consists of specialized technicians and has full responsibility over a product group. Technicians are versatile enough so that they can perform specific functions within a cell and they can be transferred to other cells when required to alleviate bottlenecks.
- PRODUCTION ENGINEERING AND QUALITY. This department, which supports our production cells, acts like a gatekeeper to ensure the quality of our products and the effectiveness of our manufacturing processes. It is responsible for the transfer of products from research and development to manufacturing, product improvement, documentation, calibration, repairs and the quality assurance and regulatory compliance process. Quality assurance represents a key element in our manufacturing operations. We meticulously verify our instruments to ensure that they meet stringent industry requirements and provide our customers with detailed product test sheets. Our quality assurance program has been certified ISO 9001 since 1994.
- SUPPLY-CHAIN MANAGEMENT. This department is responsible for manufacturing schedules, parts procurement, raw materials and finished goods warehousing, customs management, shipping and billing. Our products consist of optical, electronic and mechanical parts. Approximately one-third of our parts are manufactured to our specifications. Some parts are obtained from single-source suppliers. We manage risks associated with single-source suppliers, as well as parts that are subject to industry shortages or long delivery lead times, through a strategic forecasting process that involves procuring excess inventory where appropriate.
COMPETITION
The fiber-optic test, measurement and monitoring industry is highly competitive and subject to rapid change as a result of technological developments and other factors. We compete with many different companies, depending on product family and geographical market. We believe that the main competitive factors in the industry include the following:
- product performance and reliability;
- level of technological innovation;
- product lead times;
- product offering;
- ease of use;
- customer service and technical support;
- strength of sales and distribution relationships; and
- price.
Generally, our competitors fall into two categories. The first category consists of global electronic test and measurement manufacturers, who complement their broad range of products with fiber-optic test, measurement and monitoring equipment. These companies include Agilent Technologies, Inc., Wavetek Wandel & Golterman, Anritsu Corporation Ando Corporation, Telecommunications Technique Corporation (TTC Dynatec Division), Tektronics, Inc., GN Nettest and Newport Corporation. The second category refers to niche companies in the fiber-optic test, measurement and monitoring industry. These companies typically have limited product lines and are often geographically limited in their customer base. Such companies include Santec Corporation, Photonetics, Inc., Fotec, Inc., ILX Lightwave Corporation and Kingfisher International PTY Ltd. We also face competition from JDS Uniphase Corp., an optical component and value-added optical module vendor that designs and markets its own line of test and measurement instruments.
REGULATORY ENVIRONMENT
In most countries where our products are sold, our products must comply with the regulations of one or more governmental entities. These regulations often are complex and vary from country to country. Depending upon the country and the relevant product, the applicable regulations may require product testing, approval,
registration, marking and unique design restrictions. Accordingly, we have appointed a team of engineers who are responsible for ensuring that our products comply with all applicable regulations.
In the United States, our products must comply with the regulations of several agencies of the U.S. federal government, including the Federal Communications Commission, or the FCC, the Food and Drug Administration, or the FDA and the Occupational Safety and Health Administration, or OSHA. Under the FCC's regulations, our products must comply with, among other things, rules concerning unintentional radio frequency emissions that interfere with protected radio communications systems. Depending upon the product, compliance with these rules may necessitate applying for and obtaining an FCC equipment authorization prior to importing into the United States, or marketing, any units of the relevant product. Additionally, some of our products must comply with the FDA's performance standards and related rules concerning light-emitting products, such as lasers. The FDA's regulations are intended to promote safety by limiting human exposure to harmful electromagnetic radiation. Similarly, our products must comply with OSHA's design safety standards for systems that utilize electricity. These rules are intended to reduce the risk of accidental human electrocution.
Similar regulations apply in other countries. For example, our products are subject to the safety standards of Industry Canada and the Canadian Standards Association with respect to electricity utilization and radio frequency emissions. Other countries in the world require equipment marking in accordance with the standards of the European Community, often referred to as CE marking, testing to ensure compliance with International Electrotechnical Commission standards and other international product approval. Other significant types of regulations not described in this prospectus also may apply, depending upon the relevant product and country.
INTELLECTUAL PROPERTY
Our success and ability to compete are dependent in part on our ability to develop and protect our proprietary technology. We file U.S. and Canadian patent applications to protect technology, inventions and improvements important to the development of our business. We also rely on a combination of copyright, trademark, trade secret rights, licensing and confidentiality agreements.
We currently hold four U.S.-issued, two Canadian-issued and three foreign-issued patents and we have six U.S. and eight Canadian patent applications pending. These issued and pending patents cover various aspects of our products and processes. The expiration dates of our issued patents range from July 17, 2011 to October 9, 2016.
We consider three of our inventions for which patents have either been granted or are pending to be material. These inventions are:
- the optical time domain reflectometer with internal reference reflector for which a patent was granted in the United States and is pending in Canada. This invention permits the control of the optical time domain reflectometer detector gain and the determination of the loss of the initial optical connector and is used in most of our optical time domain reflectometer-based products;
- the measurement of attenuation of optical fibers using bidirectional transmission of information via the fiber for which patents were granted in the United States and Canada. This invention forms the basis of our FOT-920 and FTB-3920 products; and
- an adapter for interconnecting optical fiber connectors for which patents are pending in Canada and the United States. This invention permits a wide variety of connectors to be joined to our test and measurement instruments.
Confidentiality and proprietary information agreements with our senior management, employees and others generally stipulate that all confidential information developed or made known to these individuals by us during the course of their relationship is to be kept confidential and not disclosed to third parties, except in specific circumstances. The agreements also generally provide that all intellectual property developed by the individual in the course of rendering services to us belongs exclusively to us. These efforts afford only limited protection.
FACILITIES
Our main offices and facilities are located near Quebec City, Canada. We occupy four buildings, totalling approximately 106,976 square feet. These buildings house our executive and administrative offices, research and development facilities and production facilities. In addition, we also maintain sales offices in Brazil, China, France, Germany, Japan, United States, Singapore and the United Kingdom. The following table sets forth information with respect to the main facilities that we occupy.
LOCATION USE OF SPACE SQUARE FOOTAGE TYPE OF INTEREST -------- -------------------------------- -------------- ---------------- 436 Nolin Street Manufacturing 44,164 Leased Vanier (Quebec) 400 Godin Avenue Research and Development 25,118 Leased Vanier (Quebec) and Administrative 465 Godin Avenue Executive and Administrative 24,000 Leased Vanier (Quebec) 500 St-Jean-Baptiste Street Administrative and Manufacturing 13,694 Leased Quebec (Quebec) |
We have entered into an agreement to purchase the building located at 400 Godin Avenue in Vanier, Quebec, for a consideration of C$4.9 million (approximately $3.3 million). This transaction is expected to close in June 2000. In addition to the 25,118 square feet that we lease, this transaction will progressively make available approximately 87,000 square feet to be used for manufacturing and research and development. With the additional space, we believe that the existing facilities will be adequate to meet our current needs. However, as we continue to experience growth, additional space will be required by mid to late 2001.
EMPLOYEES
We have fostered a corporate culture where growth and change are strongly encouraged. In fact, employees are constantly evolving with the rapid pace of technology to meet new challenges and realities. We believe that we possess a good cross-section of experience and youth to handle these inevitable changes in the industry. The average age of our employees is around 30 years old. Over the years, we have benefited from our proximity to Laval University, which is located near Quebec City. Laval University has post-graduate programs in optical and electronic engineering.
As of May 31, 2000, we employed 671 full-time employees who originate from approximately 20 countries. 185 are involved in research and development, 258 in manufacturing, 93 in sales and marketing, 77 in general administrative positions and 58 in communications and customer support. During the last 12 months, we added more than 240 employees. We have agreements with the majority of our employees covering confidentiality and non-competition. Only manufacturing employees are represented by a collective bargaining agreement, which expires in 2004. We have never experienced a work stoppage. We believe that relations with our employees are good.
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings, nor are we aware of any such legal proceedings that are contemplated.
MANAGEMENT
EXECUTIVE OFFICERS, SENIOR MANAGERS AND DIRECTORS
The following table sets forth information about our executive officers, senior managers and directors as of June 8, 2000.
NAME AND MUNICIPALITY OF RESIDENCE AGE POSITIONS WITH EXFO ---------------------------------- --- ------------------- GERMAIN LAMONDE.................... 41 Chairman of the Board, President and Chief Executive Cap-Rouge, Quebec Officer PIERRE PLAMONDON................... 41 Vice-President, Finance and Chief Financial Officer Quebec City, Quebec BRUCE BONINI....................... 43 Vice-President, North American Sales Fairview, Texas JUAN-FELIPE GONZALEZ............... 41 Vice-President, International Sales Quebec City, Quebec JEAN-FRANCOIS BOULET............... 44 Vice-President, Human Resources Montmagny, Quebec MARIO LAROSE....................... 45 Vice-President, Marketing Laval, Quebec STEPHEN BULL....................... 41 Vice-President, Research and Development Lac-Beauport, Quebec MARYSE IMBEAULT.................... 39 Communications and Customer Relations Director Ancienne-Lorette, Quebec ROXANE VEZINA...................... 36 Information Technology and Supply-Chain Management Quebec City, Quebec Director JEAN LAFLAMME...................... 34 Research and Development Director Duberger, Quebec LUC GAGNON......................... 41 Manufacturing Director Saint-Augustin-de-Desmaures, Quebec PIERRE BERGERON.................... 38 Quality Assurance and Engineering Production Director Cap-Rouge, Quebec GREGORY SCHINN..................... 42 Chief Technology Officer Quebec City, Quebec KIMBERLEY ANN OKELL................ 39 Secretary and Legal Counsel Sainte-Foy, Quebec PIERRE MARCOUILLER................. 44 Director Magog, Quebec ANDRE TREMBLAY..................... 45 Director Outremont, Quebec MICHAEL UNGER...................... 59 Director Woodbridge, Ontario |
One other member will be added to the board of directors prior to the closing of this offering.
The following is a brief biography of each of our executive officers, senior managers and directors.
Germain Lamonde is one of our founders. Germain Lamonde has been our Chairman of the Board, President and Chief Executive Officer since our inception in 1985. Mr. Lamonde holds a bachelor's degree in Physics Engineering from Ecole Polytechnique, University of Montreal in Canada and a master's degree in Optics from Laval University in Canada. Mr. Lamonde is a member of the board of directors of Laval University's Research Center for Excellence in Photonics and a member of the Council for Science and Technology of the government of the province of Quebec.
Pierre Plamondon has been our Vice-President, Finance and Chief Financial Officer since January 1996 and was a director from December 1999 to May 2000. Prior to joining us, Mr. Plamondon served as senior manager
for Price Waterhouse, now PricewaterhouseCoopers LLP, from September 1981 to December 1995 in Canada and France. Mr. Plamondon holds a bachelor's degree in Business Administration and a license in Accounting, both from Laval University in Canada. Mr. Plamondon has been a member of the Canadian Institute of Chartered Accountants since 1983.
Bruce Bonini has been our Vice-President, North American Sales since December 1998. Prior to joining us, Mr. Bonini held the position of Vice-President Sales-Eastern Region for Wandel & Golterman, now Wavetek Wandel & Golterman, a company specializing in communications test solutions, from September 1997 to December 1998. Mr. Bonini was successively Sales Director and Vice-President of Sales for Digital Lightwave Inc., a synchronous optical network test equipment manufacturer, from August 1996 to January 1997. From August 1987 to August 1996, Mr. Bonini held different sales and senior management positions for Laser Precision Corporation, an optical test equipment manufacturer. Following the acquisition of Laser Precision by GN Nettest, Mr. Bonini was named Global Vice-President of Sales for GN Nettest/Fiber-Optics Division. Mr. Bonini holds a bachelor's degree in Business Administration (industrial marketing) from Western Michigan University in the United States.
Juan-Felipe Gonzalez has been our Vice-President, International Sales since September 1998. From January 1997 to September 1998, he was our International Sales Director and, from September 1993 to January 1997, our Sales Manager for Latin America and the Caribbean. Prior to joining us in September 1993, Mr. Gonzalez was Marketing and Sales Director at Reyde, Barcelona, a plastics technical product corporation in Spain. Mr. Gonzalez holds a bachelor's degree in Industrial Chemistry from Complutense University of Madrid in Spain and a master's degree in Business Administration from the School of Industrial Organization in Spain.
Jean-Francois Boulet joined us in March 2000 as Vice-President, Human Resources. Mr. Boulet was formerly employed by Societe de portefeuille du Groupe Desjardins -- Assurances Generales since 1996 where he had been successively Senior Vice-President, Human Resources and Senior Vice-President, Human Resources and Corporate Communications. From 1992 to 1996, Mr. Boulet held different senior management positions related to human resources and organizational development for Inglis Limited, a leading manufacturer of home appliances. Mr. Boulet holds a bachelor's degree in Industrial Relations from Laval University in Canada.
Stephen Bull was appointed our Vice-President, Research and Development in December 1999. He joined us in July 1995 and held the positions of Assistant Director-Engineering from September 1997 to December 1999 and Group Leader (Engineering Management) from July 1995 to September 1997. From June 1990 to March 1995, Mr. Bull held the position of General Manager and Managing Director for Space Research Corporation, a military engineering company in Belgium. Mr. Bull holds a bachelor's degree in Electrical Engineering from Laval University in Canada.
Mario Larose was appointed Vice-President, Marketing on June 7, 2000. Prior to joining us, Mr. Larose was Interim General Manager with C-MAC Corporation, a manufacturer of microelectronic products, from September 1999 to January 2000. Prior to the acquisition by C-MAC of L.G. Technologies Ltee, Mr. Larose held the position of Vice-President, Marketing and Sales with L.G. Technologies Ltee, a sub-contract electronic manufacturer from January 1998 to September 1999. Prior to that, Mr. Larose was Vice-President, Engineering with Unican Security Systems Limited, a public security systems manufacturer, from August 1995 to December 1997. Prior to joining Unican, Mr. Larose held various positions with Northern Telecom, now Nortel Networks Limited, a provider of telephony, data, wireless and wire-line solutions for the Internet. Mr. Larose is President and a shareholder of LAMA2 inc., a private management consulting company. Mr. Larose holds a bachelor's degree in Applied Sciences, Engineering Physics from Ecole Polytechnique, University of Montreal in Canada and a master's in Business Administration from Universite du Quebec a Montreal in Canada.
Maryse Imbeault has been our Communications and Customer Services Director since May 1996. Prior to that appointment, Ms. Imbeault was our Marketing and Communications Director from September 1994 to May 1996, our Marketing Director from January 1994 to September 1994 and a Marketing Assistant from August 1992 to January 1994. Ms. Imbeault holds an Associate Arts and Science Diploma, specializing in Marketing Management, from Capilano College in Canada.
Roxane Vezina joined us in January 2000 as Information Technology and Supply-Chain Management Director. From October 1995 to December 1999, Ms. Vezina served as Vice-President, Information Systems and Strategic Planning for Venmar Ventilation and Broan-NuTone Canada, manufacturers of home comfort and indoor air quality products. From August 1991, when she joined Venmar, to October 1995, Ms. Vezina acted as the Quality Improvement and Special Projects Manager. Ms. Vezina holds a bachelor's degree in Industrial Engineering from Ecole Polytechnique, University of Montreal in Canada.
Jean Laflamme was appointed our Research and Development Director in March 2000 after having served as our Production Director since June 1996. Mr. Laflamme joined us in 1990 as an electrical engineer and since then has led many successful projects, serving successively as Group Leader and Production Line Manager. Mr. Laflamme holds a bachelor's degree in Electrical Engineering from Laval University in Canada.
Luc Gagnon joined us in March 2000 as Manufacturing Director. Prior to joining us, Mr. Gagnon served as Operations Manager for Mendes Inc., a company specializing in amusement equipment, from March 1999 to March 2000. From December 1997 to February 1999, Mr. Gagnon was Plant Manager for C-MAC Corporation, Micro-Circuits Division. Prior to that, Mr. Gagnon served as Operations Manager for Steris Corporation, a manufacturer of specialized cleaning equipment, from March 1993 to December 1997. Previously, Mr. Gagnon held various engineering positions with Unitel Inc., a telecommunications carrier. Mr. Gagnon holds a bachelor's degree in Electrical Engineering and a master's degree in Engineering from Sherbrooke University in Canada.
Pierre Bergeron has been our Engineering Production and Quality Assurance Director since May 1998. From March 1987 to May 1998, Mr. Bergeron held successively the positions of Project Manager, Project Director and Executive Vice-President for Groupe Expert Conseil RDS in Canada, a company of engineers specializing in quality and productivity improvement and human resources. This company declared bankruptcy in 1998. Mr. Bergeron holds a bachelor's degree in Mechanical Engineering from Laval University in Canada.
Gregory Schinn was appointed our Chief Technology Officer in November 1999, after simultaneously holding the positions of Scientific Director and Head of the Research Group since joining us in April 1996. Prior to joining us, Dr. Schinn led the research and development team responsible for optical amplifier and fiber laser development at MPB Technologies, Inc., a diversified technology company, in Montreal from 1990 to 1996. Dr. Schinn holds a bachelor's degree in Engineering Science and a master's degree in Aerospace Engineering from the University of Toronto. He also holds a Ph.D. in Physics from the University of Colorado at Boulder and has spent two years as a post-doctoral research associate at the University of Virginia. Dr. Schinn has been published in numerous scientific journals and he has served on the technical organizing committees of several international scientific conferences. He is currently the Director of the Division of Applied Physics of the Canadian Association of Physicists.
Kimberley Ann Okell has been our in-house legal counsel since February 2000 and our Secretary since May 2000. Prior to joining us, Ms. Okell was Vice-President Legal Affairs and Secretary with Groupe Equiconcept Inc. from October 1999 to February 2000 and Director of Legal Services and Secretary with Informission Group Inc., now nurun Inc., an information technology company, from December 1997 to October 1999. Prior to that, Ms. Okell was an associate with the law firm McCarthy Tetrault from August 1994 to December 1997. Ms. Okell has been a member of the Quebec Bar since September 1993. Ms. Okell holds a bachelor's degree in Civil Law from Laval University in Canada, a bachelor's degree in Common Law from The University of Western Ontario in Canada and an Honors bachelor of Arts degree from York University in Canada.
Pierre Marcouiller is the founder and has been sole shareholder of Nexcap Inc., an investment company in the manufacturing sector, since December 1996. Mr. Marcouiller worked with Venmar Ventilation Inc., a private ventilation equipment manufacturer, from January 1983 to December 1996. Mr. Marcouiller was the controlling shareholder of Venmar from 1991 to 1996 and held the position of President and General Manager of Venmar from December 1986 to December 1996. Mr. Marcouiller is also a director of IPL Inc., a manufacturer of thermoplastic products. Mr. Marcouiller holds a bachelor's degree in Business Administration from Universite du Quebec a Trois-Rivieres in Canada and a Master in Business Administration from Sherbrooke University in Canada.
Andre Tremblay has been President and Chief Executive Officer of Microcell Telecommunications Inc., a wireless telecommunications provider, since May 1995. Mr. Tremblay has been a member of the board of directors of Microcell since November 1995. Mr. Tremblay is also a member of the executive committee and a member of the board of directors of Telesystem Ltd. and, since 1992, Executive Vice-President of Telesystem Ltd. Prior to joining Telesystem Ltd., a privately-held holding company. Mr. Tremblay was a tax partner and member of the management committee of Raymond, Chabot, Martin, Pare, a Canadian accounting firm. Mr. Tremblay holds a bachelor's degree in Business Administration and a license in Accounting from Laval University in Canada, as well as a master's degree in taxation from Sherbrooke University in Canada. He also completed the Advanced Management Program offered by the Harvard Business School in the United States.
Michael Unger worked with Nortel Networks Limited, now Nortel Networks Corporation, from 1962 to 2000. Mr. Unger's most recent position was President of Nortel's Optical Networks Business Unit, a position he held from May 1998 to April 2000. Prior to this appointment, Mr. Unger was Nortel's Group Vice-President, Transport Networks from March 1990 to May 1998. Mr. Unger holds a bachelor's degree in Science from Concordia University in Canada.
TERM OF EXECUTIVE OFFICERS
Executive officers are appointed annually by the board of directors and serve until their successors are appointed and qualified or until earlier resignation or removal.
BOARD OF DIRECTORS
Our directors are elected at the annual meeting of shareholders for one-year terms and serve until their successors are elected or appointed, unless they resign or are removed earlier. Our articles of incorporation provide for a board of directors of a minimum of three and a maximum of 12 directors. Our board will initially consist of five directors, including one director to be added prior to the closing of this offering. Under the Canada Business Corporations Act, a majority of the directors and of the members of any committee of the board of directors must be composed of resident Canadians.
COMMITTEES OF THE BOARD OF DIRECTORS
Our board of directors has established an audit committee and concurrently with the closing of this offering, our board of directors will establish a human resources committee.
Our audit committee will recommend a firm to be appointed as independent auditors to audit financial statements and to perform services related to the audit, review the scope and results of the audit with the independent auditors, review with management and the independent auditors our annual operating results and consider the adequacy of the internal accounting procedures and the effect of the procedures relating to the auditors' independence. In addition, the audit committee will monitor the board's corporate governance practices, propose nominees annually for election to the board, make recommendations as to the composition of the committees of the board and review the functioning of the board and the powers, mandates and performance of the committees. The audit committee is composed of three independent directors: Andre Tremblay, Michael Unger and Pierre Marcouiller. The chairperson of the audit committee is Andre Tremblay.
Our human resources committee will evaluate, review and supervise our procedures with regards to human resources and will assess the performance of our officers. This committee will also review annually the remuneration of the directors and will recommend to the board of directors general remuneration policies regarding salaries, bonuses and other forms of remuneration for our directors and executive officers. The human resources committee will be composed of three independent directors.
DIRECTOR COMPENSATION
Our directors who are not officers or employees will receive annual compensation of C$6,000 comprised of cash or the equivalent value of our subordinate voting shares. In addition, they will be eligible to participate in our stock option plan. Directors who are also committee members will receive additional annual compensation
of C$3,000 per committee and committee chairpersons will receive C$5,000 annually comprised of cash or the equivalent value of our subordinate voting shares. This compensation for chairing or participating on a committee is also payable by way of stock options. All directors will be reimbursed for travelling and other expenses incurred in connection with attendance at meetings.
EXECUTIVE COMPENSATION
In fiscal 1999, we paid an aggregate $652,175 in cash compensation to our directors, executive officers and other members of senior management named under the caption "Executive Officers, Senior Management and Directors" as a group (eight persons in fiscal 1999).
The table below provides information on the compensation of our Chairman of the Board, President and Chief Executive Officer and our other executive officers whose compensation exceeded $70,000 for all services rendered while acting as our executive officers in respect of the year ended August 31, 1999. The annual compensation below excludes perquisites and other personal benefits because these benefits did not exceed 10% of the total annual salary and bonus for any of these officers.
SUMMARY COMPENSATION TABLE
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SECURITIES
OTHER ANNUAL ISSUED UNDER
COMPENSATION LONG-TERM
NAME AND PRINCIPAL OCCUPATION SALARY BONUS(1) ($) COMPENSATION(3)
------------------------------------------ -------- -------- ------------ ---------------
GERMAIN LAMONDE........................... $116,853 $ 9,025 -- --
Chairman of the Board, President and Chief
Executive Officer
BRUCE BONINI(2)........................... $154,220 -- -- 49,324
Vice-President, North American Sales
JUAN-FELIPE GONZALEZ...................... $110,049 $ 3,980 -- 51,452
Vice-President, International Sales
PIERRE PLAMONDON.......................... $ 64,156 $ 9,100 -- 32,927
Vice-President, Finance and Chief
Financial Officer
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(1) Bonuses are paid in cash in the year following the fiscal year in which they are earned.
(2) Mr. Bonini joined us on December 9, 1998.
(3) Number of Class "F" shares, which will be converted into subordinate voting shares prior to the closing of this offering, issued under the 1998 Stock Purchase Plan.
EMPLOYMENT AGREEMENT
We will, prior to the closing of this offering, enter into an employment agreement with Germain Lamonde. The agreement will provide for Mr. Lamonde's employment as our President and Chief Executive Officer at a base salary, without adjustment, during the time between the signing of the agreement and August 31, 2000 of C$275,000 per year. Mr. Lamonde shall also be entitled to receive, during the period from September 1, 2000 to August 31, 2001, a base salary of C$275,000 plus a variable portion based on a formula established by our board of directors. The agreement will be for an indeterminate period and the salary will be reviewed annually after September 1, 2001. In the event of the termination of Mr. Lamonde's employment with us, other than for cause, Mr. Lamonde will be entitled to severance payments (in no case exceeding 24 months of remuneration) and the vesting of all stock options, upon the incapacity of Mr. Lamonde, a merger, acquisition by a third party of substantially all of our assets or of the majority of our share capital or termination of Mr. Lamonde without cause by us.
STOCK OPTION PLAN
We will, prior to the closing of this offering and subject to regulatory approval, establish a stock option plan for our directors, executive officers, employees and consultants and those of our subsidiaries as determined by
our board of directors, to attract and retain competent directors, executive officers, employees and consultants motivated to work toward ensuring our success and to encourage them to acquire our shares.
All of the options that will be granted under the plan may be exercised within a maximum period of ten years following the grant date of the options. The board of directors will designate the recipients of options and determine the number of subordinate voting shares covered by each of these options, the date of vesting of each option, the exercise price of each option, the expiry date and any other conditions relating to these options, in each case in accordance with the applicable legislation of the securities regulatory authorities. The price at which the subordinate voting shares may be purchased under the plan will not be lower than the highest of the closing prices of the subordinate voting shares on the stock exchanges where the subordinate voting shares are listed at the date of grant.
The maximum number of subordinate voting shares that is issuable under the plan may not exceed 4,470,961 shares. The maximum number of subordinate voting shares that may be granted to any individual may not exceed 5% of the outstanding subordinate voting shares. The board of directors may accelerate the vesting of any or all outstanding options of any or all optionees upon the occurrence of a change of control.
Prior to the closing of this offering, we intend to grant to 554 of our employees and to all directors who are not officers or employees options to purchase a total of 581,280 subordinate voting shares at the initial public offering price with a vesting period of up to five years following the date of the grant. Following this grant, there will be 3,889,681 options that are available for future grants under the plan.
SHARE PLAN
In September 1998, we established a stock purchase plan for officers, directors and key employees as amended in April 2000. As of June 7, 2000, 709,605 Class "F" shares had been issued and fully paid under the 1998 Stock Purchase Plan. Prior to the closing of this offering, a total of 709,605 Class "F" shares will have been issued pursuant to the 1998 Stock Purchase Plan for a weighted average cash consideration of C$0.99 per share. The plan provides that all shares issued under the plan are restricted as to sale and transferability for a minimum period of five years upon the date of acquisition. Prior to the closing of this offering, all of the 709,605 Class "F" shares will be converted into subordinate voting shares.
On April 3, 2000, we adopted a new share plan which replaced the 1998 Stock Purchase Plan. No additional shares will be issued under the new share plan. The new share plan established restrictions on the rights of the holders of subordinate voting shares who hold those shares as a result of the conversion of the Class "F" shares issued under the 1998 Stock Purchase Plan. The new share plan also requires the subordinate voting shares to be held in trust by a trustee until August 31, 2004, except for 256,017 subordinate voting shares which will be released between October 21, 2003 and January 20, 2004. The new share plan also provides for the earlier release of shares in the event that the employment of a holder of shares is terminated or upon the occurrence of a change of control. The new share plan does not permit any transfer, except within the trust to a registered retirement savings plan or a registered retirement income fund or to a trustee in bankruptcy. The new share plan also established the conditions pursuant to which the shares of a shareholder are to be sold by the trustee on the public market.
DEFERRED PROFIT SHARING PLAN
Under the plan, we contribute an amount equal to 1% of each employee's gross salary to that employee's individual deferred profit sharing plan to the extent that such employee contributes at least 2% of his or her gross salary to his or her individual tax-deferred registered retirement savings plan. We may also make discretionary contributions of up to 4% of an employee's gross salary to his or her individual tax deferred registered retirement savings plan, depending on our and the employee's performance. In the year ended August 31, 1999, the aggregate amount of contributions under the plan was $104,000 (C$156,000).
401(K) PLAN OF EXFO AMERICA INC.
We maintain a 401(k) plan to provide employees of EXFO America Inc. who are residents of the United States, with a tax preferential savings and investment program. Employees become eligible to participate in the 401(k) plan on the first day of the month following the completion of three months of continuous service. Employees may elect to defer their current compensation up to the lesser of 1% of eligible compensation or the statutorily prescribed annual limit and have the deferral contributed to the 401(k) plan. The 401(k) plan permits, but does not require, us to make additional matching contributions to the 401(k) plan on behalf of the eligible participants, subject to a maximum of 50% of the first 6% of the participant's current compensation. The contributions made by and on behalf of employees may not exceed the maximum contribution limitation currently equal to the lesser of 15% of their compensation or $10,500 per year under current statutory limitations. In the year ended August 31, 1999, we made an aggregate of $21,000 in matching contributions to the 401(k) plan. Contributions by employees or by us to the 401(k) plan and income earned on plan contributions are generally not taxable to the employees until withdrawn and contributions by us are generally deductible by us when made. At the direction of each participant, the trustee of the 401(k) plan invests the assets of the 401(k) plan in selected investment options.
INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY
Our by-laws require us, subject to the limitations provided by law, to indemnify our present or former directors and officers or any persons who act or acted at our request as directors or officers of a body corporate of which we are or were a shareholder and for all costs, losses, charges and expenses that arose or may arise by reason of their status as directors or officers of EXFO or such body corporate. A policy of directors' and officers' liability insurance is maintained by us which insures our directors and officers and those of our subsidiaries against liability incurred by, arising from or against them for certain of their acts, errors or omissions.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
We have guaranteed the repayment of loans granted to employees by a financial institution for the purchase of our Class "F" shares that will be converted into subordinate voting shares prior to the closing of this offering. As of June 7, 2000, the total principal amount guaranteed by us is C$243,599 (approximately $165,000). We loaned to some of our employees up to $26,000 to finance the acquisition of our Class "F" shares. These loans are to be reimbursed no later than five years from the date of the loans. These loans will accrue interest at prime rate and will be secured by a pledge of the employees' shares to us.
TRANSACTIONS WITH RELATED PARTIES
Except as disclosed in this section, none of our directors, executive officers, associates or affiliates had any material interest in any transaction with us during the past three years or in any proposed transaction which has materially affected or could materially affect us.
LEASES
We have entered into lease agreements with 9080-9823 Quebec inc., a company controlled by Mr. Germain Lamonde, for the manufacturing facilities located at 436 Nolin Street and the executive and administrative offices located at 465 Godin Avenue in Vanier, Quebec. The table below sets forth the leased space, annual rent and term of the leases:
LOCATION SQUARE FOOTAGE ANNUAL RENT EXPIRY DATE -------- -------------- ----------- ----------------- 436 Nolin 44,164 C$220,820 February 28, 2001 465 Godin 24,000 C$144,000 November 30, 2001 |
Based on third-party valuations of the property values, we believe these lease agreements are at prevailing market terms.
LOAN TO GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
In February 2000, we extended a non-interest-bearing loan with a principal amount of C$1.0 million to GEXFO Investissements Technologiques inc., a company controlled by Germain Lamonde. We will demand repayment of this loan immediately following the closing of this offering.
PROMISSORY NOTES ISSUED TO OUR SHAREHOLDERS
Prior to the closing of this offering, we will declare a dividend of C$26.0 million (approximately $17.6 million) to the holders of Class "A" and Class "F" shares. Holders of Class "F" shares will receive a cash payment of C$476,616 (approximately $322,000). We will issue promissory notes to the holders of Class "A" shares listed below with an aggregate principal amount of C$25.5 million (approximately $17.3 million). Holders of Class "A" shares are:
- GEXFO Investissements Technologiques inc., a company controlled by Germain Lamonde;
- Fiducie Germain Lamonde, a family trust for the benefit of Germain Lamonde and members of his family; and
- G. Lamonde Investissements Financiers inc., a company controlled by Germain Lamonde.
The promissory notes will bear no interest and will be payable on demand. We plan to repay indebtedness under the promissory notes immediately after the closing of this offering with a portion of the net proceeds from this offering.
ACQUISITION OF GEXFO DISTRIBUTION INTERNATIONALE INC.
On September 1, 1998, we acquired all the issued and outstanding shares of GEXFO Distribution Internationale inc. from GEXFO Investissements Technologiques inc., a company controlled by Germain Lamonde, in exchange for one Class "C" share of EXFO. This share was redeemed on September 1, 1998 at a price of C$509,000 ($340,000). GEXFO Distribution Internationale inc. has two wholly-owned subsidiaries, EXFO America Inc. and EXFO Europe S.A.R.L., which markets fiber-optic test and measurement instruments for the U.S. and European markets.
LOAN FROM 9080-9823 QUEBEC INC.
As of February 29, 2000, we have outstanding a loan of approximately $1.4 million owed to 9080-9823 Quebec inc., a company controlled by Germain Lamonde. This loan bears interest at prime rate plus 1% and is repayable on demand. As of June 7, 2000, the interest rate on this loan was 8.5%. A portion of the net proceeds from this offering will be used to repay all amounts outstanding under this loan. See "Use of Proceeds."
CAPITAL REORGANIZATION OF GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
In connection with the capital reorganization of GEXFO Investissements Technologiques inc., Germain Lamonde undertook to cause us to declare a dividend in an amount sufficient for GEXFO Investissements Technologiques inc. to be able to redeem those of its shares not currently owned by Mr. Lamonde and we undertook to apply our retained earnings primarily for this purpose. To that end, we intend to declare, prior to the closing of this offering, a dividend in an amount of C$26.0 million to our shareholders of which C$23.7 million will be paid to GEXFO Investissements Technologiques inc. See "Use of Proceeds."
REGISTRATION RIGHTS AGREEMENT
We will enter into a registration rights agreement with Germain Lamonde prior to the closing of this offering, under which Mr. Lamonde and entities affiliated with him will be granted demand registration rights in the United States in respect of the subordinate voting shares, including the subordinate voting shares issued upon conversion of the multiple voting shares held by him or entities affiliated with him. With respect to the demand registration rights of Mr. Lamonde, subject to minimum dollar amounts, Mr. Lamonde may make a demand once every 12 consecutive month period. Mr. Lamonde also will have an unlimited number of piggyback
registration rights in respect of the subordinate voting shares issued upon conversion of the multiple voting shares held by him or entities affiliated with him. The piggyback registration rights generally will allow Mr. Lamonde to include all or a portion of the subordinate voting shares issuable upon conversion of the multiple voting shares under any registration statement filed by us.
We will pay all expenses, other than underwriting discounts and commissions and taxes, in connection with the exercise of any demand registration rights or piggyback registration rights. We also will agree to indemnify any sellers and underwriters against some liabilities, including liabilities arising under applicable securities laws. Mr. Lamonde has agreed not to exercise his registration rights without the prior written consent of Merrill Lynch on behalf of the underwriters of this offering for a period of 180 days following the date of this prospectus.
PRINCIPAL SHAREHOLDERS
The following table presents information regarding the beneficial ownership of our share capital immediately prior to this offering and as adjusted to reflect the sale of our subordinate voting shares in this offering, by:
- persons or groups of affiliated persons known by us to own more than 5% of our voting shares;
- our directors;
- our Chief Executive Officer and our three highest compensated executive officers; and
- all of our directors and executive officers as a group.
Each multiple voting share is convertible at the option of the holder into one subordinate voting share. In addition, each preferred share series 1 is convertible at our option into a number of subordinate voting shares based on the market price of our subordinate voting shares at the time of conversion. Holders of our subordinated voting shares are entitled to one vote per share and holders of our multiple voting shares are entitled to ten votes per share. The preferred shares series 1 do not have any voting rights.
Unless otherwise indicated, the address of each person who beneficially owns 5% or more of our subordinate voting shares or multiple voting shares is c/o EXFO Electro-Optical Engineering Inc., 465 Godin Avenue, Vanier, Quebec, Canada.
PERCENTAGE OF VOTING
NUMBER OF NUMBER OF MULTIPLE POWER OWNED
SUBORDINATE VOTING VOTING SHARES --------------------
SHARES OWNED PRIOR TO OWNED PRIOR TO PRIOR TO AFTER
NAME AND AFTER THIS OFFERING AND AFTER THIS OFFERING OFFERING OFFERING
---- ----------------------- ----------------------- -------- --------
Germain Lamonde..................... -- 38,000,000 99.8% 98.3%
Juan-Felipe Gonzalez................ 51,452 -- * *
Bruce Bonini........................ 49,324 -- * *
Pierre Plamondon.................... 32,927 -- * *
All directors and executive officers
as a group (9 persons)............ 165,979 38,000,000 99.9% 98.3%
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* Less than 1%.
The number of shares held by Germain Lamonde includes:
- 35,340,000 multiple voting shares held of record by GEXFO Investissements Technologiques inc., a company controlled by Mr. Lamonde;
- 1,900,000 multiple voting shares held of record by Fiducie Germain Lamonde, a family trust for the benefit of Mr. Lamonde and members of his family; and
- 760,000 multiple voting shares held of record by G. Lamonde Investissements Financiers inc., a company controlled by Mr. Lamonde.
DESCRIPTION OF SHARE CAPITAL
CAPITAL REORGANIZATION
As of June 8, 2000, our authorized share capital was composed of an unlimited number of Class "A" shares, Class "B" shares, Class "C" shares, Class "D" shares, Class "E" shares, Class "F" shares and Class "G" shares of which 38,000,000 Class "A" shares, 709,605 Class "F" shares and 800,000 Class "G" shares will be issued and outstanding.
Immediately prior to this offering, we will modify our authorized share capital to:
- an unlimited number of subordinate voting shares without par value;
- an unlimited number of multiple voting shares without par value; and
- an unlimited number of preferred shares without par value, issuable in series.
As a result of the reorganization:
- the 38,000,000 Class "A" shares will be exchanged into 38,000,000 multiple voting shares;
- the 709,605 Class "F" shares will be exchanged into 709,605 subordinate voting shares; and
- the 800,000 Class "G" shares will be exchanged into 800,000 preferred shares series 1.
EQUITY SHARES
Except as otherwise described, the equity shares, which means the multiple voting shares and the subordinate voting shares, have the same rights, are equal in every respect and are treated as if they were shares of one and the same class.
Rank
The equity shares rank junior to the preferred shares in the payment of dividends, return of capital and distribution of assets in the event of liquidation, dissolution or any distribution of our assets for the purpose of winding up our affairs.
Dividends
The holders of outstanding equity shares may receive dividends on a share-for-share basis, in the amounts and at the times our board of directors may determine, out of our assets legally available for this purpose, without preference or distinction among or between the multiple voting shares and the subordinate voting shares.
Voting Rights
The subordinate voting shares carry one vote per share and the multiple voting shares carry ten votes per share. The holders of equity shares are entitled to receive notice of any meeting of our shareholders and to attend and vote as a single class on all matters to be voted on by our shareholders, except at meetings where the holders of shares of one class or of a particular series of shares are entitled to vote separately.
Modification
The rights, privileges, conditions and restrictions attaching to the equity shares may be modified if the amendment is authorized by at least two-thirds of the votes cast at a meeting of the holders of equity shares duly held for that purpose. However, if the holders of subordinate voting shares, as a class, or the holders of multiple voting shares, as a class, are to be affected in a manner different from the other classes of shares, the amendment must, in addition, be authorized by at least two-thirds of the votes cast at a meeting of the holders of the class of shares which is affected differently.
Additional Issuance of Multiple Voting Shares
We may not issue multiple voting shares without the approval of at least two-thirds of the votes cast at a meeting of the holders of subordinate voting shares duly held for that purpose. However, approval is not required in connection with a subdivision on a pro rata basis as between the subordinate voting shares and the multiple voting shares.
Conversion
Each outstanding multiple voting share may, at any time, at the option of the holder, be converted into one subordinate voting share. The subordinate voting shares cannot be converted into any other class of shares.
Subdivision or Consolidation
No subdivision or consolidation of the multiple voting shares or the subordinate voting shares will be made without, concurrently, having the multiple voting shares or subordinate voting shares, as the case may be, subdivided or consolidated under the same conditions.
Liquidation Rights and Other Matters
The equity shares are not redeemable by us or by the holder. Upon the liquidation, dissolution or any distribution of our assets for the purpose of winding up our affairs, the holders of equity shares are entitled to participate equally, on a share-for-share basis, in our remaining property and assets available for distribution to the holders of equity shares.
Undertakings in Favor of Holders of Subordinate Voting Shares
Under applicable Canadian law, an offer to purchase multiple voting shares would not necessarily require that an offer be made to purchase subordinate voting shares. In accordance with the rules of The Toronto Stock Exchange, we and each of Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc., as the beneficial and registered owners of all the outstanding multiple voting shares will enter into a trust agreement prior to the closing of this offering with a third party trustee. Under the trust agreement, Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. will place their multiple voting shares on deposit with the trustee and undertake not to sell or dispose of, directly or indirectly, any multiple voting shares pursuant to a take-over bid, as defined by applicable securities legislation, under circumstances in which securities legislation would have required the same offer or a follow-up offer to be made to all holders of subordinate voting shares if the sale had been of subordinate voting shares rather than multiple voting shares, but otherwise on the same terms. This undertaking does not apply if:
- such sale is made pursuant to an offer to purchase only part of the multiple voting shares made to Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. and an offer, with terms at least as favourable as the terms of the offer to purchase multiple voting shares, is made concurrently to all holders of subordinate voting shares to purchase the same proportionate number of subordinate voting shares at a price per share at least as high as the highest price per share offered in connection with the sale or disposition of the multiple voting shares, which offer has no condition attached other than the right not to take up and pay for the subordinate voting shares tendered if no shares are purchased pursuant to the offer for multiple voting shares; or
- there is a concurrent unconditional offer, with terms at least as favourable as the terms of the offer to purchase multiple voting shares, to purchase all the subordinate voting shares at a price per share at least as high as the highest price per share offered in connection with the sale or disposition of the multiple voting shares.
The trust agreement permits, subject to the prior consent of the trustee as provided for below, certain direct and indirect sales if:
- the sale or disposition is effected within the Lamonde Family at a price which is not over 15% from the average market price established with the formula prescribed by the Securities Act (Quebec);
- the sale or disposition is effected within the Lamonde Family and the transferee is not a party to any agreement under which any other person would participate in the beneficial ownership of, control or direction over more than 50% of the votes attaching to the equity shares held by such transferee; and
- the transferee, if not already a party to the trust agreement, becomes a party to such trust agreement.
The term "Lamonde Family" means:
- Germain Lamonde;
- his spouse, in fact or in law;
- any lineal descendant of Germain Lamonde, born or to be born;
- any trust constituted primarily for the benefit of Germain Lamonde, his spouse, in fact or in law, or any of his descendants, born or to be born; and
- any corporation where 90% of the votes attaching to all outstanding shares and at least 50% of all outstanding shares are controlled by any one or more of the persons listed above;
Under the trust agreement, any direct or indirect sale or disposition of multiple voting shares, including a transfer to a pledgee as security, by a party bound by its terms or any person or corporation which it controls is conditional upon the transferee becoming a party to an agreement on substantially similar terms and conditions as are contained in the trust agreement. The conversion of multiple voting shares into subordinate voting shares shall not constitute a sale or disposition for purposes of the trust agreement.
The trust agreement provides that if a person or corporation carries out an indirect sale or a disposition in respect of any multiple voting shares in contravention of the trust agreement, then no person shall from the time such sale becomes effective and thereafter:
- directly or indirectly sell or dispose of any of such multiple voting shares or convert them into subordinate voting shares, in either case, without the prior written consent of the trustee; or
- exercise any voting rights attaching to such multiple voting shares except in accordance with the written instructions of the trustee.
The trustee may attach conditions to its consent and must exercise its rights in the best interest of the holders of the subordinate voting shares, other than Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. and holders of multiple voting shares who, in the opinion of the trustee, participated directly or indirectly in the transaction that triggered the operation of this provision.
The trust agreement provides that the prior written consent of the trustee shall be required in connection with any sale or disposition of multiple voting shares, whether direct or indirect, by Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. The trustee must give its written consent if it receives evidence satisfactory to it that the sale or disposition is not in contravention of the trust agreement. The trustee also has the right to require from time to time satisfactory evidence to it of the number of equity shares held directly or indirectly by Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc.
The trust agreement contains provisions for the authorization of action by the trustee to enforce the rights under the agreement on behalf of the holders of the subordinate voting shares. The obligation of the trustee to take such action is conditional on the provision of required funds and indemnity by us or holders of subordinate voting shares. No holder of the subordinate voting shares will have the right, other than through the trustee, to institute any action or proceeding or to exercise any other remedy to enforce any rights arising under the trust
agreement unless the trustee fails to act on a request authorized by holders of not less than 10% of the outstanding subordinate voting shares, excluding any subordinate voting shares beneficially held by the Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc. or any holders of multiple voting shares, after provision of reasonable funds and indemnity to the trustee.
The trust agreement provides that it may not be amended and no provision thereof may be waived, without the approval of:
- any Canadian stock exchange upon which the subordinate voting shares are quoted or listed and any other applicable securities regulatory authorities; and
- at least two-thirds of the votes cast by holders of subordinate voting shares.
No provision of the trust agreement limits the rights of any holders of subordinate voting shares under applicable securities legislation.
Mandatory Conversion
The trust agreement also provides that, except as otherwise provided, if at any time:
- members of the Lamonde Family do not beneficially own, directly or indirectly, in any manner, a number of equity shares representing either more than 50% of the votes attaching to all issued and outstanding equity shares or 60% of the total number of multiple voting shares held by them on the closing of this offering (or 22,800,000 multiple voting shares); or
- Germain Lamonde no longer occupies the position of either our Chairman of the Board or our Chief Executive Officer for any reason, including voluntary or forced retirement, death or incapacity,
then all our the multiple voting shares shall be automatically converted into subordinate voting shares, unless such situation is remedied within 60 days from its occurrence or within one year from the occurrence, if such occurrence results from the incapacity of Germain Lamonde. Moreover, if at any time, the Lamonde Family or any of its members sells or otherwise transfers multiple voting shares to a party who is not a member of the Lamonde Family, the transferred shares shall automatically be converted into subordinate voting shares on the date of such sale or transfer.
PREFERRED SHARES
Our board of directors may from time to time issue one or more series of preferred shares. The preferred shares will rank prior to the equity shares with respect to the payment of dividends and the distribution of assets. In the event of our dissolution, the distribution of our assets upon our liquidation or the distribution of all or part of our assets among our shareholders, holders of preferred shares will be entitled to receive, in cash or in property, an amount equal to the value of the consideration paid in respect of the outstanding preferred shares, plus an amount equal to accrued and unpaid dividends, or declared and unpaid dividends and any amount specified in our articles.
PREFERRED SHARES SERIES 1
In addition to the provisions attaching to the preferred shares as a class,
the 800,000 preferred shares series 1 have specific provisions applicable to
them. We are required to redeem all outstanding preferred shares series 1 on
November 30, 2000, by paying to the holders of the preferred shares series 1 a
cash payment of C$1.00 per share. We have the option to convert all of such
shares into subordinate voting shares on November 30, 2000. The number of
subordinate voting shares resulting from such conversion shall be equal to the
result obtained by dividing the aggregate redemption price of the preferred
shares series 1, being the number of preferred shares series 1 outstanding
multiplied by C$1.00 by the conversion price equal to (1) the average closing
prices of the subordinate voting shares for the 10 days of market activity
preceding November 30, 2000; or (2) if the subordinate voting shares have been
traded fewer than 5 days of the 10 days of market activity preceding November
30, 2000, the conversion price is obtained by averaging the closing price or if
the closing
price is not published, the average between the highest and the lowest prices, for each day that there has been trading and the average of the bid and ask prices for each day on which there was no trading. The conversion price will be determined by reference to the market on which the greatest volume of trading of the subordinate voting shares occurred during the 10 day period. Subject to the provisions of the Canada Business Corporation Act, the preferred shares series 1 will not carry any voting rights.
MODIFICATIONS, SUBDIVISIONS AND CONSOLIDATIONS
Under the Canada Business Corporations Act, amendment of the rights of holders of a class of shares, including subordinate voting shares, requires the approval of not less than two-thirds of the votes cast by the holders of those shares voting separately as a class at a special meeting. The Canada Business Corporations Act also gives these holders the right to dissent from the amendment and to require us to pay them the fair value of their shares.
OWNERSHIP RESTRICTIONS
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to non-resident holders of our subordinate voting shares, other than withholding tax requirements.
There is no limitation imposed by Canadian law or by our articles of incorporation or our other charter documents on the right of a non-resident to hold or vote subordinate voting shares, other than as provided by the Investment Canada Act, the North American Free Trade Agreement Implementation Act (Canada) and the World Trade Organization Agreement Implementation Act. The Investment Canada Act requires notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a "non-Canadian" of "control" of a "Canadian business", all as defined in the Investment Canada Act. Generally, the threshold for review will be higher in monetary terms for a member of the World Trade Organization or North American Free Trade Agreement.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the subordinate voting shares in Canada is CIBC Mellon Trust Company, at its principal offices in Montreal, Toronto and Vancouver and in the United States is ChaseMellon Shareholder Services, L.L.C., at its principal office in New York.
SHARES ELIGIBLE FOR FUTURE SALE
The sale of substantial numbers of subordinate voting shares in the public market, or the possibility of this sale, could adversely affect prevailing market prices for our subordinate voting shares.
Upon completion of this offering:
- 6,709,605 of subordinate voting shares will be outstanding;
- 38,000,000 multiple voting shares convertible into 38,000,000 subordinate voting shares will be outstanding;
- 800,000 preferred shares series 1 convertible into 25,766 subordinate voting shares, assuming a conversion price of $21.00 per share, will be outstanding; and
- 4,470,961 subordinate voting shares will be issuable under our stock option plan, including 581,280 subordinate voting shares to be issued upon the exercise of the options to be granted to employees prior to the closing of this offering at an exercise price equal to the initial public offering price.
All of the subordinate voting shares sold in this offering in the United States and Canada will be freely tradeable without restriction under either the U.S. Securities Act, except by "affiliates" as defined in Rule 144
under the U.S. Securities Act, or applicable Canadian securities laws, except by "control persons" as defined under these laws.
Each of our officers, directors and shareholders have agreed that they will not dispose of or hedge any of their shares for at least 180 days following the date of this prospectus.
CANADIAN RESALE RESTRICTIONS
Under applicable Canadian securities laws, all of the subordinate voting shares outstanding immediately prior to this offering and all subordinate voting shares issuable upon the conversion of all other classes of shares outstanding and resulting from the conversion of the preferred shares series 1, outstanding immediately prior to this offering and the subordinate voting shares resulting from the exercise of options granted prior to this offering held by Canadian residents may not be sold or otherwise disposed of for value in Canada, except through or with a prospectus, a discretionary exemption or a statutory exemption available only in specific limited circumstances or until we have been a reporting issuer for the prescribed period of time, as applicable, and disclosure to applicable Canadian securities regulatory authorities has been made. We will become a reporting issuer in all the provinces of Canada when we file this prospectus with the securities regulatory authorities of those provinces and when those authorities issue receipts for the prospectus. We expect that the receipts will be issued on or about the date of this prospectus. We are applying to the applicable regulatory authorities for a discretionary exemption to permit the resale of shares without a prospectus required. In addition, sales of our subordinate voting shares in Canada by our majority shareholder will also be restricted.
U.S. RESALE RESTRICTIONS
In general, under Rule 144, as in effect on the date of this prospectus, any person, including our affiliates, who has beneficially owned subordinate voting shares for at least one year will be entitled to sell, in any three- month period, a number of shares that (together with subordinate voting shares with which the person's shares must be aggregated) does not exceed the greater of:
- 1% of the then outstanding subordinate voting shares; and
- the average weekly trading volume of the subordinate voting shares on the Nasdaq National Market during the four calendar weeks immediately preceding the filing of a Form 144 with respect to the sale.
Sales of restricted securities under Rule 144 must also satisfy requirements relating to manner of sale, notice and availability of current public information about us. Our affiliates must also comply with the restrictions and requirements of Rule 144, other than the one-year holding period requirement, in order to sell subordinate voting shares which are not restricted securities.
We intend to file with the SEC a registration statement on Form S-8 within approximately 180 days after the date of this prospectus. The S-8 registration statement will allow holders of subordinate voting shares who are residents of the United States and countries other than Canada to resell subordinate voting shares issued under equity incentive arrangements and subordinate voting shares issued in connection with option exercises.
OTHER RESALE RESTRICTIONS
Of the 709,605 subordinate voting shares issued to our employees under the 1998 Stock Purchase Plan, 256,017 subordinate voting shares will be held in trust and restricted from resale until dates ranging from October 21, 2003 to January 20, 2004 and the balance will be held in trust and restricted from resale until August 31, 2004. See "Management -- Share Plan."
TAX CONSIDERATIONS
UNITED STATES TAXATION
In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, the information set forth below under the caption "United States Taxation" is a summary of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of subordinate voting shares by a U.S. Holder, as defined below. These discussions are not a complete analysis or listing of all of the possible tax consequences of such transactions and do not address all tax considerations that may be relevant to particular holders in light of their personal circumstances or to persons that are subject to special tax rules. In particular, the information set forth under the caption "United States Taxation" deals only with U.S. Holders that will hold subordinate voting shares as capital assets within the meaning of the Internal Revenue Code of 1986, as amended, and who do not at any time own individually, nor are treated as owning 10% or more of the total combined voting power of all classes of our stock entitled to vote. In addition, this description of U.S. tax consequences does not address the tax treatment of special classes of U.S. Holders, such as banks, tax-exempt entities, insurance companies, persons holding subordinate voting shares as part of a hedging or conversion transaction or as part of a "straddle," U.S. expatriates, persons subject to the alternative minimum tax, dealers or traders in securities or currencies and holders whose "functional currency" is not the U.S. dollar. This summary does not address estate and gift tax consequences or tax consequences under any foreign, state or local laws other than as provided in the section entitled "Canadian Federal Income Tax Considerations" provided below.
As used in this section, the term "U.S. Holder" means:
(a) an individual citizen or resident of the United States;
(b) a corporation created or organized under the laws of the United States or any state thereof including the District of Columbia;
(c) an estate the income of which is subject to United States federal income taxation regardless of its source;
(d) a trust if a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have authority to control all substantial decisions of the trust; or
(e) a partnership to the extent the interests therein are owned by any of the persons described in clauses (a), (b), (c) or (d) above.
Holders of subordinate voting shares who are not U.S. Holders, sometimes referred to as "Non-U.S. Holders", should also consult their own tax advisors, particularly as to the applicability of any tax treaty.
The following discussion is based upon:
- the Internal Revenue Code;
- U.S. judicial decisions;
- administrative pronouncements;
- existing and proposed Treasury regulations; and
- the Canada -- U.S. Income Tax Treaty.
Any of the above is subject to change, possibly with retroactive effect. We have not requested, and will not request, a ruling from the U.S. Internal Revenue Service with respect to any of the U.S. federal income tax consequences described below, and as a result, there can be no assurance that the U.S. Internal Revenue Service will not disagree with or challenge any of the conclusions we have reached and describe here.
POTENTIAL PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR CONSEQUENCES TO THEM UNDER U.S. FEDERAL, STATE, LOCAL AND APPLICABLE FOREIGN TAX LAWS OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SUBORDINATE VOTING SHARES.
Dividends
Subject to the discussion of passive foreign investment companies below, the gross amount of any distribution paid by us to a U.S. Holder will generally be subject to U.S. federal income tax as foreign source dividend income to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. The amount of any distribution of property other than cash will be the fair market value of such property on the date of the distribution. Dividends received by a U.S. Holder will not be eligible for the dividends received deduction allowed to corporations. To the extent that an amount received by a U.S. Holder exceeds such holder's allocable share of our current and accumulated earnings and profits, such excess will be applied first to reduce such U.S. Holder's tax basis in his subordinate voting shares, thereby increasing the amount of gain or decreasing the amount of loss recognized on a subsequent disposition of the subordinate voting shares. Then, to the extent such distribution exceeds such U.S. Holder's tax basis, it will be treated as capital gain. We do not currently maintain calculations of our earnings and profits for U.S. federal income tax purposes.
The gross amount of distributions paid in Canadian dollars, or any successor or other foreign currency, will be included in the income of such U.S. Holder in a dollar amount calculated by reference to the spot exchange rate in effect on the day the distributions are paid regardless of whether the payment is in fact converted into U.S. dollars. If the Canadian dollars, or any successor or other foreign currency, are converted into U.S. dollars on the date of the payment, the U.S. Holder should not be required to recognize any foreign currency gain or loss with respect to the receipt of Canadian dollars as distributions. If, instead, the Canadian dollars are converted at a later date, any currency gains or losses resulting from the conversion of the Canadian dollars will be treated as U.S. source ordinary income or loss. Any amounts recognized as dividends will generally constitute foreign source "passive income" or, in the case of certain U.S. Holders, "financial services income" for U.S. foreign tax credit purposes. A U.S. Holder will have a basis in any Canadian dollars distributed equal to their dollar value on the payment date.
A Non-U.S. Holder of subordinate voting shares generally will not be subject to U.S. federal income or withholding tax on dividends received on subordinate voting shares unless such income is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States.
Sale or Exchange
A U.S. Holder's initial tax basis in the subordinate voting shares will generally be cost to the holder. A U.S. Holder's adjusted tax basis in the subordinate voting shares will generally be the same as cost, but may differ for various reasons including the receipt by such holder of a distribution that was not made up wholly of earnings and profits as described above under the heading "Dividends." Subject to the discussion of passive foreign investment companies below, gain or loss realized by a U.S. Holder on the sale or other disposition of subordinate voting shares will be subject to U.S. federal income taxation as capital gain or loss in an amount equal to the difference between the U.S. Holder's adjusted tax basis in the subordinate voting shares and the amount realized on the disposition. In the case of a non-corporate U.S. Holder, the federal tax rate applicable to capital gains will depend upon:
- the holder's holding period for the subordinate voting shares, with a preferential rate available for subordinate voting shares held for more than one year; and
- the holder's marginal tax rate for ordinary income.
Any gain realized will generally be treated as U.S. source gain and loss realized by a U.S. Holder generally also will be treated as from sources within the United States.
The ability of a U.S. Holder to utilize foreign taxes as a credit to offset
U.S. taxes is subject to complex limitations and conditions. The consequences of
the separate limitation calculation will depend upon the nature and sources of
each U.S. Holder's income and the deductions allocable thereto. Alternatively, a
U.S. Holder may elect to claim all foreign taxes paid as an itemized deduction
in lieu of claiming a foreign tax credit. A deduction does not reduce U.S. tax
on a dollar-for-dollar basis like a tax credit, but the availability of the
deduction is not subject to the same conditions and limitations applicable to
foreign tax credits.
If a U.S. Holder receives any foreign currency on the sale of subordinate voting shares, such U.S. Holder may recognize ordinary income or loss as a result of currency fluctuations between the date of the sale of subordinate voting shares and the date the sale proceeds are converted into U.S. dollars.
A Non-U.S. Holder of subordinate voting shares generally will not be subject to U.S. federal income or withholding tax on any gain realized on the sale or exchange of such subordinate voting shares unless:
- such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States; or
- in the case of any gain realized by an individual Non-U.S. Holder, such Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of such sale and certain other conditions are met.
Personal Holding Company
We could be classified as a personal holding company for U.S. federal income tax purposes if both of the following tests are satisfied:
- if at any time during the last half of our taxable year, five or fewer individuals own or are deemed to own more than 50% of the total value of our shares; and
- we receive 60% or more of our U.S. related gross income from specified passive sources, such as royalty payments.
A personal holding company is taxed on a portion of its undistributed U.S. source income, including specific types of foreign source income which are connected with the conduct of a U.S. trade or business, to the extent this income is not distributed to shareholders. We do not believe we are a personal holding company presently and we do not expect to become one. However, we can not assure you that we will not qualify as a personal holding company in the future.
Foreign Personal Holding Company
We could be classified as a foreign personal holding company if in any taxable year both of the following tests are satisfied:
- five or fewer individuals who are United States citizens or residents own or are deemed to own more than 50% of the total voting power of all classes of our shares entitled to vote or the total value of our shares; and
- at least 60%, 50% in some cases, of our gross income, as adjusted, consists of "foreign personal holding company income", which generally includes passive income such as dividends, interests, gains from the sale or exchange of shares or securities, rent and royalties.
If we are classified as a foreign personal holding company and if you hold shares in us, you may have to include in your gross income as a dividend your pro rata portion of our undistributed foreign personal holding company income. If you dispose of your shares prior to such date, you will not be subject to tax under these rules. We do not believe we are a foreign personal holding company presently and we do not expect to become one. However, we can not assure you that we will not qualify as a foreign personal holding company in the future.
Passive Foreign Investment Company
We believe that our subordinate voting shares should not currently be treated as stock of a passive foreign investment company for United States federal income tax purposes, but this conclusion is a factual determination made annually and thus may be subject to change based on future operations. In general, we will be a passive foreign investment company with respect to a U.S. Holder if, for any taxable year in which the U.S. Holder holds our subordinate voting shares, either:
- at least 75% of our gross income for the taxable year is passive income; or
- at least 50% of the average value of our assets is attributable to assets that produce or are held for the production of passive income.
For this purpose, passive income includes income such as:
- dividends;
- interest;
- rents or royalties, other than certain rents or royalties derived from the active conduct of trade or business;
- annuities; or
- gains from assets that produce passive income.
If a foreign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation is treated for purposes of the passive foreign investment company tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation's income.
If we are treated as a passive foreign investment company, a U.S. Holder that did not make a qualified electing fund election or, if available, a mark-to-market election, as described below, would be subject to special rules with respect to:
- any gain realized on the sale or other disposition of subordinate voting shares; and
- any "excess distribution" by us to the U.S. Holder.
Generally, "excess distributions" are any distributions to the U.S. Holder in respect of the subordinate voting shares during a single taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder in respect of the subordinate voting shares during the three preceding taxable years or, if shorter, the U.S. Holder's holding period for the subordinate voting shares.
Under the passive foreign investment company rules,
- the gain or excess distribution would be allocated ratably over the U.S. Holder's holding period for the subordinate voting shares;
- the amount allocated to the taxable year in which the gain or excess distribution was realized would be taxable as ordinary income;
- the amount allocated to each prior year, with certain exceptions, would be subject to tax at the highest tax rate in effect for that year; and
- the interest charge generally applicable to underpayments of tax would be imposed in respect of the tax attributable to each such year.
A U.S. Holder owning actually or constructively "marketable stock" of a passive foreign investment company may be able to avoid the imposition of the passive foreign investment company tax rules described above by making a mark-to-market election. Generally, pursuant to this election, such holder would include in ordinary income, for each taxable year during which such stock is held, an amount equal to the increase in value of the stock, which increase will be determined by reference to the value of such stock at the end of the current taxable year compared with their value as of the end of the prior taxable year. Holders desiring to make the mark-to-market election should consult their tax advisors with respect to the application and effect of making such election.
In the case of a U.S. Holder who does not make a mark-to-market election, the special passive foreign investment company tax rules described above will not apply to such U.S. Holder if the U.S. Holder makes an election to have us treated as a qualified electing fund and we provide certain required information to holders. For a U.S. Holder to make a qualified electing fund election, we would have to satisfy certain reporting requirements. We have not determined whether we will undertake the necessary measures to be able to satisfy such requirements in the event that we were treated as a passive foreign investment company.
A U.S. Holder that makes a qualified electing fund election will be currently taxable on its pro rata share of our ordinary earnings and net capital gain, at ordinary income and capital gains rates, respectively, for each of our taxable years, regardless of whether or not distributions were received. The U.S. Holder's basis in the subordinate voting shares will be increased to reflect taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in the subordinate voting shares and will not be taxed again as a distribution to the U.S. Holder. U.S. Holders desiring to make a qualified electing fund election should consult their tax advisors with respect to the advisability of making such election.
UNITED STATES BACKUP WITHHOLDING AND INFORMATION REPORTING
A U.S. Holder may be subject to information reporting with respect to dividends paid on, or proceeds of the sale or other disposition of, our subordinate voting shares, unless the U.S. Holder is a corporation or comes within certain other categories of exempt recipients. A U.S. Holder that is not an exempt recipient may be subject to backup withholding at a rate of 31% with respect to the proceeds from the sale or the disposition of, or with respect to dividends on, subordinate voting shares unless the U.S. Holder provides a taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under these rules will be creditable against the U.S. Holder's U.S. federal income tax liability or refundable to the extent that it exceeds such liability. A U.S Holder who does not provide a correct taxpayer identification number may be subject to penalties imposed by the United States Internal Revenue Service.
Non-U.S. Holders may be subject to information reporting and possible backup withholding with respect to the proceeds of the sale or other disposition of subordinate voting shares effected within the United States, unless the holder certifies to its foreign status or otherwise establishes an exemption if the broker does not have actual knowledge that the holder is a U.S. holder.
Treasury regulations will modify certain of the rules discussed above with respect to payments on the subordinate voting shares made after December 31, 2000. In particular, a payor within the United States will be required to withhold 31% of any payments of dividends on or proceeds from the sale of subordinate voting shares within the United States to a non-exempt U.S. or Non-U.S. Holder if such holder fails to provide appropriate certification. In the case of such payments by a payor within the United States to a foreign partnership other than a foreign partnership that qualifies as a "withholding foreign partnership" within the meaning of such Treasury regulations, the partners of such partnership will be required to provide the certification discussed above in order to establish an exemption from backup withholding tax and information reporting requirements.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Fasken Martineau DuMoulin LLP, the following is a summary of the material Canadian federal income tax considerations generally applicable to a U.S. person who holds subordinate voting shares and who, for the purposes of the Income Tax Act (Canada), or the ITA, and the Canada-United States Income Tax Convention (1980), or the Convention, as applicable and at all relevant times:
- is resident in the United States and not resident in Canada,
- holds the subordinate voting shares as capital property,
- does not have a "permanent establishment" or "fixed base" in Canada, as defined in the Convention; and
- deals at arm's length with us. Special rules, which are not discussed below, may apply to "financial institutions", as defined in the ITA, and to non-resident insurers carrying on an insurance business in Canada and elsewhere.
This discussion is based on the current provisions of the ITA and the regulations promulgated under the ITA and the Convention, all specific proposals to amend the ITA or the regulations promulgated under the ITA announced by or on behalf of the Canadian Minister of Finance prior to the date of this Offering Circular and the current published administrative practices of the Canada Customs and Revenue Agency, or the Agency. It does
not otherwise take into account or anticipate any changes in law or administrative practice nor any income tax laws or considerations of any province or territory of Canada or any jurisdiction other than Canada, which may differ from the Canadian federal income tax consequences described in this document.
Under the ITA and the Convention, dividends paid or credited, or deemed to be paid or credited, on the subordinate voting shares to a U.S. person who owns less than 10% of the voting shares will be subject to Canadian withholding tax at the rate of 15% of the gross amount of those dividends or deemed dividends. If a U.S. person is a corporation and owns 10% or more of the voting shares, the rate is reduced from 15% to 5%. As described above and subject to specified limitations, a U.S. person may be entitled to credit against U.S. federal income tax liability for the amount of tax withheld by Canada.
Under the Convention, dividends paid to specified religious, scientific, charitable and similar tax exempt organizations and specified organizations that are resident and exempt from tax in the United States and that have complied with specified administrative procedures are exempt from this Canadian withholding tax.
A capital gain realized by a U.S. person on a disposition or deemed disposition of the subordinate voting shares will not be subject to tax under the ITA unless the subordinate voting shares constitute taxable Canadian property within the meaning of the ITA at the time of the disposition or deemed disposition. In general, the subordinate voting shares will not be "taxable Canadian property" to a U.S. person if they are listed on a prescribed stock exchange, which includes The Toronto Stock Exchange, unless, at any time within the five-year period immediately preceding the dispositions, the U.S. person, persons with whom the U.S. person did not deal at arm's length, or the U.S. person together with those persons, owned or had an interest in or a right to acquire more than 25% of any class or series of our shares.
If the subordinate voting shares are taxable Canadian property to a U.S. person, any capital gain realized on a disposition or deemed disposition of those subordinate voting shares will generally be exempt from tax under the ITA by virtue of the Convention if the value of the subordinate voting shares at the time of the disposition or deemed disposition is not derived principally from real property, as defined by the Convention, situated in Canada. The determination as to whether Canadian tax would be applicable on a disposition or deemed disposition of the subordinate voting shares must be made at the time of the disposition or deemed disposition.
POTENTIAL PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM, INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS, OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SUBORDINATE VOTING SHARES.
UNDERWRITING
Subject to the terms and conditions described in a purchase agreement among us and the underwriters named below, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Dominion Securities Inc., Wit SoundView Corporation and CIBC World Markets Inc., are acting as representatives, we have agreed to sell to the underwriters and the underwriters severally have agreed to purchase from us, the number of shares listed opposite their names below.
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................
RBC Dominion Securities Inc.................................
Wit SoundView Corporation...................................
CIBC World Markets Inc......................................
---------
Total........................................... 6,000,000
=========
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In the purchase agreement, each of the underwriters have severally agreed to purchase all of the shares sold under the purchase agreement if any of these shares are purchased. The obligations of the underwriters under the purchase agreement may be terminated at their discretion on the basis of their assessment of the state of the financial markets and also upon the occurrence of certain stated events. Under the purchase agreement, the commitments of non-defaulting underwriters may be increased.
This offering is being made concurrently in the United States and in all of the provinces of Canada. The subordinate voting shares will be offered in the United States and Canada through the underwriters either directly or through their respective U.S. or Canadian registered broker-dealer affiliates or agents. Subject to applicable law, the underwriters may offer the subordinate voting shares outside of Canada and the United States.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the U.S. Securities Act and applicable Canadian securities legislation, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares and other conditions contained in the purchase agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
The subordinate voting shares will be ready for delivery in New York, New York on or about , 2000.
COMMISSIONS
The representatives have advised us that the underwriters propose initially to offer the shares to the public at the initial public offering price on the cover page of this prospectus. With respect to the offering in the United States, the underwriters may offer the shares to dealers at the initial public offering price less a concession not in excess of $ per share and the underwriters may allow and the dealers may reallow, a discount not in excess of $ per share to other dealers. After the initial public offering, the public offering price, concession and discount may be changed.
The following table shows the public offering price, underwriting commission and proceeds before expenses to EXFO. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.
PER SHARE WITHOUT OPTION WITH OPTION
--------- -------------- -----------
Public offering price................ $ $ $
Underwriting discount................ $ $ $
Proceeds, before expenses, to EXFO... $ $ $
|
The public offering price for subordinate voting shares offered in the United States is payable in U.S. dollars and the public offering price for subordinate voting shares offered in Canada is payable in Canadian dollars. The U.S. dollar amount is the equivalent of the Canadian price of the subordinate voting shares based on the prevailing U.S. -- Canadian dollar exchange rate as of the date of this prospectus. See "Exchange Rate Information."
The expenses of this offering, not including the underwriting commission, are estimated at $1,000,000 and are payable by EXFO.
OVER-ALLOTMENT OPTION
We have granted options to the underwriters to purchase up to 900,000 additional shares at the public offering price less the underwriting commission. The underwriters may exercise these options for 30 days from the date of this prospectus solely to cover any over-allotments. If the underwriters exercise these options, each will be obligated, subject to conditions contained in the purchase agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount reflected in the above table.
RESERVED SHARES
At our request, the underwriters have reserved for sale, at the initial public offering price, up to 7% of the shares offered by this prospectus for sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not orally confirmed for purchase within one day of the pricing of this offering will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus. No commitment to purchase reserved shares will be accepted until after the registration statement of which this prospectus is a part is effective and a public offering price has been established.
NO SALES OF SIMILAR SECURITIES
We and our executive officers and directors and all existing shareholders have agreed not to sell or transfer any subordinate voting shares for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch. Specifically, we and these other individuals have agreed not to directly or indirectly:
- offer, pledge, sell or contract to sell any subordinate voting shares;
- sell any option or contract to purchase any subordinate voting shares;
- purchase any option or contract to sell any subordinate voting shares;
- grant any option, right or warrant for the sale of any subordinate voting shares;
- lend or otherwise dispose of or transfer any subordinate voting shares;
- request or demand that we file a registration statement related to the subordinate voting shares; or
- enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any subordinate voting shares whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.
This lockup provision applies to subordinate voting shares and to securities convertible into or exchangeable or exercisable for or repayable with subordinate voting shares. It also applies to subordinate voting shares owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.
NASDAQ NATIONAL MARKET AND TORONTO STOCK EXCHANGE LISTINGS AND FACTORS CONSIDERED IN DETERMINING THE INITIAL PUBLIC OFFERING PRICE
We expect the shares to be approved for quotation on the Nasdaq National Market, subject to notice of issuance, under the symbol "EXFO" and that the shares will be approved for listing on The Toronto Stock Exchange. The quotation on the Nasdaq National Market and the listing on The Toronto Stock Exchange are subject to our fulfilling all of the requirements of the Nasdaq National Market and The Toronto Stock Exchange, including the distribution of the subordinate voting shares to a minimum number of public shareholders.
Before this offering, there has been no public market for our subordinate voting shares. The initial public offering price will be determined through negotiations among us and the underwriters. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:
- the valuation multiples of publicly traded companies that the underwriters believe to be comparable to us;
- our financial information;
- the history of, and the prospects for, our company and the industry in which we compete;
- an assessment of our management, its past and present operations and the prospects for and timing of, our future sales;
- the present state of our development; and
- the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.
An active trading market for the shares may not develop. It is also possible that after this offering the shares will not trade in the public market at or above the initial public offering price.
The underwriters do not expect to sell more that 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.
ELECTRONIC PROSPECTUS
Merrill Lynch will be facilitating Internet distribution for this offering to certain of its Internet subscription customers. Merrill Lynch intends to allocate a limited number of shares for sale to its online brokerage customers. An electronic prospectus is available on the Web site maintained by Merrill Lynch. Other than the prospectus in electronic format, the information on the Merrill Lynch Web site relating to this offering is not a part of this prospectus.
A prospectus in electronic format is being made available on an Internet Web site maintained by Wit SoundView's affiliate, Wit Capital Corporation. Other than the prospectus in electronic format, the information on Wit Capital's Web site and any information contained on any other Web site maintained by Wit Capital is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.
PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS
Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our subordinate voting shares. However, the underwriters may engage in transactions that stabilize the price of subordinate voting shares, such as bids or purchases to peg, fix or maintain that price.
If the underwriters create a short position in the subordinate voting
shares in connection with this offering, i.e., if they sell more shares than are
listed on the cover of this prospectus, the underwriters may reduce that short
position by purchasing shares in the open market. The underwriters may also
elect to reduce any short position by exercising all or part of the
over-allotment option described above. Purchases of the subordinate voting
shares
to stabilize its price or to reduce a short position may cause the price of the subordinate voting shares to be higher than it might be in the absence of such purchases.
The underwriters may also impose a penalty bid on underwriters and selling group members. This means that if the underwriters purchase shares in the open market to reduce the underwriter's short position or to stabilize the price of such shares, they may reclaim the amount of the selling concession from the underwriters and the selling group members who sold those shares. The imposition of a penalty bid may also affect the price of the shares in that it discourages resales of those shares.
Pursuant to policy statements of the Commission des valeurs mobilieres du Quebec and the Ontario Securities Commission, the underwriters in Canada may not, throughout the period of distribution, bid for or purchase subordinate voting shares. The foregoing restriction is subject to certain exceptions, on the condition that the bid or purchase not be engaged in for the purpose of creating actual or apparent active trading in, or raising the price of, the subordinate voting shares. Such exceptions include a bid or purchase permitted under the by-laws and rules of The Toronto Stock Exchange relating to market stabilization and passive market making activities and a bid or purchase made for and on behalf of a customer where the order was not solicited during the period of distribution. We have been advised that in connection with this offering and pursuant to the first exception mentioned above, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the subordinate voting shares at levels other than those that might otherwise prevail on the open market. These transactions, if commenced, may be discontinued at any time.
Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the subordinate voting shares. In addition, neither we nor any of the underwriters makes any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
LEGAL MATTERS
Legal matters relating to this offering as to Canadian law and the validity of the subordinate voting shares offered in this offering are being passed upon for us by Fasken Martineau DuMoulin LLP, Montreal, Quebec. Legal matters relating to this offering as to New York and United States law will be passed upon for us by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York. Legal matters relating to this offering as to Canadian law are being passed upon for the underwriters by Ogilvy Renault, a general partnership, Montreal, Quebec. Legal matters relating to this offering as to New York and United States law are being passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, Toronto, Ontario.
EXPERTS
The consolidated financial statements included in this prospectus as of August 31, 1998 and 1999 and for the years ended August 31, 1997, 1998 and 1999 included in this prospectus have been audited by PricewaterhouseCoopers LLP, Chartered Accountants in Canada and are included in reliance upon such reports given on the authority of PricewaterhouseCoopers LLP as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, a registration statement on Form F-1 under the Securities Act for subordinate voting shares offered by this prospectus. We have not included in this prospectus all the information contained in the registration statement and you should refer to the registration statement and its exhibits for further information.
Any statement in this prospectus about any of our contracts or other documents is not necessarily complete. If the contract or document is filed as an exhibit to the registration statement, the contract or document is deemed to modify the description contained in this prospectus. You must review the exhibits themselves for a complete description of the contract or document.
You may review a copy of the registration statement, including exhibits and schedules filed with it, at the SEC's public reference facilities in Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC located at 7 World Trade Center, 13th Floor, New York, New York 10048 and at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You may also obtain copies of such materials from the Public Reference Section of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC such as us.
You may read and copy any reports, statements or other information that we file with the SEC at the addresses indicated above and you may also access them electronically at the Web site set forth above. These SEC filings are also available to the public from commercial document retrieval services.
Prior to this offering, we have not been required to file reports with the SEC. Following consummation of this offering, we will be required to file reports and other information with the SEC under the Securities Exchange Act of 1934. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Under the Exchange Act, as a foreign private issuer, we are not required to publish financial statements as frequently or as promptly as United States companies.
INDEX TO OUR CONSOLIDATED FINANCIAL STATEMENTS
DESCRIPTION PAGE ----------- ---- Auditors' Report............................................ F-2 Consolidated balance sheets as at August 31, 1998 and 1999 and February 29, 2000 (unaudited)......................... F-3 Consolidated statements of earnings for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 (unaudited)....... F-4 Consolidated statements of retained earnings for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 (unaudited)............................................... F-5 Consolidated statements of cash flows for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 (unaudited)....... F-6 Notes to the consolidated financial statements.............. F-7 |
AUDITORS' REPORT
To the Directors of
EXFO ELECTRO-OPTICAL ENGINEERING INC.
We have audited the consolidated balance sheets of EXFO ELECTRO-OPTICAL ENGINEERING INC. as at August 31, 1999 and 1998 and the EXFO ELECTRO-OPTICAL ENGINEERING INC. statements of earnings, retained earnings and cash flows for each of the years in the three-year period ended August 31, 1999. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at August 31, 1999 and 1998 and the results of its operations and its cash flows for each of the years in the three-year period ended in accordance with Canadian generally accepted accounting principles.
LOGO
CHARTERED ACCOUNTANTS
Quebec, Quebec, Canada
October 15, 1999
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE
In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there is a change in accounting principles that has a material effect on the comparability of the company's financial statements, such as the change described in note 2 to the financial statements. Our report to the shareholders dated October 15, 1999, is expressed in accordance with Canadian reporting standards which do not require a reference to such a change in accounting principles in the auditor's report when the change is properly accounted for and adequately disclosed in the financial statements.
LOGO
CHARTERED ACCOUNTANTS
Quebec, Quebec, Canada
October 15, 1999
EXFO ELECTRO-OPTICAL ENGINEERING INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
AS AT
AS AT AUGUST 31, FEBRUARY 29,
------------------- ------------
1998 1999 2000
-------- ------- ------------
(NOTE 3) (UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 1,262 $ 423 $ 539
Short-term investments (notes 9 and 19)................... 1,338 1,371 --
Accounts receivable (notes 5 and 9)....................... 6,020 9,895 15,934
Income taxes receivable (note 9).......................... -- 381 1,533
Inventories (notes 6 and 9)............................... 6,332 7,591 11,878
Prepaid expenses and deposits............................. 270 475 465
------- ------- -------
15,222 20,136 30,349
CAPITAL ASSETS (notes 7 and 9)............................ 2,315 2,639 4,161
GOODWILL AND OTHER ASSETS (notes 8 and 9)................. 106 65 2,562
------- ------- -------
$17,643 $22,840 $37,072
======= ======= =======
LIABILITIES
CURRENT LIABILITIES
Bank advances (note 9).................................... $ 136 $ -- $ 5,351
Accounts payable and accrued liabilities (note 10)........ 3,558 5,523 8,652
Income taxes payable...................................... 115 -- --
Dividend payable.......................................... -- 51 --
Mandatorily redeemable preferred shares (note 11)......... -- -- 555
Loan from a company under common control (note 15)........ 1,337 1,337 1,388
Deferred revenue.......................................... -- 218 341
Current portion of long-term debt......................... 20 -- 350
Future income taxes (note 17)............................. 259 262 134
------- ------- -------
5,425 7,391 16,771
DEFERRED REVENUE.......................................... -- 109 61
DEFERRED GRANTS........................................... -- 533 813
LONG-TERM DEBT (note 12).................................. -- -- 283
FUTURE INCOME TAXES (note 17)............................. 173 128 96
------- ------- -------
5,598 8,161 18,024
------- ------- -------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (note 13)................................... 1 87 104
CUMULATIVE TRANSLATION ADJUSTMENT......................... -- -- 640
RETAINED EARNINGS......................................... 12,044 14,592 18,304
------- ------- -------
12,045 14,679 19,048
------- ------- -------
$17,643 $22,840 $37,072
======= ======= =======
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The accompanying notes are an integral part of these consolidated financial statements.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of U.S. dollars, except share and per share data)
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
------------------------------ ---------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
SALES (note 18)............................... $24,475 $31,605 $42,166 $18,728 $29,111
COST OF SALES................................. 9,652 11,345 14,998 7,021 9,609
------- ------- ------- ------- -------
GROSS MARGIN.................................. 14,823 20,260 27,168 11,707 19,502
------- ------- ------- ------- -------
OPERATING EXPENSES
Selling and administrative.................... 7,827 9,898 13,279 5,964 9,938
Net research and development (note 15)........ 1,592 3,014 4,315 1,791 3,221
Amortization of capital assets................ 465 609 857 401 590
Amortization of other assets.................. 14 48 41 21 21
------- ------- ------- ------- -------
TOTAL OPERATING EXPENSES...................... 9,898 13,569 18,492 8,177 13,770
------- ------- ------- ------- -------
EARNINGS FROM OPERATIONS...................... 4,925 6,691 8,676 3,530 5,732
Interest expense (income) -- net.............. 89 (40) (136) (46) (25)
Foreign exchange loss (gain).................. 184 (126) 506 398 116
------- ------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES AND AMORTIZATION
OF GOODWILL................................. 4,652 6,857 8,306 3,178 5,641
INCOME TAXES (note 17)........................ 1,582 2,356 2,492 958 1,887
------- ------- ------- ------- -------
EARNINGS BEFORE AMORTIZATION OF GOODWILL...... 3,070 4,501 5,814 2,220 3,754
AMORTIZATION OF GOODWILL...................... -- -- -- -- 42
------- ------- ------- ------- -------
NET EARNINGS FOR THE PERIOD................... $ 3,070 $ 4,501 $ 5,814 $ 2,220 $ 3,712
======= ======= ======= ======= =======
BASIC AND FULLY DILUTED EARNINGS PER SHARE
Earnings before amortization of goodwill.... $ 0.08 $ 0.12 $ 0.14 $ 0.05 $ 0.10
Net earnings................................ $ 0.08 $ 0.12 $ 0.14 $ 0.05 $ 0.10
BASIC WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (000'S)......................... 38,000 38,000 38,001 38,000 38,425
|
The accompanying notes are an integral part of these consolidated financial statements.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(in thousands of U.S. dollars, except per share data)
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
BALANCE -- BEGINNING OF PERIOD... $ 4,673 $ 7,643 $12,044 $12,044 $14,592
ADD
Net earnings for the period...... 3,070 4,501 5,814 2,220 3,712
-------- ------- ------- ------- -------
7,743 12,144 17,858 14,264 18,304
-------- ------- ------- ------- -------
DEDUCT
Dividends
Class A shares................. -- -- 2,926 -- --
Class C share (note 4)......... -- -- 340 340 --
Class E shares................. 100 100 -- -- --
-------- ------- ------- ------- -------
100 100 3,266 340 --
-------- ------- ------- ------- -------
BALANCE -- END OF PERIOD......... $ 7,643 $12,044 $14,592 $13,924 $18,304
======== ======= ======= ======= =======
DIVIDENDS PER SHARE
Class A shares................. $ -- $ -- $ 0.08 $ -- $ --
Class C share.................. $ -- $ -- $ 340 $ 340 $ --
Class E shares................. $ 0.005 $ 0.005 $ -- $ -- $ --
|
The accompanying notes are an integral part of these consolidated financial statements.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings for the period................ $ 3,070 $ 4,501 $ 5,814 $ 2,220 $ 3,712
Add (deduct) items not affecting cash and
cash equivalents
Amortization of capital assets........... 465 609 857 401 590
Amortization of goodwill and other
assets................................. 14 48 41 21 63
Foreign exchange loss.................... -- -- -- -- 3
Future income taxes...................... 6 289 (42) (65) 24
Change in non-cash operating working
capital items
Accounts receivable...................... (644) (1,297) (3,875) (1,816) (5,028)
Income taxes receivable.................. 741 -- (381) (348) (538)
Inventories.............................. (607) (758) (1,259) (555) (3,243)
Prepaid expenses and deposits............ (26) (117) (205) 19 47
Accounts payable and accrued
liabilities............................ 970 369 1,965 233 1,907
Income taxes payable..................... 605 (490) (115) (115) --
Deferred revenue......................... -- -- 327 175 75
Deferred grants.......................... -- -- 533 295 255
------- ------- ------- ------- -------
4,594 3,154 3,660 465 (2,133)
------- ------- ------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank advances.............................. (2,731) (142) (136) 61 4,552
Repayment of long-term debt................ (243) (21) (20) (10) (16)
Issuance of share capital.................. -- -- 86 -- 17
Dividends paid............................. (100) (100) (3,215) (340) (51)
------- ------- ------- ------- -------
(3,074) (263) (3,285) (289) 4,502
------- ------- ------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Short-term investments..................... (604) (647) (33) (34) 1,400
Additions to capital assets................ (1,044) (1,336) (1,181) (540) (1,587)
Business combination, net of cash and cash
equivalents acquired (note 4)............ -- -- -- -- (2,108)
------- ------- ------- ------- -------
(1,648) (1,983) (1,214) (574) (2,295)
------- ------- ------- ------- -------
CHANGE IN CASH AND CASH EQUIVALENTS........ (128) 908 (839) (398) 74
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS................ -- -- -- -- 42
CASH AND CASH EQUIVALENTS -- BEGINNING OF
PERIOD................................... 482 354 1,262 1,262 423
------- ------- ------- ------- -------
CASH AND CASH EQUIVALENTS -- END OF
PERIOD................................... $ 354 $ 1,262 $ 423 $ 864 $ 539
======= ======= ======= ======= =======
SUPPLEMENTARY INFORMATION
Interest paid.............................. $ 244 $ 145 $ 148 $ 76 $ 136
Income taxes paid.......................... $ 270 $ 2,032 $ 2,801 $ 1,870 $ 3,098
|
The accompanying notes are an integral part of these consolidated financial statements.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted)
1. INCORPORATION AND NATURE OF ACTIVITIES
The company, incorporated in 1985 under the Canada Business Corporations Act, designs, manufactures and markets a full line of fiber-optic test, measurement and monitoring equipment and instruments for the telecommunications industry. The company derives substantially all of its revenue from customers located in the United States, Canada, Europe and Asia. Marketing activities outside Canada are carried out by subsidiaries located in the United States and Europe and independent representatives worldwide. The company's customers consist primarily of telecommunications carriers, cable television companies, public utilities, private network operators, third-party installers, equipment rental companies, as well as optical component, value-added optical module, and optical networking system manufacturers.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada. These principles conform, in all material respects, with accounting principles generally accepted in the United States, except as described in note 21. The principal accounting policies of the company, which have been consistently applied, are summarized as follows:
INTERIM FINANCIAL INFORMATION
The financial information as at February 29, 2000 and for the six months ended February 28, 1999 and February 29, 2000 is unaudited. In the opinion of management, all adjustments necessary to present fairly the results of these periods have been included. The adjustments made were of a normal recurring nature. The results of operations for the six months ended February 29, 2000 are not necessarily indicative of the operating results anticipated for the full year.
ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts receivable, tax credits receivable, provisions for obsolete inventories, the useful lives of capital assets and goodwill and certain accrued liabilities. Actual results could differ from those estimates.
CONSOLIDATION
These consolidated financial statements include the accounts of the company and its wholly owned subsidiaries.
FOREIGN CURRENCY TRANSLATION
FOREIGN SUBSIDIARIES
The company's wholly owned subsidiaries are considered to be integrated. As a result, the subsidiaries' accounts are remeasured into the functional currency using the temporal method. Under this method, monetary assets and liabilities are remeasured at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical rates. Revenue and expenses are remeasured at the average rate for the period. Gains and losses resulting from remeasurement are reflected in the statement of earnings.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are measured into the functional currency using the temporal method.
FORWARD EXCHANGE CONTRACTS
The company enters into forward exchange contracts in order to hedge against potential exchange rate fluctuations on cash flows related to anticipated future revenue streams denominated in foreign currencies. Unrealized gains and losses on these forward exchange contracts are deferred and recognized upon settlement of the related transactions. Accordingly, cash flows resulting from forward exchange contract settlements are classified as cash flows from operating activities along with the corresponding cash flows being hedged.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and balances with banks and all highly liquid short-term investments with original maturities of three months or less.
SHORT-TERM INVESTMENTS
Short-term investments are valued at the lower of cost and market value.
INVENTORIES
Inventories are valued at the lower of cost and net realizable value. The cost of raw materials and work in progress inventories is determined using the first-in, first-out method. The cost of finished goods is determined using the average cost method.
CAPITAL ASSETS AND AMORTIZATION
Capital assets are recorded at cost less related government grants and research and development tax credits. Amortization is provided on a straight-line basis over the estimated useful lives of the capital assets as follows:
TERM
----
Equipment 3 to 5 years
Leasehold improvements Remaining lease term including lease renewal option
|
The carrying value of capital assets is evaluated whenever significant events occur which may indicate an impairment in value, based upon a comparison of the carrying value to the net recoverable amount.
GOODWILL, OTHER ASSETS AND AMORTIZATION
Goodwill, which represents the excess of the purchase price of an acquired business over the net identifiable assets acquired, is amortized on a straight-line basis over the estimated useful life of five years. The company assesses the carrying value of goodwill for future recoverability on an annual basis by estimating the associated net undiscounted future cash flows. The amount of impairment loss, if any, is the excess of the carrying value over the estimated net undiscounted cash flows. Goodwill is written down for any permanent impairment in value of the unamortized portion.
Other assets include the cost of acquired patents, net of accumulated amortization. Patents are amortized on a straight-line basis over the estimated useful lives of four years.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) GOVERNMENT GRANTS
Government grants are accrued as a receivable when there is reasonable assurance that the company has complied and will continue to comply with all the conditions related to the grant. Grants related to operating expenses are included in earnings when the related expenses are incurred. Grants related to capital expenditures are deducted from the related asset. Grants related to job creation programs for extended periods are deferred and amortized on a straight-line basis over five years, the minimum period for which the created job must be maintained.
REVENUE RECOGNITION
For products where the software is incidental, the company recognizes revenue when the products are delivered, with provisions made for warranties and support obligations.
For products where software is not incidental, the revenues are separated into two components, product and customer support revenues based upon vendor-specific objective evidence of fair value. The product revenues for these sales are recognized when the products are delivered with provisions made for estimated returns and warranties. The customer support revenues are deferred and recognized ratably over the period of the support arrangement, except where provided within one year of delivery, costs of providing this support is insignificant and accrued at the time of delivery and no upgrades of software are provided. Prior to September 1, 1998, the revenues for support were included in sales upon delivery with a provision for any costs associated with future support obligations where the support was provided for one year or less, the estimated cost of providing the support was insignificant and where enhancements offered have been and are expected to be minimal. The effect of this accounting change for the years ended August 31, 1997 and 1998 was not determinable by the company. For the year ended August 31, 1999, the company deferred revenues amounting to $327,000 which had an effect on net earnings of $226,000. The change resulted in a reduction in net earnings per share for the year ended August 31, 1999 of $0.01.
ADVERTISING COSTS
Advertising costs are expensed as incurred.
INCOME TAXES
The company provides for income taxes using the liability method of tax allocation. Under this method, future income tax assets and liabilities are determined based on deductible or taxable temporary differences between financial statement values and tax values of assets and liabilities using enacted income tax rates expected to be in effect for the year in which the differences are expected to reverse.
The company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that some or all of the future income tax assets will not be realized.
TAX CREDITS
The company is entitled to scientific research and experimental development
("SRED") tax credits granted by the Canadian federal government ("Federal")
and the government of the Province of Quebec ("Provincial"). Federal SRED
tax credits are earned on qualified Canadian SRED expenditures at a rate of
20% and can only be used to offset Federal income taxes otherwise payable.
Provincial SRED tax credits, which are refundable, are earned on qualified
SRED salaries in the Province of Quebec at a rate of 20%. Additional
refundable provincial SRED tax credits are earned at a rate of up to 20%.
These additional tax credits are reduced to nil, on a pro-rata basis, as
total assets of the company increase from Cdn$25 million to Cdn$50 million.
SRED tax credits are accounted for as a reduction of the related expenditures. The refundable portion of SRED tax credits is recorded in the year in which the related expenditures are incurred. The non-refundable portion of SRED tax credits is recorded in the year in which the related expenditures are incurred, provided the company has reasonable assurance the credits will be realized.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) RESEARCH AND DEVELOPMENT EXPENSES
All expenses related to development activities, which do not meet generally accepted criteria for deferral, and research are expensed as incurred. Development expenses which meet generally accepted criteria for deferral are capitalized and amortized against earnings over the estimated period of benefit.
As at February 29, 2000, the company had not deferred any development costs.
STOCK-BASED COMPENSATION PLAN
The company maintains a stock-based compensation plan, which is described in note 13. Under accounting principles generally accepted in Canada, no compensation cost is recognized for this plan when shares are issued to plan participants. Any consideration received from plan participants is credited to share capital.
EARNINGS AND DIVIDENDS PER SHARE
Basic earnings and dividends per share are determined using the weighted average number of common shares outstanding during the period, as adjusted for the effects of stock splits and other reorganizations of share capital in prior periods.
Fully diluted earnings per share is determined using the weighted average number of shares and dilutive share equivalents outstanding during the period. Earnings for the period are increased by the estimated additional earnings, net of applicable income taxes, on the proceeds, if any, from the exercise of dilutive common share equivalents.
ACCOUNTING CHANGES
During 1999, the company retroactively adopted the recently revised recommendations of the Canadian Institute of Chartered Accountants (CICA) regarding accounting for income taxes. Under these revised recommendations, income taxes are now accounted for using the liability method. These new recommendations are consistent with those of SFAS 109 under accounting principles generally accepted in the United States. The adoption of these revised recommendations did not result in any changes to prior years' earnings, shareholders' equity or cash flows. However, certain additional disclosures have been provided.
The company also retroactively applied the new recommendations of the CICA regarding statements of cash flows. The application of this new basis of presentation did not have any effect on prior years' earnings or shareholders' equity. However, certain comparative figures have been reclassified in order to conform with the new basis of presentation.
3. CHANGE IN REPORTING CURRENCY
The consolidated financial statements of the company were presented in Canadian dollars up to August 31, 1999. Effective September 1, 1999, the U.S. dollar has been adopted as the reporting currency. The functional currency continues to be the Canadian dollar. The financial statements for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 are presented in U.S. dollars in accordance with a translation of convenience method using the representative exchange rate as at August 31, 1999 of US$1.00 = Cdn$1.4958. The translated amount for monetary and non-monetary items as at August 31, 1999 becomes the historical basis for those items in subsequent periods.
The financial statements as at February 29, 2000 and for the six months then ended have been translated using the current rate method. Under this method, the financial statements are translated into the reporting currency as follows: assets and liabilities are translated at the exchange rate in effect at the date of the balance sheet and revenue and expenses are translated at the average exchange rate for the period. All gains and losses from the translation of the financial statements into the reporting currency are included in the cumulative translation adjustment in shareholders' equity. Changes in the cumulative translation adjustment during each period result solely from the application of this translation method.
It is management's intention to declare dividends, if any, in Canadian dollars.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
4. BUSINESS COMBINATIONS
NORTECH ACQUISITION
On February 4, 2000, the company acquired a 100% interest in Nortech Fibronic Inc. ("Nortech"), a company specializing in fiber-optic testing and temperature sensing, in exchange for total consideration valued at Cdn$4,051,000 (US$2,799,000). The consideration paid consisted of Cdn$3,051,000 (US$2,108,000) in cash, the issuance of 800,000 Class G shares which are mandatorily redeemable, for cash or Class A shares at the option of the company, on November 30, 2000 for an amount of Cdn$800,000 (US$553,000) (note 11), and a non-interest-bearing debenture in the amount of Cdn$200,000 (US$138,000) due November 30, 2000.
This acquisition, which has been accounted for using the purchase method, resulted in goodwill amounting to Cdn$3,677,000 (US$2,542,000) based on the following allocation of the purchase price to the identifiable assets acquired and liabilities assumed.
(UNAUDITED)
-----------
Current assets.............................................. $1,842
Capital assets.............................................. 409
Future income taxes......................................... 237
------
2,488
------
Current liabilities......................................... 1,933
Long-term debt.............................................. 298
------
2,231
------
Net identifiable assets acquired............................ 257
Goodwill.................................................... 2,542
------
Purchase price.............................................. 2,799
Less: Class G shares issued................................. 553
Less: Non-interest-bearing debenture........................ 138
Less: Cash and cash equivalents acquired.................... --
------
Cash paid net of cash and cash equivalents acquired......... $2,108
======
|
The net earnings of Nortech have been included in the consolidated statement of earnings of the company from the date of acquisition, February 4, 2000.
PRO FORMA INFORMATION
The following unaudited pro forma information regarding the acquisition of Nortech has been prepared by the company's management based upon the audited consolidated financial statements of the company for the year ended August 31, 1999, the unaudited consolidated financial statements of the company for the six months ended February 29, 2000 and the unaudited consolidated financial statements of Nortech.
This pro forma information includes adjustments related to the amortization of goodwill as well as the income tax effects of the acquisition. Consequently, such information is not necessarily indicative of the actual results which would have been achieved, nor is it necessarily indicative of future consolidated results of the company.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
4. BUSINESS COMBINATIONS -- (CONTINUED)
The following unaudited pro forma information for the year ended August 31, 1999 has been prepared as if the acquisition had occurred on September 1, 1998. The unaudited pro forma information for the six months ended February 29, 2000 has been prepared as if the acquisition had occurred on September 1, 1999:
YEAR SIX MONTHS
ENDED ENDED
AUGUST 31, FEBRUARY 29,
1999 2000
----------- ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3)
Sales....................................................... $44,948 $30,495
Earnings before amortization of goodwill.................... 6,091 3,712
Net earnings................................................ $ 5,602 $ 3,504
Basic and fully diluted earnings per share
Earnings before amortization of goodwill.................. $ 0.15 $ 0.10
Net earnings.............................................. $ 0.14 $ 0.09
|
REORGANIZATION
On September 1, 1998, the company acquired, from its parent company, all the issued and outstanding shares of GEXFO Distribution Internationale Inc. in exchange for 1 Class C share of the company, which was redeemed at a price of Cdn$509,000 (US$340,000). This holding company has two wholly owned subsidiaries, EXFO America Inc. and EXFO Europe S.A.R.L., which market fiber-optic test and measurement and monitoring equipment and instruments for the American and European markets.
Since the exchange was between entities under common control, the exchange has been accounted for in a manner similar to a pooling of interests. The assets, liabilities and shareholders' equity of the company and the other companies have been combined using their respective carrying amounts and financial statements of prior periods have been restated as if the companies had always been combined. The statements of earnings and cash flows for 1997 and 1998 reflect the results of operations and cash flows on a combined basis. The creation, issuance and redemption of the Class C share on September 1, 1998 has been presented as a mandatorily redeemable preferred share and a dividend distribution from the combined retained earnings.
The combined companies' net assets as at August 31, 1998 are as follows:
EXFO GEXFO
ELECTRO-OPTICAL DISTRIBUTION
ENGINEERING INC. INTERNATIONALE INC. ELIMINATIONS TOTAL
---------------- ------------------- ------------ --------
(NOTE 3)
Total assets.................... $17,384 $ 639 $(380) $17,643
Total liabilities............... (5,679) (299) 380 (5,598)
------- ----- ----- -------
Net assets...................... $11,705 $ 340 $ -- $12,045
======= ===== ===== =======
|
Consolidated sales and net earnings for GEXFO Distribution Internationale Inc. during the years ended August 31, 1997 and 1998 were insignificant.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
4. BUSINESS COMBINATIONS -- (CONTINUED)
SUBSEQUENT EVENT
The company intends to acquire the 85% interest in GAP Optique S.A. held by its parent company for a cash consideration of approximately $16,000. The carrying value of the net assets of GAP Optique S.A. was $19,000 as at December 31, 1999. GAP Optique S.A. did not have any material operations in 1997, 1998, 1999 or 2000. Since the exchange will occur between entities under common control, the exchange will be accounted for in a manner similar to a pooling of interests.
5. ACCOUNTS RECEIVABLE
AS AT AUGUST 31,
------------------ AS AT FEBRUARY 29,
1998 1999 2000
-------- ------ ------------------
(NOTE 3) (UNAUDITED)
Trade, net of an allowance for doubtful accounts of
$26,000, $30,000 and $61,000 as at August 31,
1998 and 1999 and February 29, 2000,
respectively..................................... $5,637 $8,869 $13,815
Grants receivable.................................. 104 479 614
Related parties
Non-interest bearing advances to parent
company....................................... -- -- 822
Companies under common control................... 98 27 17
Other.............................................. 181 520 666
------ ------ -------
$6,020 $9,895 $15,934
====== ====== =======
|
6. INVENTORIES
AS AT AUGUST 31, AS AT FEBRUARY 29,
---------------- ------------------
1998 1999 2000
------ ------ ------------------
(NOTE (UNAUDITED)
3)
Raw materials...................................... $3,133 $4,005 $ 7,095
Work in progress................................... 935 1,177 1,809
Finished goods..................................... 2,264 2,409 2,974
------ ------ -------
$6,332 $7,591 $11,878
====== ====== =======
|
7. CAPITAL ASSETS
AS AT AUGUST 31, 1998
(NOTE 3)
--------------------------------
ACCUMULATED
COST AMORTIZATION NET
------ ------------ ------
Equipment............................................... $3,376 $1,764 $1,612
Leasehold improvements.................................. 1,038 335 703
------ ------ ------
$4,414 $2,099 $2,315
====== ====== ======
|
AS AT AUGUST 31, 1999
--------------------------------
ACCUMULATED
COST AMORTIZATION NET
------ ------------ ------
Equipment............................................... $4,426 $2,469 $1,957
Leasehold improvements.................................. 1,146 464 682
------ ------ ------
$5,572 $2,933 $2,639
====== ====== ======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
7. CAPITAL ASSETS -- (CONTINUED)
AS AT FEBRUARY 29, 2000
(UNAUDITED)
--------------------------------
ACCUMULATED
COST AMORTIZATION NET
------ ------------ ------
Equipment............................................... $6,839 $3,501 $3,338
Leasehold improvements.................................. 1,453 630 823
------ ------ ------
$8,292 $4,131 $4,161
====== ====== ======
|
8. GOODWILL AND OTHER ASSETS
AS AT
AS AT AUGUST 31, FEBRUARY 29,
------------------ ------------
1998 1999 2000
-------- ------ ------------
(NOTE 3) (UNAUDITED)
Goodwill -- net of accumulated amortization of $42,000... $ -- $ -- $2,511
Patents -- net of accumulated amortization of $69,000,
$111,000 and $137,000 as at August 31, 1998 and 1999
and February 29, 2000, respectively.................... 106 65 51
------ ------ ------
$ 106 $ 65 $2,562
====== ====== ======
|
9. CREDIT FACILITIES
The company, and one of its subsidiaries, has available credit facilities which provide for advances of up to Cdn$11,500,000 (US$7,984,000) under lines of credit and Cdn$3,000,000 (US$2,083,000) as an operating loan. These facilities, which are renewable annually, bear interest at margins over prime rate ranging between nil and 1.25%. Accounts receivable, inventories and all tangible and intangible assets have been pledged as security against these facilities. Amounts of Cdn$203,000 (US$136,000), nil and Cdn$7,707,000 (US$5,351,000) were drawn against the facilities as at August 31, 1998 and 1999 and as at February 29, 2000. As at February 29, 2000, Cdn$298,000 (US$207,000) of the advances were secured by certain tax credits receivable.
10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
AS AT
AS AT AUGUST 31, FEBRUARY 29,
------------------ ------------
1998 1999 2000
-------- ------ ------------
(NOTE 3) (UNAUDITED)
Trade.................................................... $1,467 $1,884 $4,779
Salaries and social benefits............................. 653 1,112 2,111
Outstanding cheques...................................... 1,143 1,942 696
Company under common control............................. -- -- 131
Other.................................................... 295 585 935
------ ------ ------
$3,558 $5,523 $8,652
====== ====== ======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
11. MANDATORILY REDEEMABLE PREFERRED SHARES
Authorized -- unlimited as to number, without par value
Class B shares, non-voting, participating, redeemable at the option of the holder at their paid-in value, ranking in priority to Class A, E and F shares (note 13)
Class C shares, non-voting, non-participating, bearing a non-cumulative annual dividend at a rate to be determined by the Board of Directors but not less than 10% of their paid-in value, redeemable at the option of the holder or company at their paid-in value plus any unpaid dividends, ranking in priority to Class A, B and F shares (note 13)
Class E shares, non-voting, non-participating, bearing a non-cumulative dividend at a rate of 0.5% per month of their paid-in value, redeemable at the option of the holder or the company at their paid-in value plus a premium and any unpaid dividends, ranking in priority to Class A, C, D and F shares (note 13)
Class G shares, non-voting, non-participating, mandatorily redeemable on November 30, 2000 at their paid-in value, ranking in priority to Class B, C, D and E shares (note 13). The company may elect to settle the redemption value, provided the company has effected an initial public offering of its Class A shares by issuing the number of Class A shares obtained by dividing the paid-in value of the Class G shares, being Cdn$800,000, by the average trading price of the Class A shares for a period of ten trading days preceding November 30, 2000, ranking after Class A and F shares
The following table summarizes the preferred share activity since August 31, 1997:
CLASS C SHARE CLASS E SHARES CLASS G SHARES
--------------- -------------------- ---------------- TOTAL
NUMBER AMOUNT NUMBER AMOUNT NUMBER AMOUNT AMOUNT
------ ------ ----------- ------ ------- ------ ------
Balance as at August 31, 1997
and 1998.................... -- $ -- 19,000,000 $ -- -- $ -- $ --
Business combination (note
4).......................... 1 340 -- -- -- -- 340
Redemption of Class C share... (1) (340) -- -- -- -- (340)
Conversion of Class E shares
into Class A shares (note
13)......................... -- -- (19,000,000) -- -- -- --
-- ----- ----------- ---- ------- ---- -----
Balance as at August 31,
1999........................ -- -- -- -- -- -- --
Business combination (note 4)
(unaudited)................. -- -- -- -- 800,000 555 555
-- ----- ----------- ---- ------- ---- -----
Balance as at February 29,
2000 (unaudited)............ -- $ -- -- $ -- 800,000 $555 $ 555
== ===== =========== ==== ======= ==== =====
|
During the six months ended February 29, 2000, the company filed articles of amendment pursuant to which the Class G shares were created.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
12. LONG-TERM DEBT
AS AT
FEBRUARY
AS AT AUGUST 31, 29,
-------------------- -----------
1998 1999 2000
-------- -------- -----------
(NOTE 3) (UNAUDITED)
Term loans secured by a moveable hypothec on certain
assets of a wholly owned subsidiary, bearing
interest at margins over prime rate ranging between
0.75% and 2.25%, repayable through June 2003....... $ -- $ -- $ 445
Unsecured non-interest-bearing debenture due
November 30, 2000............................... -- -- 139
Unsecured non-interest-bearing loan repayable
through July 2002............................... -- -- 49
Non-interest-bearing loan, repaid in 1999.......... 20 -- --
-------- -------- --------
20 -- 633
Less: Current portion.............................. 20 -- 350
-------- -------- --------
$ -- $ -- $ 283
======== ======== ========
|
As at February 29, 2000, minimum principal repayments required in each of the next four years are as follows:
(UNAUDITED)
-----------
2001.................................................... $ 350
2002.................................................... 175
2003.................................................... 103
2004.................................................... 5
|
13. SHARE CAPITAL
Authorized -- unlimited as to number, without par value
Class A shares
Class D shares, non-voting, non-participating, bearing a cumulative annual dividend calculated on their paid-in value using the Bank of Canada base rate in effect at the beginning of the company's fiscal year, redeemable at the option of the company at their paid-in value plus any unpaid dividends, ranking in priority to Class A, B, C and F shares (note 11)
Class F shares, non-voting, participating, automatically converted into Class A shares on a one-for-one basis upon an initial public offering of the company's Class A shares, ranking pari passu with Class A shares
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
13. SHARE CAPITAL (CONTINUED) The following table summarizes the share capital activity since August 31, 1997:
CLASS A SHARES CLASS F SHARES
------------------- ---------------- TOTAL
NUMBER AMOUNT NUMBER AMOUNT AMOUNT
---------- ------ ------- ------ ------
Balance as at August 31, 1997 and 1998... 19,000,000 $1 -- $ -- $ 1
Conversion of Class E shares into Class A
shares (note 11)....................... 19,000,000 -- -- -- --
Issued for cash under stock purchase
plan................................... -- -- 197,588 86 86
---------- -- ------- ---- ----
Balance as at August 31, 1999............ 38,000,000 1 197,588 86 87
Issued for cash under stock purchase plan
(unaudited)............................ -- -- 26,480 17 17
---------- -- ------- ---- ----
Balance as at February 29, 2000
(unaudited)............................ 38,000,000 $1 224,068 $103 $104
========== == ======= ==== ====
|
On September 2, 1998, the company filed articles of amendment pursuant to which the Class A shares were split on a 190,000-to-one basis. Pursuant to articles of amendment dated September 3, 1998, the 100 issued and outstanding Class E shares (note 11) were converted into Class A shares on a 190,000-to-one basis. All references to numbers of shares and per share amounts have been restated in order to reflect the share split and conversion noted above.
In accordance with a stock purchase plan established by the company, officers, directors and key employees may purchase Class F shares up to a maximum of 5% of all participating, issued and outstanding shares of the company. The maximum number of shares held by one person cannot exceed 1% of all issued and outstanding shares of the company. The purchase price of shares under the plan is determined as a multiple of the company's equity as at the end of the preceding fiscal year. Shares issued under the plan are restricted as to sale and transferability for a period of at least five years. As at February 29, 2000, employees have subscribed for, and the company is committed to issue, an aggregate of 504,650 Class F shares in exchange for a weighted average cash consideration of Cdn$1.12 (US$0.78) per share. The subscription price for these shares has not yet been paid. Included in share capital is Cdn$564,000 (US$392,000) for shares to be issued under the subscriptions, net of the subscriptions receivable of Cdn$564,000 (US$392,000). As at February 29, 2000, the company has guaranteed the repayment of third party loans totalling Cdn$56,000 (US$39,000) obtained by certain employees with respect to the purchase of Class F shares.
14. COMMITMENTS
OPERATING LEASES
The company has entered into operating leases for its premises, which expire at various dates through to 2003. As at February 29, 2000, the minimum rentals payable during each of the next three years are as follows:
(UNAUDITED)
-----------
2001.................................................... $493
2002.................................................... 265
2003.................................................... 146
----
$904
====
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
14. COMMITMENTS (CONTINUED) During the years ended August 31, 1997, 1998 and 1999, and the six months ended February 28, 1999 and February 29, 2000, rental expense amounted to $274,000, $283,000, $344,000, $164,000, and $274,000, respectively.
OTHER
As at February 29, 2000, the company is committed to purchase a building for a gross amount of Cdn$4,900,000 (US$3,402,000) in cash. This purchase is expected to close in June 2000.
15. OTHER DISCLOSURES
LOAN FROM A COMPANY UNDER COMMON CONTROL
The loan from a company under common control bears interest at prime rate plus 1%, is unsecured, and is repayable on demand.
During the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000, the effective interest rate on this loan was 4.7%, 4.2%, 4.6%, 4.6% and 4.8%, respectively.
NET RESEARCH AND DEVELOPMENT EXPENSES
Net research and development expenses comprise the following:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
Gross research and development
expenses..................... $ 2,753 $ 4,406 $ 6,390 $ 2,816 $ 4,696
Research and development tax
credits...................... (737) (1,332) (1,935) (1,017) (1,216)
Government grants.............. (424) (60) (140) (8) (259)
------- ------- ------- ------- -------
$ 1,592 $ 3,014 $ 4,315 $ 1,791 $ 3,221
======= ======= ======= ======= =======
|
OTHER GRANTS
During 1998, the company entered into an agreement with the Quebec Minister of Industry, Commerce, Science and Technology (the "Minister"). Pursuant to this agreement, the Minister agreed to contribute, in the form of grants, up to a maximum of Cdn$600,000 (US$417,000) towards interest costs incurred over the period from January 1, 1998 through December 31, 2002. In addition, the Minister agreed to provide grants up to a maximum of Cdn$2,220,000 (US$1,541,000) over the period from January 1, 1998 through December 31, 2002, payable based on the number of full-time jobs created during the period.
The above grants are subject to the condition that the company maintain its Canadian principal place of business within the Province of Quebec until at least December 31, 2002 and that jobs created pursuant to the agreement be maintained for a period of at least five years from the date of creation. Should these conditions not be met by the company, the Minister may enforce various recourse options, which include suspension or cancellation of the agreement or requiring the repayment of amounts received by the company. As of February 29, 2000, the company has recognized a total of Cdn$1,576,000
(US$1,094,000)
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
15. OTHER DISCLOSURES -- (CONTINUED) under this program, of which Cdn$696,000 (US$483,000) has been credited to earnings with the balance of Cdn$880,000 (US$611,000) having been included in deferred grants. Should any repayments of amounts received pursuant to this agreement be required, such repayments will be charged to earnings as the amounts of any repayments become known.
Following is a summary of the classification of these and certain other grants in the statements of earnings.
Interest expense (income) for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 is net of related government grants of nil, $66,000, $126,000, $57,000 and $76,000, respectively.
Cost of sales for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 is net of government grants of nil, $11,000, $33,000, $13,000 and $326,000, respectively.
Selling and administrative expenses for the years ended August 31, 1997, 1998 and 1999 and six months ended February 28, 1999 and February 29, 2000 are net of government grants of nil, $22,000, $21,000, $9,000 and $80,000, respectively.
DEFINED CONTRIBUTION EMPLOYEE BENEFITS PLANS
The company maintains two separate defined contribution employee benefits plans for certain eligible employees. These plans, which are accounted for on an accrual basis, are summarized as follows:
- Deferred profit sharing plan
This plan, maintained for eligible Canadian resident employees, requires the company to contribute an amount equal to 1% of an employee's gross salary, provided that the employee has contributed at least 2% of gross salary to a tax-deferred registered retirement savings plan. In addition, at the end of each fiscal year, the company may contribute an additional amount of up to 4% of an employee's gross salary to the employee's tax-deferred registered retirement savings plan. Contributions to this plan during the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 amounted to nil, nil, Cdn$156,000 (US$104,000), Cdn$84,000 (US$56,000) and Cdn$126,000 (US$86,000), respectively.
- 401K plan
The company maintains a 401K plan for eligible U.S. resident employees. Under the plan, the company may elect to contribute an amount of up to 50% of the first 6% of an employee's current compensation, subject to certain legislated maximum contribution limits. During the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000, the company made contributions totalling nil, US$8,000, US$21,000, US$8,000 and US$5,000, respectively.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
16. RELATED PARTY TRANSACTIONS
In the normal course of operations, the company entered into transactions with certain companies under common control. These transactions have been measured at the exchange amount which is the amount of consideration agreed upon by the related parties. These transactions have been reflected in the financial statements as follows:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
Rent.............................. $215 $219 $232 $116 $119
Interest expense.................. 94 84 92 46 48
Other expenses.................... 341 130 107 107 30
|
17. INCOME TAXES
The reconciliation of the income tax provision calculated using the Canadian federal and provincial statutory income tax rates to the provision for income taxes per the financial statements is as follows:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(NOTE 3) (NOTE 3) (NOTE 3) (UNAUDITED) (UNAUDITED)
(NOTE 3)
Income taxes at combined Canadian
federal and provincial
statutory tax rate (38%)....... $1,768 $2,606 $3,156 $1,208 $2,128
Increase (decrease) due to:
Manufacturing and processing
deduction...................... (263) (387) (519) (189) (318)
Non-deductible expenses........ 19 43 40 20 24
Other.......................... 58 94 (185) (81) 53
------ ------ ------ ------ ------
$1,582 $2,356 $2,492 $ 958 $1,887
====== ====== ====== ====== ======
Income taxes consist of:
Current........................ $1,576 $2,067 $2,534 $1,023 $1,863
Future......................... 6 289 (42) (65) 24
------ ------ ------ ------ ------
$1,582 $2,356 $2,492 $ 958 $1,887
====== ====== ====== ====== ======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
17. INCOME TAXES -- (CONTINUED) Future income tax liabilities are detailed as follows:
AS AT AUGUST 31, AS AT FEBRUARY 29,
---------------- ------------------
1998 1999 2000
-------- ---- ------------------
(NOTE 3) (UNAUDITED)
Current future income tax liabilities
Research and development tax credits............... $259 $330 $ 409
Reserves and accruals.............................. -- -- (169)
Deferred revenue................................... -- (68) (106)
---- ---- -----
259 262 134
---- ---- -----
Long-term future income tax liabilities
Capital assets..................................... 146 183 253
Government grants.................................. -- (18) (64)
Deferred revenue................................... -- (33) (18)
Other.............................................. 27 (4) (75)
---- ---- -----
173 128 96
==== ==== =====
Total future income tax liabilities.................. $432 $390 $ 230
==== ==== =====
|
18. SEGMENT INFORMATION
Management has organized the company under one operating segment, that being the development, manufacture and marketing of fiber-optic test, measurement and monitoring equipment and instruments. Substantially all of the company's long-lived assets are located in Canada.
Sales by geographic region are detailed as follows:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
-------- -------- -------- ------------ ------------
(UNAUDITED) (UNAUDITED)
(NOTE 3) (NOTE 3) (NOTE 3) (NOTE 3)
United States................. $11,039 $13,644 $20,755 $ 7,556 $14,831
Canada........................ 1,652 2,353 2,973 1,429 3,885
Europe........................ 4,593 6,717 8,721 4,694 5,102
Asia.......................... 2,977 3,229 3,199 1,146 2,179
Other......................... 4,214 5,662 6,518 3,903 3,114
------- ------- ------- ------- -------
$24,475 $31,605 $42,166 $18,728 $29,111
======= ======= ======= ======= =======
|
Sales have been allocated to geographic regions based on the country of residence of the related customers.
During all periods presented above, there were no customers from which 10% or more of total sales were derived.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
19. FINANCIAL INSTRUMENTS
SHORT TERM INVESTMENTS
Short-term investments consist of the following:
AS AT AUGUST 31, AS AT FEBRUARY 29,
---------------- ------------------
1998 1999 2000
------ ------ ------------------
(NOTE 3) (UNAUDITED)
Corporate bonds denominated in Canadian dollars
bearing interest at annual rates of 4.9% to 5%;
maturing on January 22, 1999 and October 10, 2000
(August 31, 1999 -- October 10, 2000)............ $1,338 $1,371 $ --
====== ====== ======
|
FAIR VALUE
Cash and cash equivalents, accounts receivable, bank advances, accounts payable and accrued liabilities, dividend payable, mandatorily redeemable preferred shares, loan from a company under common control and long-term debt are financial instruments whose fair values approximate their carrying values.
The fair value of short-term investments, determined based on market value, amounted to $1,343,000 and $1,430,000 as at August 31, 1998 and August 31, 1999, respectively.
CREDIT RISK
Financial instruments which potentially subject the company to credit risk consist principally of cash and cash equivalents, short-term investments, accounts receivable and forward exchange contracts. The company's short-term investments consist of debt instruments issued by high-credit quality financial institutions and corporations and the company's cash and cash equivalents and forward exchange contracts are held with or issued by high-credit quality financial institutions; therefore the company considers the risk of non-performance on these instruments to be remote.
Due to the North American and European distribution of the company's customers, there is no particular concentration of credit risk. Generally, the company does not require collateral or other security from customers for trade accounts receivable, however, credit is extended to customers following an evaluation of creditworthiness. In addition, the company performs ongoing credit reviews of all its customers and establishes an allowance for doubtful accounts receivable when accounts are determined to be uncollectible.
INTEREST RATE RISK
As at February 29, 2000, the company's exposure to interest rate risk is summarized as follows:
Cash and cash equivalents................................... Non-interest bearing Accounts receivable......................................... Non-interest bearing Bank advances............................................... Prime rate plus nil to 1.25% Accounts payable and accrued liabilities.................... Non-interest bearing Mandatorily redeemable preferred shares..................... Non-interest bearing Loan from a company under common control.................... Prime rate plus 1% Long-term debt.............................................. As described in note 12 |
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
19. FINANCIAL INSTRUMENTS -- (CONTINUED) FORWARD EXCHANGE CONTRACTS
The company is exposed to currency risks as a result of its export sales, substantially all of which are denominated in U.S. dollars, of products manufactured in Canada. These risks are partially hedged by forward exchange contracts and certain operating expenses. As at August 31, 1998 and 1999 and February 29, 2000, the company held contracts to sell U.S. dollars at various forward rates, which are summarized as follows:
WEIGHTED
AVERAGE
CONTRACTUAL CONTRACTUAL
AMOUNTS FORWARD RATE
----------- ------------
As at August 31, 1998
September 1998 to August 1999............................. $4,800 1.4058
September 1999 to June 2000............................... 2,900 1.4531
As at August 31, 1999
September 1999 to August 2000............................. $5,800 1.4815
September 2000 to June 2001............................... 3,000 1.5014
As at February 29, 2000 (unaudited)
March 2000 to February 2001............................... $5,700 1.4989
March 2001 to November 2001............................... 1,900 1.4800
|
As at August 31, 1998 and 1999, these contracts resulted in deferred unrealized losses amounting to US$693,000 and US$35,000, respectively (as at February 29, 2000 -- deferred unrealized gain amounting to US$285,000).
20. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved.
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
As a registrant with the Securities and Exchange Commission in the United States, the company is required to reconcile its financial results for significant differences between generally accepted accounting principles as applied in Canada (Canadian GAAP) and those applied in the United States (U.S. GAAP).
Additional disclosures required under U.S. GAAP have been provided in the accompanying financial statements and notes. In addition, the following summarizes differences between Canadian and U.S. GAAP and other required disclosures under U.S. GAAP.
ACCOUNTING FOR STOCK-BASED COMPENSATION
Under U.S. GAAP, the company has elected to measure stock-based compensation costs using the intrinsic value method (APB 25). Under this method, compensation cost is measured as the difference between the
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) fair value of the purchased stock and the purchase price paid by plan participants. Compensation cost is amortized to expense over a period of five years, being the restriction period (note 13). Under Canadian GAAP, no compensation cost is recognized.
During the year ended August 31, 1999 and the six months ended February 29, 2000, the weighted average fair value per share under the stock purchase plan amounted to approximately $0.68 and $6.87, respectively. The fair value per share since inception of the plan ranged between $0.68 and $18.00. As at August 31, 1999 and February 29, 2000, the balance of deferred stock-based compensation amounted to $40,000 and $2,711,000, respectively (August 31, 1998 -- nil).
CHANGE IN REPORTING CURRENCY
As mentioned in note 3, on September 1, 1999, the company adopted the U.S. dollar as its reporting currency. Under U.S. GAAP, the financial statements, including prior years, are translated according to the current rate method. Under Canadian GAAP, at the time of change in reporting currency, the historical financial statements are presented using a translation of convenience.
Under Canadian GAAP, the statements of earnings for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 were translated into U.S. dollars using an exchange rate of US$1.00 = Cdn$1.4958. Under U.S. GAAP, revenue and expenses would be translated at exchange rates prevailing at the respective transaction dates. Average exchange rates for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 were US$1.00 = Cdn$1.3685, Cdn$1.4390, Cdn$1.5068 and Cdn$1.5274, respectively. The exchange rates as at August 31, 1998 and 1999 were US$1.00 = Cdn$1.5722 and Cdn$1.4958, respectively.
SHORT-TERM INVESTMENTS
Under U.S. GAAP, the short-term investments would be classified as "available for sale" securities. Consequently, these securities would be carried at fair value, with any unrealized holding gains or losses at each balance sheet date being reflected in other comprehensive income on a net of tax basis. Under Canadian GAAP, short-term investments are carried at the lower of cost and market value.
IMPAIRMENT OF LONG-LIVED ASSETS
In accordance with SFAS 121, Accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, the company reviews the carrying value of its long-lived assets, including goodwill associated with assets acquired in a purchase business combination, when events or changes in circumstances indicate that the carrying value may not be recoverable. If this review indicates that the carrying amounts of the assets and goodwill, where applicable, will not be recoverable, as determined based on estimated undiscounted cash flows, an impairment loss is recorded. Impairment losses, if any, are measured as the excess of the carrying values over the fair values of the related assets. In addition, goodwill is reviewed periodically as disclosed in note 2.
FORWARD EXCHANGE CONTRACTS
Under U.S. GAAP, in accordance with SFAS 52, certain of the forward exchange contracts held by the company, for which the underlying sales transactions are not firmly committed, would not qualify for hedge accounting. Consequently, unrealized gains or losses on these contracts at each balance sheet date would be reflected in earnings for the corresponding period. Under Canadian GAAP, all of the company's forward
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) exchange contracts qualify for hedge accounting, therefore, any unrealized gains or losses are deferred and recognized in the statement of earnings upon settlement of the related transactions.
EARNINGS PER SHARE
For purposes of earnings per share calculations, the Class A, E and F shares, collectively, are considered to constitute common shares.
Under U.S. GAAP, diluted net earnings per share is calculated based on the weighted average number of common shares outstanding during the period, plus the effects of potential common shares, such as options, and conversions of senior shares outstanding during the period. This method requires that diluted net earnings per share be calculated, using the treasury stock method, as if all potential common shares had been exercised at the later of the beginning of the period or the date of issue, as the case may be, and that the funds obtained thereby were used to purchase common shares of the company at the average fair value of the common shares during the period.
Under U.S. GAAP, the presentation of per share figures for earnings before amortization of goodwill is not permitted. In addition, under U.S. GAAP, amortization of goodwill would be included in the computation of earnings from operations.
FUTURE INCOME TAXES
As a result of adjustments from Canadian GAAP to U.S. GAAP, future income tax liabilities under U.S. GAAP include an adjustment of $(67,000) as at August 31, 1998, $23,000 as at August 31, 1999 and $51,000 as at February 29, 2000 related to short-term investments and forward exchange contracts carried at fair value.
NEW ACCOUNTING STANDARDS
In 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities". The standard, which must be applied prospectively, is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. Under SFAS No. 133, all of the company's forward exchange contracts would qualify for hedge accounting. Consequently, all of the company's forward exchange contracts would be carried on the balance sheet at fair value and any unrealized gains or losses at each balance sheet date would be included in other comprehensive income.
On December 3, 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition". SAB101, as amended by SAB+101A, is effective commencing in the first fiscal quarter of the first fiscal year beginning after December 15, 1999. The implementation of this SAB is not expected to have any material effect on the company's financial statements or revenue recognition policy in future periods.
RECONCILIATION OF NET EARNINGS TO CONFORM WITH U.S. GAAP
The following summary sets out the material adjustments to the company's reported net earnings and net earnings per share which would be made to conform with U.S. GAAP.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED)
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
------------------------ ---------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
------ ------ ------ ------------ ------------
(UNAUDITED) (UNAUDITED)
Net earnings for the period in accordance
with Canadian GAAP....................... $3,070 $4,501 $5,814 $2,220 $3,712
Stock-based compensation costs............. -- -- (10) -- (293)
Change in reporting currency............... 286 178 (44) (48) --
Unrealized gains (losses) on forward
exchange contracts....................... -- (208) 208 108 158
Future income taxes on forward exchange
contracts................................ -- 67 (67) (35) (51)
------ ------ ------ ------ ------
Net earnings for the period in accordance
with U.S. GAAP........................... 3,356 4,538 5,901 2,245 3,526
Other comprehensive income (loss) Foreign
currency translation adjustments......... (121) (1,350) 606 205 640
Unrealized holding gains (losses) on
short-term investments, net of related
income taxes of $23,000............... -- -- 36 -- (36)
------ ------ ------ ------ ------
Comprehensive income....................... $3,235 $3,188 $6,543 $2,450 $4,130
------ ------ ------ ------ ------
Basic and diluted net earnings per share in
accordance with U.S. GAAP................ $ 0.09 $ 0.12 $ 0.15 $ 0.05 $ 0.09
====== ====== ====== ====== ======
Pro-forma basic and diluted net earnings
per share in accordance with U.S. GAAP
(unaudited)(1)........................... $ 0.14 $ 0.09
====== ======
|
(1) The pro-forma basic and diluted net earnings per share in accordance with U.S. GAAP reflect management's intention to pay a dividend in the amount of $17.6 million. This pro-forma information also assumes the issuance of 573,000 shares for the year ended August 31, 1999 based on earnings available to shareholders for the year then ended and 496,000 shares for the six months ended February 29, 2000 based on the earnings available to shareholders for the twelve months ended February 29, 2000 at a price of $21 per share in order to provide funds for the dividend payment.
Earnings available to common shareholders is reconciled as follows:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
------ ------ ------ ------------ ------------
(UNAUDITED) (UNAUDITED)
Net earnings for the period...... $3,356 $4,538 $5,901 $2,245 $3,526
Dividend on Class C share........ -- -- (333) (333) --
------ ------ ------ ------ ------
Earnings available to common
shareholders................... $3,356 $4,538 $5,568 $1,912 $3,526
====== ====== ====== ====== ======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) The diluted weighted average number of common shares outstanding calculated according to U.S. GAAP is as follows:
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
-------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29,
1997 1998 1999 1999 2000
------ ------ ------ ------------ ------------
(UNAUDITED) (UNAUDITED)
Weighted average number of common
shares outstanding --
Basic (000's).................. 38,000.. 38,000 38,001 38,000 38,425
Conversion of Class G shares..... -- -- -- -- 4
------ ------ ------ ------ ------
Weighted average number of common
shares outstanding --
Diluted (000's)................ 38,000.. 38,000 38,001 38,000 38,429
====== ====== ====== ====== ======
|
The number of common shares issuable upon the assumed conversion of the Class G shares has been determined by dividing the paid-in value of the Class G shares by the estimated fair value of the Class A shares as at February 4, 2000 (the date the Class G shares were issued), or $18.00 per Class A share, weighted from the date of issuance of the Class G shares to the end of the period.
As a result of the above adjustments to net earnings, differences with respect to the shareholders' equity under U.S. GAAP are as follows:
SHARE CAPITAL
AS AT AS AT
AUGUST 31, FEBRUARY 29,
-------------- ------------------
1998 1999 2000
---- ---- ------------------
(UNAUDITED)
Share capital in accordance with Canadian GAAP........ $1 $87 $104
Stock-based compensation costs........................ -- 10 303
-- --- ----
Share capital in accordance with U.S. GAAP............ $1 $97 $407
== === ====
|
RETAINED EARNINGS
AS AT AS AT
AUGUST 31, FEBRUARY 29,
------------------ ------------------
1998 1999 2000
------- ------- ------------------
(UNAUDITED)
Retained earnings in accordance with Canadian
GAAP........................................... $12,044 $14,592 $18,304
Forward exchange contracts....................... (141) -- 107
Stock-based compensation costs................... -- (10) (303)
Change in reporting currency
Current period
Net earnings................................ 178 (44) --
Dividends................................... (4) 24 --
Cumulative effect of prior periods............. 862 1,036 1,016
------- ------- -------
Retained earnings in accordance with U.S. GAAP... $12,939 $15,598 $19,124
======= ======= =======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) ACCUMULATED OTHER COMPREHENSIVE LOSS
YEARS ENDED SIX MONTHS ENDED
AUGUST 31, FEBRUARY 29,
------------------ ------------------
1998 1999 2000
------- ------- ------------------
(UNAUDITED)
Foreign currency translation adjustments
Balance -- Beginning of period.................. $ (272) $(1,622) $(1,016)
Change during the period........................ (1,350) 606 640
------- ------- -------
Balance -- End of period........................ (1,622) (1,016) (376)
------- ------- -------
Unrealized holding gains (losses) on short-term
investments, net of income taxes
Balance -- Beginning of period.................. -- -- 36
Unrealized gains (losses) arising during the
period....................................... -- 36 --
Reclassification adjustment for amounts included
in net earnings.............................. -- -- (36)
------- ------- -------
Balance -- End of period........................ -- 36 --
------- ------- -------
Accumulated other comprehensive loss.............. $(1,622) $ (980) $ (376)
======= ======= =======
|
Following are statements of earnings for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 and February 29, 2000 and condensed balance sheets as at August 31, 1998 and 1999 and February 29, 2000 prepared under U.S. GAAP:
STATEMENTS OF EARNINGS
YEARS ENDED AUGUST 31, SIX MONTHS ENDED
--------------------------- -------------------------------------
1997 1998 1999 FEBRUARY 28, 1999 FEBRUARY 29, 2000
------- ------- ------- ----------------- -----------------
(UNAUDITED) (UNAUDITED)
Sales.......................... $26,752 $32,853 $41,858 $18,340 $29,111
Cost of sales.................. 10,550 11,793 14,889 6,876 9,609
------- ------- ------- ------- -------
Gross margin................... 16,202 21,060 26,969 11,464 18,502
Total operating expenses....... 10,819 14,105 18,367 8,008 14,105
------- ------- ------- ------- -------
Earnings from operations....... 5,583 6,955 8,602 3,456 5,397
======= ======= ======= ======= =======
Net earnings for the period.... $ 3,356 $ 4,538 $ 5,901 $ 2,245 $ 3,526
======= ======= ======= ======= =======
|
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) BALANCE SHEETS
AS AT AUGUST 31, AS AT FEBRUARY 29,
----------------------------------- ----------------------------
1998 1999 1999 2000 2000
------- ------- ------------- ----------- -------------
PRO-FORMA(1) PRO-FORMA(1)
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Current assets
Cash and cash
equivalents.......... $ 1,201 $ 423 $ 423 $ 539 $ 539
Accounts receivable..... 5,727 9,895 9,895 16,092 16,092
Inventories............. 6,024 7,591 7,591 11,878 11,878
Other current assets.... 1,529 2,286 2,286 1,998 1,998
------- ------- ------- ------- -------
14,481 20,195 20,195 30,507 30,507
Capital assets............ 2,203 2,639 2,639 4,161 4,161
Goodwill and other
assets.................. 101 65 65 2,562 2,562
------- ------- ------- ------- -------
$16,785 $22,899 $22,899 $37,230 $37,230
======= ======= ======= ======= =======
Current liabilities
Bank advances........... $ 129 $ -- $ -- $ 5,351 $ 5,351
Accounts payable and
accrued
liabilities.......... 3,593 5,523 5,523 8,652 8,652
Dividends payable....... -- -- 17,600 -- 17,600
Other current
liabilities.......... 1,580 1,891 1,891 2,819 2,819
------- ------- ------- ------- -------
5,302 7,414 25,014 16,822 34,422
Long-term liabilities..... 165 770 770 1,253 1,253
------- ------- ------- ------- -------
5,467 8,184 25,784 18,075 35,675
Shareholders' equity
(negative)
Share capital........... 1 97 97 407 407
Accumulated other
comprehensive loss... (1,622) (980) (980) (376) (376)
Retained earnings
(deficit)............ 12,939 15,598 (2,002) 19,124 1,524
------- ------- ------- ------- -------
11,318 14,715 (2,885) 19,155 1,555
------- ------- ------- ------- -------
$16,785 $22,899 $22,899 $37,230 $37,230
======= ======= ======= ======= =======
|
(1) The pro-forma balance sheets reflect management's intention to pay a dividend in the amount of $17.6 million.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in thousands of U.S. dollars, except share and per share data and as otherwise noted) -- (Continued)
21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED) STATEMENT OF CASH FLOWS
Under Canadian GAAP, the statements of cash flows, which have been prepared on a basis consistent with International Accounting Standards, for the years ended August 31, 1997, 1998 and 1999 and the six months ended February 28, 1999 were translated into U.S. dollars using an exchange rate of US$1.00 = Cdn$1.4958. Under U.S. GAAP, the historical exchange rates on the dates of the cash flow activities would be used. Following are summary statements of cash flows under U.S. GAAP:
SIX MONTHS ENDED
YEARS ENDED AUGUST 31, FEBRUARY 28,
--------------------------- ----------------
1997 1998 1999 1999
------- ------- ------- ----------------
(UNAUDITED)
Operating activities............................ $ 5,020 $ 3,278 $ 3,633 $ 455
Financing activities............................ (3,360) (273) (3,261) (283)
Investing activities............................ (1,801) (2,061) (1,206) (562)
------- ------- ------- ------
Change in cash and cash equivalents............. (141) 944 (834) (390)
Effect of foreign exchange rate changes on cash
and cash equivalents.......................... (5) (124) 56 46
Cash and cash equivalents --
Beginning of period........................... 527 381 1,201 1,201
------- ------- ------- ------
Cash and cash equivalents --
End of period................................. $ 381 $ 1,201 $ 423 $ 857
======= ======= ======= ======
|
For the six months ended February 29, 2000, there are no material differences between the statement of cash flows under Canadian GAAP as compared to U.S. GAAP.
Inside Back Cover
EXFO logo
Picture of pulses of light travelling along fiber optic cables
Picture of an agent from our customer support department
Picture of a modem connected to the Earth
CAPTION:
To meet the increasing demand for communications bandwith, carriers are installing networks based on optical fiber.
Through and including , 2000 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
6,000,000 SHARES
EXFO LOGO
EXFO ELECTRO-OPTICAL ENGINEERING INC.
SUBORDINATE VOTING SHARES
MERRILL LYNCH & CO.
RBC DOMINION SECURITIES
WIT SOUNDVIEW
CIBC WORLD MARKETS
, 2000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of EXFO Electro-Optical Engineering Inc. (the "Registrant") attributable to this offering of the securities, other than underwriting commissions, are as follows:
Securities and Exchange Commission Registration Fee......... US$ 40,076
NASD filing fee............................................. 14,300
Nasdaq National Market Fee.................................. 96,000
The Toronto Stock Exchange Fee.............................. 36,526
Blue Sky Fees and Expenses.................................. 25,000
Registrar and Transfer Agent Fees........................... 11,000
Printing and Engraving Expenses............................. 175,000
Legal Fees and Expenses..................................... 350,000
Accounting Fees and Expenses................................ 200,000
Miscellaneous............................................... 52,098
------------
Total.................................................. US$1,000,000
============
|
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's by-laws provide that the Registrant will indemnify any of its directors, former directors, officers and former officers and other parties specified by the by-laws, against all costs reasonably incurred by them for any civil, criminal or administrative action or proceeding to which they are or may made a party by reason of having been a director or officer. The indemnity covers amounts paid to settle actions or to satisfy judgments. However, the Registrant may only indemnify such these persons, if such person acted honestly and in good faith with a view to the Registrant's best interests and, in the case of a criminal or administrative action or proceeding, if such person has reasonable grounds for believing that his or her conduct was lawful. The Canada Business Corporations Act provides that court approval is required for the payment of any indemnity in connection with an action brought by or on the Registrant's behalf.
A policy of directors' and officers' liability insurance is maintained by the Registrant which insures directors and officers of the Registrant and its subsidiaries against liability incurred by, arising from or against them for certain of their acts, errors or omissions.
Reference is made to the Underwriting Agreement, the proposed form of which is filed as Exhibit 1.1, which contains provisions for the indemnification by the Underwriters of the Registrant and directors and officers of the Registrant who signed the Registration Statement against certain civil liabilities under the U.S. Securities Act of 1933.
Reference is made to Item 17 for the undertakings of the Registrant with respect to indemnification for liabilities arising under the U.S. Securities Act of 1933.
II-1
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following is a summary of transactions by the Registrant involving sales of the Registrant's securities that were not registered under the Securities Act during the last three years preceding the date of this registration statement:
(a) On April 23, 1997, the Registrant issued an aggregate of 100 Class "A" shares to five non-U.S. residents at a price of C$1.00 per share.
(b) On September 1, 1998, the Registrant issued one Class "C" share to one non-U.S. resident at a price of C$1,000.00. The share was redeemed on September 1, 1998 at a price of C$509,000.00.
(c) On September 1, 1998, the Registrant issued 100 Class "E" shares to one non-U.S. resident for an aggregate consideration of C$100.00.
(d) On September 2, 1998, the Registrant issued 19 million Class "A" shares upon the split of the outstanding 100 Class "A" shares on the basis of 190,000 Class "A" shares for each outstanding Class "A" share.
(e) On September 3, 1998, the Registrant issued 19 million Class "A"shares to one non-U.S. resident upon the conversion of 100 Class "E" shares on the basis of 190,000 Class "A" shares for each outstanding Class "E" share.
(f) On August 31, 1999, the Registrant issued 176,348 Class "F" shares to one U.S. resident and 21,240 Class "F" shares to two non-U.S. residents at a price of C$0.6579 per share.
(g) Between October 15, 1999 and November 23, 1999, the Registrant issued 9,925 Class "F" shares to one U.S. resident and 16,555 Class "F" shares to four non-U.S. residents at a price of C$1.00 per share.
(h) On February 7, 2000, the Registrant issued 800,000 Class "G" shares to three non-U.S. residents at a price C$1.00 per share in connection with the acquisition of Nortech Fibronic Inc.
(i) On May 15, 2000, the Registrant issued 485,537 Class "F" shares to 106 non-U.S. residents and 16 U.S. residents at a price of C$1.2818 per share.
The issuance to U.S. residents described in Item 15(f), 15(g) and 15(i)
were exempt from registration under the Securities Act in reliance on Rule 701
of the Securities Act in that they were offered or sold pursuant to a
compensatory benefit plan. In addition, the issuances were exempt from
registration under Section 4(2) of the Securities Act as transactions by an
issuer not involving a public offering. The issuances to non-U.S. residents
described in Item 15(a), (b), (c), (h) and (i) were exempt from registration
under the Securities Act in reliance on Regulation S under the Securities Act.
The issuances described in Item 15(d) and 15(e) may not be deemed a "sale", and
were otherwise exempt from registration under the Securities Act in reliance of
Section 3(a)(9) of the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
NUMBER EXHIBIT
------ -------
1.1* Form of Underwriting Agreement.
3.1 Amended Articles of Incorporation of the Registrant, as
currently in effect.
3.2 By-laws of the Registrant, as currently in effect.
3.3 Form of Amended and Restated Articles of Incorporation of
the Registrant, to be effective immediately prior to the
consummation of this offering.
4.1 Form of Subordinate Voting Share Certificate.
4.2 Form of Trust Agreement among the Registrant, Germain
Lamonde, GEXFO Investissements Technologiques inc., Fiducie
Germain Lamonde and G. Lamonde Investissements Financiers
inc.
|
II-2
NUMBER EXHIBIT
------ -------
5.1 Opinion of Fasken Martineau DuMoulin LLP regarding the
legality of the securities.
8.1 Opinion of Fasken Martineau DuMoulin LLP regarding Canadian
tax matters.
8.2 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding U.S. Federal Income Tax Matters.
10.1 Credit Agreement, dated July 6, 1995, among the Registrant,
National Bank of Canada and Banque Nationale de Paris
(Canada), as amended on December 22, 1999 and on March 28,
2000 (including summary in English).
10.2 Offer to purchase shares of Nortech Fibronic Inc. dated
February 6, 2000 among the Registrant, Claude Adrien Noel,
9086-9330 Quebec inc., Michel Bedard, 9086-9314 Quebec inc.,
Christine Bergeron and Societe en Commandite Capidem Quebec
Enr. and Certificate of Closing, dated February 7, 2000
among the same parties (including summary in English).
10.3 Offer to acquire a building, dated February 23, 2000,
between the Registrant and Groupe Mirabau inc. and as
accepted by Groupe Mirabau inc. on February 24, 2000
(including summary in English).
10.4 Lease Agreement, dated December 1, 1996, between the
Registrant and GEXFO Investissements Technologiques inc., as
assigned to 9080-9823 Quebec inc. on September 1, 1999
(including summary in English).
10.5 Lease Agreement, dated March 1, 1996, between the Registrant
and GEXFO Investissements Technologiques inc., as assigned
to 9080-9823 Quebec inc. on September 1, 1999 (including
summary in English).
10.6 Deferred Profit Sharing Plan, dated September 1, 1998.
10.7 Stock Option Plan, dated May 25, 2000.
10.8 Share Plan, dated April 3, 2000.
10.9 Loan Agreement between the Registrant and GEXFO
Investissements Technologiques inc., dated May 11, 1993, as
assigned to 9080-9823 Quebec inc. on September 1, 1999
(including summary in English).
10.10 Resolution of the board of directors of the Registrant,
dated September 1, 1999, authorizing the Registrant to
acquire GEXFO Distribution Internationale inc. from GEXFO
Investissements Technologiques inc. (including summary in
English).
10.11 Term Loan Offer, dated March 28, 2000, among the Registrant
and National Bank of Canada as accepted by the Registrant on
April 3, 2000 (including summary in English).
10.12 Form of Promissory Note of the Registrant to be issued to
GEXFO Investissements Technologiques inc.
10.13 Form of Registration Rights Agreement between the Registrant
and Germain Lamonde.
10.14 Sale Agreement, dated September 1, 1999, between the
Registrant and GEXFO Investissements Technologiques inc.
(including summary in English).
10.15 Form of Employment Agreement of Germain Lamonde.
21.1 Subsidiaries of the Registrant (included on page 35 of the
prospectus).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Fasken Martineau DuMoulin LLP (contained in
Exhibit 8.1).
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(contained in Exhibit 8.2).
24.1 Powers of Attorney (included on page II-5).
|
* To be filed by amendment.
II-3
ITEM 17. UNDERTAKINGS.
(a) The Registrant undertakes to provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defence of any action, suit or proceeding) is asserted by such director, officer nor controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(c) The Registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vanier, Province of Quebec, Canada on the 9(th) day of June, 2000.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
By: /s/ GERMAIN LAMONDE
-------------------------------------
Name: Germain Lamonde
Title: Chairman of the Board,
President
and Chief Executive Officer
|
POWER OF ATTORNEY
Each of the undersigned officers and directors of EXFO Electro-Optical Engineering Inc. constitutes and appoints Germain Lamonde and Pierre Plamondon and each or any of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement for the same offering which may be filed under Rule 462(b) increasing the number of securities for which registration is sought, and to file the same, with all exhibits thereto and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to enable the registrant to comply with the Securities Act and all requirements of the United States Securities and Exchange Commission, as fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on June 9, 2000.
SIGNATURE TITLE
--------- -----
/s/ GERMAIN LAMONDE Chairman of the Board, President and Chief Executive
--------------------------------------------- Officer
Germain Lamonde (Principal Executive Officer)
/s/ PIERRE PLAMONDON Vice-President, Finance and Chief Financial Officer
--------------------------------------------- (Principal Financial and Accounting Officer)
Pierre Plamondon, CA
/s/ PIERRE MARCOUILLER Director
---------------------------------------------
Pierre Marcouiller
/s/ ANDRE TREMBLAY Director
---------------------------------------------
Andre Tremblay
/s/ MICHAEL UNGER Director
---------------------------------------------
Michael Unger
|
II-5
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, the undersigned certifies that it is the duly authorized United States representative of EXFO Electro-Optical Engineering Inc. and has duly caused this Registration Statement to be signed on behalf of each of them by the undersigned, thereunto duly authorized, in the City of Vanier, Province of Quebec, Canada, on June, 9 2000.
EXFO AMERICA INC.
(Authorized United States
Representative)
By: /s/ GERMAIN LAMONDE ------------------------------------ Name: Germain Lamonde Title: Director |
II-6
INDEX TO EXHIBITS
NUMBER EXHIBIT
------ -------
1.1* Form of Purchase Agreement.
3.1 Amended Articles of Incorporation of the Registrant, as
currently in effect.
3.2 By-laws of the Registrant, as currently in effect.
3.3 Form of Amended and Restated Articles of Incorporation of
the Registrant, to be effective immediately prior to the
consummation of this offering.
4.1 Form of Subordinate Voting Share Certificate.
4.2 Form of Trust Agreement among the Registrant, Germain
Lamonde, GEXFO Investissements Technologiques inc., Fiducie
Germain Lamonde and G. Lamonde Investissements Financiers
inc.
5.1 Opinion of Fasken Martineau DuMoulin LLP regarding the
legality of the securities.
8.1 Opinion of Fasken Martineau DuMoulin LLP regarding Canadian
tax matters.
8.2 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding U.S. Federal Income Tax Matters.
10.1 Credit Agreement, dated July 6, 1995, among the Registrant,
National Bank of Canada and Banque Nationale de Paris
(Canada), as amended on December 22, 1999 and on March 28,
2000 (including summary in English).
10.2 Offer to purchase shares of Nortech Fibronic Inc. dated
February 6, 2000 among the Registrant, Claude Adrien Noel,
9086-9330 Quebec inc., Michel Bedard, 9086-9314 Quebec inc.,
Christine Bergeron and Societe en Commandite Capidem Quebec
Enr. and Certificate of Closing, dated February 7, 2000
among the same parties (including summary in English).
10.3 Offer to acquire a building, dated February 23, 2000,
between the Registrant and Groupe Mirabau inc., as accepted
by Groupe Mirabau inc. on February 24, 2000 (including
summary in English).
10.4 Lease Agreement, dated December 1, 1996, between the
Registrant and GEXFO Investissements Technologiques inc., as
assigned to 9080-9823 Quebec inc. on September 1, 1999
(including summary in English).
10.5 Lease Agreement, dated March 1, 1996, between the Registrant
and GEXFO Investissements Technologiques inc., as assigned
to 9080-9823 Quebec inc. on September 1, 1999 (including
summary in English).
10.6 Deferred Profit Sharing Plan, dated September 1, 1998.
10.7 Stock Option Plan, dated May 25, 2000.
10.8 Share Plan, dated April 3, 2000.
10.9 Loan Agreement between the Registrant and GEXFO
Investissements Technologiques inc., dated May 11, 1993, as
assigned to 9080-9823 Quebec inc. on September 1, 1999 and
Trust Deed, dated May 11, 1993, between the Registrant and
Mr. Richard Ouellet (including summary in English).
10.10 Resolution of the board of directors of the Registrant,
dated September 1, 1999, authorizing the Registrant to
acquire GEXFO Distribution Internationale inc. from GEXFO
Investissements Technologiques inc. (including summary in
English).
10.11 Term Loan Offer, dated March 28, 2000, among the Registrant
and National Bank of Canada, as accepted by the Registrant
on April 3, 2000 (including Summary in English).
10.12 Form of Promissory Note of the Registrant to be issued to
GEXFO Investissements Technologiques inc.
10.13 Form of Registration Rights Agreement between the Registrant
and Germain Lamonde.
10.14 Sale Agreement, dated September 1, 1999, between the
Registrant and GEXFO Investissements Technologiques inc.
(including summary in English).
10.15 Form of Employment Agreement of Germain Lamonde.
21.1 Subsidiaries of the Registrant (included on page 35 of the
prospectus).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Fasken Martineau DuMoulin LLP (contained in
Exhibit 8.1).
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(contained in Exhibit 8.2).
24.1 Powers of Attorney (included on page II-5).
|
* To be filed by amendment.
EXHIBIT 3.1
Canada Business Loi canadienne sur les ARTICLES OF INCORPORATION STATUTS CONSTITUTIFS
Corporations Act societes par actions (SUMMARY IN ENGLISH) (RESUME EN FRANCAIS)
-----------------------------------------------------------------------------------------------------------------------------------
1- Name of corporation Denomination de la societe
EXFO Electro-Optical Engineering Inc. EXFO Ingenierie Electro-Optique inc.
-----------------------------------------------------------------------------------------------------------------------------------
2- The place in Canada where the registered office is to be situated Lieu au Canada ou doit etre situe le siege social
Quebec City Metropolitan Area Region metropolitaine de Quebec
-----------------------------------------------------------------------------------------------------------------------------------
3- The classes and any maximum number of shares that the Categories et tout nombre maximal d'actions que la
corporation is authorized to issue societe est autorisee a emettre
Schedule A attached hereto is incorporated herein L'annexe A ci-jointe fait partie integrante du present
by reference as if herein set forth at length formulaire.
-----------------------------------------------------------------------------------------------------------------------------------
4- Restrictions, if any, on share transfers Restrictions sur le transfert des actions,
s'il y a lieu
None Aucune
-----------------------------------------------------------------------------------------------------------------------------------
5- Number (or minimum and maximum number) of directors Nombre (ou nombre minimal et maximal) d'administrateurs
Schedule B attached hereto is incorporated herein by reference L'annexe B ci-jointe fait partie integrante du present
as if herein set forth at length formulaire
-----------------------------------------------------------------------------------------------------------------------------------
6- Restrictions, if any, on business the corporation may carry on Limites imposees a l'activite commerciale de la
societe, s'il y a lieu
None. Aucune.
-----------------------------------------------------------------------------------------------------------------------------------
7- Other provisions, if any Autres dispositions, s'il y a lieu
The directors may, without obtaining the authorization Les administrateurs peuvent, sans devoir obtenir
of the shareholders, borrow money on the credit of the l'autorisation des actionnaires, contracter des
Corporation, issue bonds and other securities,give a emprunts sur le credit de la Societe, emettre des
guarantee on behalf of the Corporation to secure obligations et autres valeurs mobilieres, garantir,
performance of an obligation of any person and au nom de la Societe, l'execution des obligations
mortgage, hypothecate, pledge or create a security d'une autre personne et grever d'une surete, notamment
interest in the Corporation's properties. par hypotheque, les biens de la Societe.
-----------------------------------------------------------------------------------------------------------------------------------
: :
: :
-----------------------------------------------------------------------------------------------------------------------------------
:
-----------------------------------------------------------------------------------------------------------------------------------
|
SCHEDULE A
DESCRIPTION OF CURRENT SHARE CAPITAL
(SUMMARY IN ENGLISH)
The Corporation is authorized to issue an unlimited number of Class "A" Shares, Class "B" Shares, Class "C" Shares, Class "D" Shares, Class "E" Shares, Class "F" Shares and Class "G" Shares, all without par value. The following is a summary of the rights, privileges, restrictions and conditions attached thereto:
Class "A" Shares: Voting and participating;
Class "B" Shares: Non-voting, participating, redeemable at the option of
the holder at their paid-in value, ranking in priority
to Class "A", Class "E" and Class "F" Shares;
Class "C" Shares: Non-voting, non-participating, bearing a non-cumulative
annual dividend at a rate to be determined by the Board
of Directors but not less than 10% of their paid-in
value, redeemable at the option of the holder or
Corporation at their paid-in value plus any unpaid
dividends, ranking in priority to Class "A" Shares,
Class "B" Shares and Class "F" Shares;
Class "D" Shares: Non-voting, non-participating, bearing a cumulative
annual dividend calculated on their paid-in value using
the Bank of Canada base rate in effect at the beginning
of the Corporation's fiscal year, redeemable at the
option of the Corporation at their paid-in value plus
any unpaid dividends, ranking in priority to Class "A"
Shares, Class "B" Shares, Class "C" Shares and Class
"F" Shares;
Class "E" Shares: Non-voting, non-participating, bearing a non-cumulative
dividend at a rate of 0.5% per month of their paid-in
value, redeemable at the option of the holder or the
company at their paid-in value plus a premium and any
unpaid dividends, ranking in priority to Class "A"
Shares, Class "C" Shares, Class "D" Shares and Class
"F" Shares;
Class "F" Shares: Non-voting, participating, automatically converted into
the class of shares offered to the public upon an
initial public offering for shares of the Corporation;
Class "G" Shares: Non-voting, non-participating, mandatorily redeemable
on November 30, 2000 at their paid-in value, ranking in
priority to Class "B" Shares, Class "C" Shares, Class
"D" Shares and Class "E" Shares; the Corporation may
elect to settle the redemption value, provided the
Corporation has effected an initial public offering of
its Class "A" Shares,
|
by issuing the number of Class "A" Shares obtained by
dividing the paid-in value of the Class "G" Shares,
being C$800,000, by the average trading price of the
Class "A" Shares for a period of ten trading days
preceding November 30,2000; ranking after Class "A" and
Class "F" Shares.
|
SCHEDULE B
ANNEXE B
NUMBER (OR MINIMUM AND MAXIMUM NUMBER) OF DIRECTORS
The minimum number of directors shall be 3, and the maximum number of directors shall be 12. Moreover, directors shall be authorized to appoint one or more directors (in addition to the number of directors elected at the last annual meeting of shareholders) who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors
elected at the previous annual meeting of shareholders.
EXHIBIT 3.2
EXFO ELECTRO-OPTICAL ENGINEERING INC.
CODE OF GENERAL BY-LAWS
enacted pursuant to the
Canada Business Corporations Act
Adopted as of: May 25, 2000
CODE OF GENERAL BY-LAWS OF
EXFO ELECTRO-OPTICAL ENGINEERING INC.
enacted pursuant to the
Canada Business Corporations Act
Page
DEFINITIONS.................................................................. 1
LOCATION OF REGISTERED OFFICE AND OFFICES
Registered office....................................................... 1
Offices................................................................. 1
SHAREHOLDERS
Annual meetings......................................................... 1
Special meetings........................................................ 2
Place of meetings....................................................... 2
Notice of meetings...................................................... 2
Record Date............................................................. 3
Waiver of Notice........................................................ 3
Chairman................................................................ 3
Quorum.................................................................. 3
Representation at meetings.............................................. 4
Right to Vote........................................................... 4
Decisions by a Majority................................................. 4
Casting Vote............................................................ 4
Vote by Show of Hands................................................... 5
Voice Vote.............................................................. 5
Vote by Secret Ballot................................................... 5
Procedure at meetings................................................... 5
Scrutineers............................................................. 5
Addresses of the Shareholders and Subsequent Transferees of Shares...... 6
Signed Resolutions...................................................... 6
|
Page
BOARD OF DIRECTORS
Number................................................................ 6
Qualification......................................................... 6
Election and Term of Office........................................... 6
Resignation........................................................... 7
Removal............................................................... 7
Vacancy............................................................... 7
Replacement........................................................... 7
Remuneration.......................................................... 7
General Powers of the Directors....................................... 7
Irregularity.......................................................... 8
Use of Property or Information........................................ 8
Conflicts of Interest................................................. 8
Contracts with the Corporation........................................ 8
MEETINGS OF THE BOARD OF DIRECTORS
Calling of meetings................................................... 9
Participation by Telephone............................................ 9
Quorum................................................................ 10
Meeting Chairman and Secretary........................................ 10
Procedure............................................................. 10
Voting................................................................ 10
Signed Resolution..................................................... 10
OFFICERS................................................................... 11
Officers.............................................................. 11
Chairman of the Board................................................. 11
President............................................................. 11
Vice-President........................................................ 11
General Manager or Managing Director.................................. 11
Comptroller........................................................... 12
Secretary............................................................. 12
Treasurer............................................................. 12
Removal, Discharge and Resignation.................................... 12
Vacancy............................................................... 12
Remuneration.......................................................... 12
EXECUTIVE COMMITTEE
Election.............................................................. 13
Officers, Quorum and Procedure........................................ 13
Chairmanship.......................................................... 13
Secretary............................................................. 13
Powers................................................................ 13
Supervisory Power of the Board of Directors........................... 13
Participation by Telephone and Signed Resolutions..................... 13
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Page
Meetings............................................................... 13
Remuneration........................................................... 14
Removal and Replacement................................................ 14
AUDIT COMMITTEE
Composition............................................................ 14
Duties................................................................. 14
Meetings............................................................... 14
Applicable By-laws..................................................... 14
OTHER COMMITTEES
Other Committees....................................................... 14
INDEMNIFICATION AND EXEMPTION
Indemnity.............................................................. 15
Insurance.............................................................. 15
Reimbursement of expenses.............................................. 15
SHARE CAPITAL
Issue and Stock Options................................................ 15
Share Certificates and Stock Transfers................................. 15
Securities Register.................................................... 16
Transfer Agents and Registrars......................................... 16
Record Date and Closing of Books....................................... 16
Lost or Destroyed Certificates......................................... 16
DIVIDENDS
Dividends.............................................................. 17
FISCAL YEAR AND AUDIT
Fiscal Year............................................................ 17
Audit.................................................................. 17
CORPORATE REPRESENTATION FOR CERTAIN PURPOSES
Declaration............................................................ 18
Representation at meetings............................................. 18
Signature of Documents................................................. 18
Declarations in the Register........................................... 19
MISCELLANEOUS PROVISIONS
Conflict with the Articles............................................. 19
Amendments............................................................. 19
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CODE OF GENERAL BY-LAWS OF
EXFO ELECTRO-OPTICAL ENGINEERING INC.
(the "Corporation")
enacted pursuant to the
Canada Business Corporations Act
DEFINITIONS
For the purposes of these By-laws, unless otherwise provided :
- "Act" means the Canada Business Corporations Act, R.S.C. (1985) ch. C-44, as well as any amendment which may be made thereto, and any act which may be substituted therefor;
- "Articles" means the articles of association, of amalgamation or of continuance of the Corporation, as amended from time to time;
- "Auditor" means the auditor of the Corporation and includes an auditing firm;
- "Ordinary Resolution" means a resolution adopted by the majority of the votes cast by the shareholders qualified to vote in the circumstances, or signed by all of them;
- "Resident Canadian" has the particular meaning ascribed by the Act to such expression, but summarily includes a Canadian citizen and a permanent resident, within the meaning of the Immigration Act, who ordinarily reside in Canada;
LOCATION OF REGISTERED OFFICE AND OFFICES
1. Registered office. The registered office of the Corporation is situated in the city or regional municipality recorded in the Articles, at the address determined by the Board of Directors.
2. Offices. The Corporation may, in addition to its registered office, establish elsewhere within or outside Canada any other office and agency.
SHAREHOLDERS
3. Annual meetings. The annual meeting of the shareholders of the Corporation shall be held yearly on the date and at the time the Board of Directors may determine in order to receive and examine the financial statements and, if any, the report of the Auditor, elect directors, appoint an
Auditor and fix or authorize the Board of Directors to fix his remuneration and to examine, deal with and dispose of such other business as may properly come before the meeting.
4. Special meetings. Special meetings of the shareholders may be called at any time as determined by the President or the Board of Directors and shall be called by the Board of Directors when required by one or more shareholders holding no less than five per cent (5%) of the issued shares of the Corporation carrying the right to vote at a meeting in conformity with the Act.
5. Place of meetings. Meetings of the shareholders shall be held in Canada at the registered office of the Corporation or at any other place that may be fixed by the Board of Directors. Meetings of the shareholders may be held outside Canada if all shareholders entitled to vote thereat so agree; a shareholder who attends such meeting is deemed to have so agreed, unless he is present for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.
6. Notice of meetings. Notice of each annual meeting and of each special meeting of the shareholders shall be delivered to the shareholders entitled to vote thereat, the directors and the Auditor or, at the discretion of the person charged with the giving of such notice, mailed by ordinary mail, transmitted by facsimile or sent by electronic mail to the addressees at their respective addresses entered in the books of the Corporation, no less than twenty-one (21) days and no more than fifty (50) days prior to the date fixed for the meeting. If the address of the addressee is not entered in the books of the Corporation, the notice may be sent as aforesaid to the address that the person sending the notice considers to be most likely to reach such addressee promptly. Any irregularity in the notice of meeting or giving thereof, including the accidental omission to send such notice or failure to receive on the part of the shareholder, shall in no way affect the validity of proceedings of the meeting in question.
Such notice shall specify the date, time and place of the meeting. The notice of the annual meeting may, but need not, specify the nature of the business when such meeting is called only to examine the financial statements along with the report of the Auditor, to elect directors and to re-appoint the incumbent Auditor. The notice of the annual meeting at which other business shall be transacted, as well as the notice of special meeting, shall state:
(a) the nature of business to be considered in sufficient detail to permit the shareholders to form a reasoned judgment thereon; and
(b) the text of any Special Resolution to be submitted to the meeting.
It is not necessary to give notice of the reconvening of an adjourned meeting other than by announcement at the earlier meeting that is adjourned; a new notice of meeting shall, however, be required if the shareholders' meeting is adjourned one (1) or more times for an aggregate of thirty (30) days or more.
The signature of any notice of meeting may be written, stamped, typewritten, printed or otherwise mechanically reproduced.
A certificate of the Secretary or of any other duly authorized officer of the Corporation in office at the time of the making of the certificate or of any officer, transfer agent or registrar of transfers of shares of the Corporation shall be conclusive evidence that may be set up against any shareholder or director of the sending or delivery of a notice of meeting.
7. Record date. Subject to section 134 of the Act, directors may by resolution
fix in advance a date and time as the record date to determine which
shareholders are entitled to (i) receive notice of meetings of shareholders,
(ii) vote at meetings of shareholders and (iii) receive financial statements of
the Corporation in accordance with subsection 159(1) of the Act.
Should the directors fail to fix a date and time in advance as a record date for any aforementioned issue for any meetings of shareholders of the Corporation, the following provisions shall apply, as the case may be:
(a) the record date used to determine which shareholders are entitled to receive notice of meetings of shareholders shall be fixed at the close of business of the day immediately preceding that on which notice has been given or sent or, failing such notice, on the day of the meeting;
(b) the record date used to determine which shareholders are entitled to vote during meetings of shareholders shall be fixed on the day of such meeting; and
(c) the record date used to determine which shareholders are entitled to receive financial statements of the Corporation shall be fixed at the close of business of the day the directors adopt a resolution to that effect.
8. Waiver of notice. A shareholder or any other person entitled to be summoned to a meeting of shareholders may waiver a notice of meeting prior to, during or after such meeting is held. The mere presence of a shareholder shall constitute a waiver, unless he is present for the express purpose of opposing the meeting on the grounds that it was irregularly convened.
9. Chairman. The Chairman of the Board of Directors or, failing which, the President of the Corporation or any other person appointed for such purpose by the Board of Directors, shall preside at meetings of shareholders.
10. Quorum. A quorum of shareholders shall exist at an annual or special meeting of shareholders, regardless of the number of persons physically present at the meeting, if one or more holders of shares conferring not less than 33 1/3% of the total number of votes attached to the aggregate of the shares carrying voting rights at such meeting are present physically or represented in accordance with section 11 hereinbelow.
If a quorum is present at the opening of the meeting, the shareholders present or represented may proceed with the business of the meeting, even if a quorum is not present throughout the meeting.
If a quorum is not present at the opening of the meeting, the shareholders present or represented may adjourn the meeting, provided there is a majority vote to that effect, to another time and place but may not transact any other business.
If a quorum is present at the reconvening of the meeting so adjourned, the meeting may then proceed, failing which, a new meeting shall be convened.
11. Representation at meetings. Shareholders shall be entitled to vote in person or, if a body corporate, by representatives duly authorized by resolution of its directors or its decision-making body. Shareholders shall also be entitled to vote by proxy.
A proxyholder need not be a shareholder of the Corporation and may represent several shareholders. A proxy may be given for all or part of a shareholder's shares.
A proxy shall be valid only at the meeting in respect of which it is given or any adjournment thereof.
A proxy appointing a proxyholder shall be in the form prescribed by the Act and its Regulations.
The Board of Directors may specify, in the notice of meeting of shareholders, a date and time limit for depositing with the Corporation or its agent proxies to be used at the meeting; such date and time limits shall not precede the meeting by more than 48 hours, excluding Saturdays and statutory holidays.
The Board of Directors may also permit particulars of proxies for use at or in connection with, any such meeting which have been deposited with the Corporation or its agent at a place other than the place of such meeting to be sent by facsimile to the Secretary of the Corporation prior to such meeting. In such event, such proxies, if otherwise in order, shall be valid and any votes cast in accordance therewith shall be counted.
12. Right to Vote. Subject to the provisions of the Act, each shareholder is entitled to as many votes as his shares in the Corporation carry votes.
13. Decisions by a Majority. Unless otherwise provided in the Act, any question submitted to the meeting of shareholders shall be decided by a simple majority (50% + 1) of validly cast votes.
14. Casting vote. In the case of a tie vote, the Chairman of the meeting shall have the casting vote.
15. Vote by show of hands. Except where a voice vote or secret ballot has been requested, votes shall be taken by a show of hands. In such a case, shareholders or proxyholders shall vote by raising their hands and the number of votes shall be calculated based on the number of hands raised.
16. Voice vote. If the Chairman of a meeting so orders, or any proxyholder representing at least ten per cent (10%) of the votes attaching to outstanding voting shares so requests (such requests may be withdrawn), and if a vote by secret ballot has not been requested, votes shall be taken by voice vote. In such a case, each shareholder or proxyholder shall orally state his name and that of each shareholder he represents by proxy, the number of votes he represents and how he intends to cast such votes. The number of votes so cast shall determine whether or not a resolution is adopted.
17. Vote by secret ballot. If the Chairman of a meeting so orders, or a shareholder or proxyholder entitled to vote so requests, the vote shall be taken by secret ballot. A request for a vote by secret ballot may be made at any time before the meeting is closed, regardless of whether a vote by show of hands or a voice vote has been previously held or not; such request may also be withdrawn. Each shareholder or proxyholder shall submit to the scrutineers one or several ballots on which he shall have indicated how he intends to cast his votes and, where relevant, his name and the number of votes he has. The result of a secret ballot shall be deemed to be a resolution of the meeting at which the ballot was taken whether or not a vote by show of hands or a voice vote had previously been taken on the same question.
18. Procedure at meetings. The Chairman of any meeting of shareholders shall conduct the procedure thereat in all respects and his decision on all matters, including any question regarding the validity or invalidity of any proxy or the admissibility or inadmissibility of a proposal, shall be conclusive and binding upon all the shareholders.
A declaration by the Chairman at any meeting that a resolution has been carried or not, whether unanimously or by particular majority, shall be conclusive evidence of the fact.
At any time during the meeting, at his own discretion or with the approval of the shareholders given by a simple majority, the Chairman may adjourn a meeting provided he has reasonable grounds to do so, such as when confusion and disorder render the harmonious and orderly conduct of a meeting impossible, and he need not give notice for the reconvening of a meeting so adjourned.
Should the Chairman of the meeting fail to carry out his duties loyalty, the shareholders may, at all times, remove and replace him with another person selected from amongst themselves.
The directors of the Corporation shall be entitled, in such sole capacity, to attend meetings of shareholders and to take the floor thereat.
19. Scrutineers. The Chairman of any meeting of shareholders may appoint scrutineers, who may but need not be directors, officers, employees or shareholders of the Corporation, to act as the Chairman shall direct.
20. Addresses of the shareholders and subsequent transferees of shares. Every shareholder shall furnish the Corporation with a mailing or electronic address to which all corporate notices intended for such shareholder may be sent. Every person who, by operation of the Act, transfer or other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which, prior to the entry of his name and address on the register, is given to the person whose name appears on the register at the time such notice is given.
21. Signed resolutions. Subject to subsections 110(2) and 168(5) of the Act, a resolution signed by all the shareholders entitled to vote on such resolution shall be as valid as if it had been passed unanimously at a meeting duly convened by such holders. Each duly signed resolution shall be kept with the minutes of the meetings of shareholders.
BOARD OF DIRECTORS
22. Number. The business of the Corporation shall be administered by a Board of Directors composed of a fixed number of directors indicated in the Corporation's Articles. If the Articles provide for a minimum and maximum number of directors, the Board of Directors shall be composed of such fixed number of directors but not less than three (3), as shall be established by resolution passed by the Board of Directors or, failing this, as the shareholders choose to elect within such limits.
23. Qualification. No person shall be qualified for election as a director if he is less than eighteen (18) years of age; if he is of legal age and has been placed under tutorship or curatorship; if he has been declared of unsound mind by a court in Canada or elsewhere; if he has the status of an undischarged bankrupt; or if a court has prohibited him from holding the office of director. Unless otherwise set out in the Articles of the Corporation, a director need not be a shareholder. A majority of the directors shall be Resident Canadians, unless otherwise set out in the Act. At least three (3) of the directors shall be independent and shall not be officers or employees of the Corporation or its subsidiaries. A retiring director, if otherwise qualified, shall be eligible for re-election.
24. Election and term of office. Except for the appointment of a director following a vacancy during a term of office or for the election of one or several additional directors, each director shall be elected by Ordinary Resolution at a general annual meeting of shareholders, subject to the provisions of the Articles of Corporation providing for cumulative voting or the exclusive right of certain classes of shareholders to elect one or several directors. Each director shall be elected either for a fixed term, which shall end no later than at the close of the third annual meeting thereafter, or for an indeterminate term, which shall end at the close of the first annual meeting thereafter. Not
all directors need have the same term of office. Directors shall remain in office, failing the election of new directors by a meeting of shareholders, until such time as a substitute has been elected.
25. Resignation. A director may resign from his office by sending written notice thereof to the Corporation and need give grounds for such resignation. Said resignation shall take effect on the date of sending or remittance thereof, or on such later date as may be indicated therein.
26. Removal. Unless otherwise provided in the Articles, shareholders may remove a director by Ordinary Resolution at a special meeting. The director who receives notice of his impending removal may, in a written statement, explain to the Corporation the reasons why he opposes his removal, and the Corporation shall forward such written statement to the shareholders entitled to vote in such matter.
A vacancy created by the removal of a director may be filled by the shareholders at the same meeting; in such a case, notice of such meeting shall indicate that an election is to be held should the resolution of removal be carried.
Should the holders of shares of a particular class have the exclusive right to elect a director, such director may only be removed by Ordinary Resolution at a special meeting of such holders.
The removal of a director, as well as his election, shall be at the discretion of the shareholders. A director may be removed at any time and such removal need not be based on any particular grounds, whether serious or not. Neither the Corporation nor the shareholders voting in favour of the removal shall incur any liability toward the director by the mere fact of his removal, even if there be no grounds therefor.
27. Vacancy. The office of a director shall become vacant as of the moment his resignation or removal takes effect; moreover, a vacancy is created when a director is no longer qualified to perform his duties pursuant to section 23 or if he dies.
28. Replacement. If a vacancy occurs on the Board of Directors, the remaining directors may appoint a qualified person to fill such vacancy, for the unexpired term of office. The directors may nonetheless continue to act despite one or several vacancies, provided a quorum exists. Failing a quorum, the remaining directors shall forthwith call a special meeting of shareholders to fill such vacancy, in accordance with section 111 of the Act.
29. Remuneration. The remuneration to be paid to the directors shall be as fixed by resolution of the Board of Directors. Such remuneration shall be in addition to the salary or remuneration received as such from the Corporation by an officer, employee or service provider who is also a director, unless a resolution shall provide otherwise. Directors may also seek reimbursement for traveling and other expenses incurred in connection with their duties.
30. General powers of the directors. The directors of the Corporation shall manage and administer the Corporation and may make or cause to be made any contract which it may lawfully enter into. The directors shall be invested with all such powers and authority as the Corporation by statute or its Articles is authorized to exercise and do. The directors shall always act by resolution.
The directors may, in particular, acquire or dispose of, either by purchase, sale, lease, exchange, mortgage or otherwise, stocks, interests, warrants, options or other securities, buildings and other movable or immovable property or any right or interest therein; for each transaction, they shall fix the consideration and other conditions.
31. Irregularity. Notwithstanding that it be afterwards discovered that there was some defect in the election of the Board of Directors or the election or appointment of any director or that a director lacks or has lost his qualification, all acts thereof shall be as valid and binding upon the Corporation as if every such board or person had been duly elected or appointed and had been qualified.
32. Use of property or information. No director may mingle the Corporation's property with his own property or use for his own profit or that of a third party any property of the Corporation or any information he obtains by reason of his duties, unless he is expressly and specifically authorized to do so by the shareholders of the Corporation.
33. Conflicts of interest. Each director shall avoid placing himself in a situation of conflict between his personal interest and his obligations as a director of the Corporation.
He shall promptly disclose to the Corporation any interest he has in any enterprise or association that is likely to place him in a situation of conflict of interest, as well as the rights he may enforce thereagainst, indicating, if such be the case, the nature and value thereof. Such disclosure of interest shall be recorded in the minutes of the proceedings of the Board of Directors. A general disclosure shall remain valid until the facts have changed, and a director need not reiterate such declaration for any particular, subsequent transaction.
34. Contracts with the corporation. A director or an officer may, even in performing his duties, enter into material contracts with the Corporation, or be a director, an officer or a holder of a material interest in a body corporate that is a party to such contract. He shall then, in accordance with section 120 of the Act, disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent of his interest in such contract, even if such contract, within the scope of the normal business activity of the Corporation, does not require the approval of either the directors or the shareholders. For the purposes of this by-law, a general notice that the director or officer is a director, an officer or a holder of a material interest in a body corporate and is to be regarded as interested in any contract made with that body corporate, is a sufficient declaration of interest.
A director who is so interested in a contract shall not discuss or vote on such resolution to approve the contract unless the contract is one of the contracts referred to in subsection 120(5) of the
Act, that is, relating primarily to the remuneration or indemnification of such director, or a contract with an affiliate of the Corporation.
At the request of the President or any director, the interested director shall leave the meeting while the Board of Directors discusses and votes on the contract concerned.
Neither the Corporation nor any of its shareholders may contest the validity of a contract entered into with a director or an officer of the Corporation, or with a body corporate in which such director or officer is a director, an officer or a holder of a material interest, for such sole reason, provided such director or officer has disclosed his interest as aforementioned, the Board of Directors or the Shareholders of the Corporation have approved the contract, and the contract was, at that time, equitable for the Corporation.
MEETINGS OF THE BOARD OF DIRECTORS
35. Calling of meetings. Every year, immediately following the annual general meeting of the shareholders, a meeting of the new directors present shall be held without further notice if they constitute a quorum to elect or appoint the officers of the Corporation and consider, deal with and dispose of any further business.
Meetings of the Board of Directors may be called by or by order of the Chairman of the Board of Directors, if any, the President of the Corporation or two (2) directors and may be held anywhere within or outside Canada. A notice of each meeting, specifying the place, date and time, shall be sent to each director at his residence or workplace. The notice shall be sent no less than five (5) days prior to the date fixed for the meeting by ordinary or registered mail or by facsimile or electronic mail. In the absence of an address for a director, the notice may be sent to the address at which the sender considers that the notice is most likely to reach the director promptly.
The Board of Directors may resolve to hold periodic or fixed meetings of the Board of Directors, with or without notices of meeting, at any place in Canada or elsewhere.
The notice of a meeting of the Board of Directors need not specify the goals or business thereof, with the exception of those matters referred to in subsection 115(3) of the Act, in particular, the declaration of dividends, the issue of securities, the purchase of shares issued by the Corporation, the approval of the annual financial statements, the filling of vacancies on the Board of Directors or in the office of Auditor and the adoption, amendment or repealing of by-laws.
Any director may waive in writing a notice of meeting of the Board of Directors prior to, during or after the holding of such meeting. His mere presence at a meeting shall constitute a waiver, unless he is present for the sole purpose of objecting to the holding thereof on the grounds that the manner of calling it was irregular.
Notice need not be given of the reconvening of an adjourned meeting of directors if the date, time and place of such meeting were announced at the initial meeting.
36. Participation by telephone. Directors may, if all are in agreement, participate in a meeting of the Board of Directors using means permitting all participants to communicate orally amongst themselves, in particular, by telephone. A director participating in the meeting by such means shall be deemed to have attended the meeting. The directors shall then vote by a voice vote, by way of derogation to section 40 hereinbelow.
37. Quorum. A majority of the directors in office shall constitute a quorum for a meeting of the Board of Directors. A quorum shall be present throughout the meeting. Once a quorum exists, the directors may exercise their powers, notwithstanding any vacancy on the board. No business shall be dealt with unless the number of "Resident Canadian" directors prescribed in the Act is present.
38. Meeting chairman and secretary. Meetings of the Board of Directors shall be chaired by the Chairman of the Board of Directors, if any, or, failing him, by the President of the Corporation or, failing him, by a Vice-President designated for such purpose by the President. The Secretary of the Corporation shall act as Secretary of the meetings. The directors present at a meeting may nevertheless appoint any other persons as Chairman or Secretary of such meetings.
39. Procedure. The Chairman of the meeting shall ensure that the meeting is conducted smoothly and submit to the Board of Directors the motions on which a vote is to be taken and shall generally conduct the procedure thereat in all respects, in which regard his decision shall be final and binding on all directors. Should the meeting Chairman fail to submit a motion, any director may submit it himself before the meeting is adjourned or closed and, if such motion lies within the competence of the Board of Directors, the Board of Directors shall consider it. For such purpose, the agenda of each meeting of the Board of Directors shall be deemed to include a period for the submission of motions by the directors. Should the Chairman of the meeting fail to carry out his duties loyally, the directors may remove him at any time and replace him by another person.
40. Voting. Each director shall be entitled to one vote, and all matters shall be decided by the majority of votes cast. The vote shall be taken by a show of hands unless the Chairman of the meeting or a director requests a ballot, in which case the vote shall be taken by ballot. If the vote is taken by ballot, the meeting Secretary shall act as Scrutineer and count the ballots. The fact of having voted by ballot shall not deprive a director of the right to express his dissent in respect of the resolution concerned and to cause such dissent to be entered. Voting by proxy shall not be permitted, and the Chairman of the meeting shall have no casting vote in the case of an equality of votes.
41. Signed resolution. A written resolution, signed by all the directors, shall be valid and have the same effect as though it were adopted at a meeting of the Board of Directors duly called and held. Each signed resolution shall be inserted in the minute book of the Corporation, in order of its date, in the same manner as minutes.
OFFICERS
42. Officers. The officers of the Corporation shall be the Chairman of the board, if appointed, the President, and, if elected or appointed, one or more Vice-Presidents, the General Manager or Managing Director, the Comptroller, the Secretary, the Treasurer, and such other officers as the Board of Directors may appoint and whose duties it may determine by resolution. Subject to those powers which, pursuant to the Act, may only be exercised by the Board of Directors, the officers of the Corporation shall exercise such powers and authority and shall perform such duties, as prescribed by the Board of Directors in addition to those specified in the by-laws. The same person may hold more than one (1) office. None of the officers of the Corporation need be directors or shareholders of the Corporation, with the exception of the President, if any, the Chairman of the Board of Directors, if any, and the General Manager, if any.
The directors may also appoint other agents, officials and employees of the Corporation within or outside Canada, who may be given such titles and who shall exercise such powers and authority and perform such duties of management, as the Board of Directors may determine.
In the event of the absence of any officer or for any other reason that the directors may deem sufficient, the Board of Directors may delegate the powers and authority of such officer to any other officer or to any director of the Corporation.
43. Chairman of the board. The Chairman of the board shall preside at all meetings of the Board of Directors and shareholders.
44. President. The President shall be the chief officer of the Corporation and, subject to the control of the directors and the appointment of a General Manager or Managing Director, shall supervise, administer and manage the business and affairs of the Corporation generally. In the event of the absence, inability or failure of the Chairman of the board to act, the President shall preside at all meetings of the Board of Directors and of the shareholders.
45. Vice-president. In the event of the absence, inability or failure of the President to act, the Vice-President or, if more than one (1) Vice-President, the First Vice-President or, failing him, the Second Vice-President, and so forth, shall assume the powers and perform the duties of the President. The Vice-President shall exercise such powers and authority and perform such duties prescribed by the Board of Directors or by the President.
46. General manager or managing director. The General Manager or Managing Director shall, subject to the control of the President, manage the operations of the Corporation generally. He shall comply with all instructions received from the Board of Directors and shall give to the Board of Directors or the members thereof the information they require concerning the affairs of the Corporation.
The General Manager or Managing Director shall be a Resident Canadian and a director. The Board of Directors may delegate to such General Manager or Managing Director any of the powers of the board except those which by law a General Manager or Managing Director has no authority to exercise.
47. Comptroller. The Comptroller shall, subject to the control of the President, be the chief accounting officer of the Corporation. He shall, upon request, render account to the President and the directors of the financial position of the Corporation and all its transactions. He shall be entrusted with, and have custody of, the books of account.
48. Secretary. The Secretary shall attend to the preparation and sending of all notices of the Corporation. He shall keep the minutes of all meetings of the directors, the committees of the Board of Directors and the shareholders in a book or books to be kept for that purpose. He shall have charge of the records of the Corporation including books containing the names and addresses of the members of the Board of Directors, together with copies of all reports made by the Corporation and such other books and papers as the directors may direct. He shall be responsible for the keeping and filing of all books, reports, certificates and all other documents required by law to be kept and filed by the Corporation. He shall be subject to the control of the President.
49. Treasurer. The Treasurer, subject to the control of the President, shall have general charge of the finances of the Corporation. He shall deposit all moneys and other valuable effects of the Corporation in the name and to the credit of the Corporation in such banks or other depositories as the Board of Directors may designate.
50. Removal, discharge and resignation. The Board of Directors, by the affirmative vote of the absolute majority of its members, may remove any officer with or without cause at any time, unless the resolution or contract providing for his appointment stipulates otherwise. Any agent, officer, official or servant who is not an officer of the Corporation may be discharged by the President or any other officer authorized for such purpose, with or without cause at any time.
Any officer may resign his office at any time by remitting his resignation in writing to the President or the Secretary of the Corporation, or at a meeting of the Board of Directors, unless otherwise agreed.
51. Vacancy. Any vacancy occurring in the office of any officer may be filled by the Board of Directors.
52. Remuneration. The remuneration of all officers shall be fixed by the Board of Directors. The remuneration of all other mandataries, officers, officials and servants of the corporation shall be fixed by the President or any other officer authorized for such purpose.
EXECUTIVE COMMITTEE
53. Election. The Board of Directors may appoint from among their number a committee of the Board of Directors, designated "Executive Committee", containing such proportion of Resident Canadians as may be required by the Act.
54. Officers, quorum and procedure. The committee shall have the power to appoint its officers, to fix its quorum at not less than a majority of its members, and to determine its procedure.
55. Chairmanship. Meetings of the Executive Committee shall be chaired by the Chairman of the Board of Directors or, if none is appointed, by the President of the Corporation. In his absence, meetings of the Executive Committee shall be chaired by the person whom the members of the Executive Committee present choose from amongst themselves.
56. Secretary. The Secretary of the Corporation shall act as Secretary of the committee unless another secretary is appointed by the committee.
57. Powers. The Executive Committee shall possess the powers and authority of the Board of Directors for the administration of the day-to-day affairs of the Corporation, except for those powers which, by law, must be exercised by the Board of Directors, as well as the powers which the Board of Directors may expressly reserve for itself.
58. Supervisory power of the board of directors. All acts of the Executive Committee shall be subject to the supervision of the Board of Directors and shall be reported to the Board of Directors should the latter so directs. The Board of Directors may invalidate or amend decisions made by the Executive Committee, provided that the rights of third parties are not affected.
59. Participation by telephone and signed resolutions. Sections 36 and 41 shall apply, mutatis mutandis, to meetings of the Executive Committee.
60. Meetings. Meetings of committee may be held at the registered office of the Corporation or at such other place within or outside Canada as the committee may determine.
Meetings of the committee may be called by or by the order of its Chairman or two members of such committee.
A member of the Executive Committee may waive in writing a notice of the meeting of the Executive Committee, prior to or after the holding thereof. His mere attendance at a meeting shall be deemed a waiver, except where he attends a meeting solely for the purpose of objecting to the holding thereof on the grounds that the manner of calling it was irregular.
61. Remuneration. The members of the committee shall be entitled to receive such remuneration for their services as members of the committee as the Board of Directors may determine.
62. Removal and replacement. The Board of Directors may at any time remove from office any member of a committee of the Board of Directors.
The Board of Directors may also fill any vacancy which may occur on a committee.
AUDIT COMMITTEE
63. Composition. The Audit Committee shall consist of at least three (3) directors, appointed each year by the Board of Directors. The audit committee shall be comprised solely of independent directors.
64. Duties. The Audit Committee shall review the financial statements of the Corporation prior to their approval by the Board of Directors and shall perform all the other duties the latter may establish.
65. Meetings. The meetings of the Audit Committee shall be convened by one of its members or by the Auditor.
66. Applicable by-laws. The Audit Committee shall, in all other respect, be subject to the same aforementioned provisions that apply to the Executive Committee.
OTHER COMMITTEES
67. Other committees. The Board of Directors may create any other committee it shall deem appropriate, whether or not it be comprised of members of the Board of Directors. The Board of Directors may delegate to any such committee of the board of directors any of the powers of the board except those which pursuant to the Act a committee of the board of directors has no authority to exercise. Unless otherwise ordered by the board, each committee so created shall have the power to determine its own quorum of no less than a majority of its members, to elect its own Chairman and to determine its own procedures.
INDEMNIFICATION AND EXEMPTION
68. Indemnity. Subject to the limitations provided by the Act, the Corporation shall indemnify any director or officer of the Corporation, former director or officer of the Corporation or person who acts or acted at the Corporation's request as a director or officer of a corporation of which the Corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation or such corporation, provided:
(a) he acted honestly and in good faith with a view to the best interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds to believe that his conduct was lawful.
69. Insurance. To the extent permissible by law, the Corporation may purchase and maintain insurance for the benefit of any person referred to above against such liability as the Board of Directors may from time to time determine.
70. Reimbursement of expenses. Subject to a contractual agreement stipulating or limiting such obligation, the Corporation shall reimburse the director, officer or other agent for expenses reasonably incurred by him within the performance of his duties. An expense shall be reimbursed upon production of any appropriate vouchers.
SHARE CAPITAL
71. Issue and stock options. Subject to all provisions contained in the Articles of the Corporation limiting the allocation or issue of shares of the share capital of the Corporation, the directors may accept subscriptions for, allot, distribute, issue unissued shares of the Corporation in whole or in part, grant options thereon or otherwise dispose thereof to any person, enterprise, corporation, company or body corporate, upon the conditions and for the lawful consideration in compliance with the Articles of the Corporation determined by the directors, without any requirement to offer such unissued shares to persons who are already shareholders rateably to the shares held by them.
72. Share certificates and stock transfers. Certificates representing shares of the share capital of the Corporation shall bear the signature of both the Secretary and either the President or a Vice-President. Such signatures may be engraved, lithographed or otherwise mechanically
reproduced. Any certificate bearing the facsimile reproduction of the signatures of such authorized officers shall be deemed to have been manually signed by them and shall be as valid as if it had been so manually signed notwithstanding that the persons whose signatures are so reproduced shall have ceased to be officers of the Corporation.
73. Securities register. A central securities register shall be maintained by the Corporation or its agent at the registered office or at any other place in Canada designated by the Board of Directors. The Board of Directors may from time to time provide that one (1) or more branch securities registers be maintained at such places within Canada or elsewhere as may be designated by a resolution and may appoint officers or agents to maintain the same and to effect and record therein transfers of shares of the share capital of the Corporation.
74. Transfer agents and registrars. The agents of the Corporation charged with the maintenance of the central and/or branch securities registers may be designated as transfer agents and/or registrars of transfers, according to their functions. The Board of Directors may at any time terminate the appointment of such transfer agents and/or registrars.
75. Record date and closing of books. Subject to the provisions of the Act with respect to notification, the directors may fix in advance, by resolution, a date not exceeding fifty (50) days preceding the date for payment of a dividend or the date for the allotment of rights or the date when any change or conversion or exchange of shares of the capital stock of the Corporation shall go into effect as the record date for the determination of the shareholders entitled to receive payment of such dividend, the allotment of such rights or the exercise of such rights in respect of such change, conversion or exchange of the capital stock of the Corporation with the effect that only the shareholders of record on the date so fixed by the Board of Directors shall be entitled to receive payment of such dividend or allotment of rights or to exercise such rights, as the case may be, notwithstanding a transfer of any shares on the books of the Corporation after such record date.
76. Lost or destroyed certificates. The Board of Directors may, upon such terms and conditions as to indemnity and otherwise as they may deem advisable, direct that a new certificate or certificates of shares be issued to replace any certificate or certificates of shares theretofore issued by the Corporation that have been worn out, lost, stolen or destroyed. The Board of Directors, when authorizing the issue of such new certificate or certificates, may, in its discretion, and as a condition precedent thereto, require the owner of such worn-out, lost, stolen or destroyed certificate or his legal representatives to give to the Corporation and/or transfer agent or transfer agents and to such registrar or registrars, as may be authorized or required to countersign such new certificate or certificates a bond in such sum as they may direct, as indemnity against any claim that may be made against them or any of them for or in respect of the shares represented by such certificates alleged to have been-worn out, lost, stolen or destroyed.
DIVIDENDS
77. Dividends. The Board of Directors may, from time to time and in compliance with the law, declare and pay dividends to the shareholders, in accordance with their respective rights.
The Board of Directors may stipulate that a dividend be payable, in whole or in part, in Corporation stock.
A transfer of shares shall not effect assignment of the rights to the
dividends declared thereon so long as the transfer is not recorded. Where two
(2) or more persons are recorded as joint holders of one share, each of them may
give a valid receipt for any dividend payable or paid on such share.
FISCAL YEAR AND AUDIT
78. Fiscal year. The period for the fiscal year of the Corporation shall be determined by the Board of Directors.
79. Audit. The shareholders, at each annual general meeting, shall appoint an Auditor or auditors to hold office until the next annual general meeting or until the appointment of his or their successor or successors, unless he or they resign or his or their office becomes vacant. At least once in every fiscal year, such Auditor shall examine the accounts of the Corporation and the financial statements to be presented at the annual general meeting and shall report thereon to the shareholders. The remuneration of an Auditor may be fixed by the shareholders or by the Board of Directors, should the former so authorize.
The Auditor shall be independent of the Corporation, of its affiliates, or the directors or officers thereof, in accordance with the Act. The shareholders may remove the Auditor from office at any time at a special meeting. A vacancy created by the removal of the Auditor may be filled by the shareholders at the meeting at which the Auditor is removed or, if not so filled, may be filled by the Board of Directors. Any other vacancy which may occur shall be filled by the Board of Directors in accordance with section 166 of the Act.
The shareholders may decide not to appoint an Auditor for any fiscal year, by resolution receiving the unanimous consent of all the shareholders including those who otherwise are not qualified to vote. The resolution shall be valid only until the next annual meeting.
CORPORATE REPRESENTATION FOR CERTAIN PURPOSES
80. Declaration. The President, Chairman of the Board of Directors, any Vice-President, the General Manager or Managing Director, the Comptroller, the Secretary or the Treasurer or any one (1) of them or, if authorized by the Board of Directors, any other officer, official or person, shall be authorized and empowered to make answer for the Corporation to all writs, orders and interrogatories upon articulated facts issued out of any Court, to answer for and on behalf of the Corporation to any writ of attachment by way of garnishment in which the Corporation is garnishee, to make all affidavits and sworn declarations in connection therewith or in connection with any judicial proceedings to which the Corporation is a party, to make petitions for assignment of property, winding-up or receivership against any debtor of the Corporation, to attend and vote at all meetings of creditors of the Corporation's debtors and to grant proxies in connection therewith.
81. Representation at meetings. The President, Chairman of the Board of Directors, any Vice-President, the General Manager or Managing Director, the Comptroller, the Secretary or the Treasurer, or any one (1) of them or any other officer or person thereunto authorized by the Board of Directors shall represent the Corporation, attend and vote at any meeting of shareholders or members of any firm, company, body corporate or syndicate in which the Corporation holds shares or is otherwise interested, and any action taken and/or vote cast by them shall be deemed to be the act and/or vote of the Corporation.
Any two (2) of the following persons acting jointly, namely the President, the Chairman of the Board of Directors, any Vice-President, the General Manager or Managing Director, the Comptroller, the Secretary or the Treasurer shall moreover be empowered to authorize any person (whether an officer of the Corporation or not) to attend, vote and otherwise act at all meetings of shareholders or members of any firm, company, corporation or syndicate in which the Corporation holds shares or is otherwise interested, and for this purpose, such officers shall be authorized to execute and to deliver for and on behalf of the Corporation a proxy in such form and under such terms as such officers see fit, including therein, but without in any way limiting or restricting the generality of the foregoing, provision for the appointment of a substitute proxyholder and the revocation of all proxies given by the Corporation prior thereto with respect to any such meeting.
82. Signature of documents. Contracts, documents, written acts, including discharges and releases, requiring the signature of the Corporation may be validly signed by the President alone, or by any two of the following persons acting jointly, namely, any Vice-President, the General Manager or Managing Director, the Secretary and the Treasurer, and shall hence be binding on the Corporation. The Board of Directors may also designate any other person to sign and deliver on behalf of the Corporation, either alone or jointly with one (1) or several other persons, all contracts, documents and written acts, and such authorization may be given by resolution in general or specific terms.
83. Declarations in the Register. Declarations to be filed with the Inspector
General of Financial Institutions of Quebec in accordance with the Act
respecting the legal publicity of sole proprietorships, partnerships and legal
persons or with any competent authorities shall be signed by the President, any
director of the Corporation or any other person authorized for such purpose by
resolution of the Board of Directors. Any director having ceased to hold such
office as a result of his resignation, removal or otherwise shall be authorized
to sign on behalf of the Corporation and file an amending declaration and a Form
6 (Notice of Directors or Notice of change of Directors) to the effect that he
has ceased to be a director, from fifteen (15) days after the date of such
cessation, unless he receives proof that the Corporation has filed such a
declaration.
MISCELLANEOUS PROVISIONS
84. Conflict with the Articles. In the event of a conflict between the provisions of a by-law and those of the Articles, the latter shall prevail.
85. Amendments. The Board of Directors shall have the power to adopt, repeal or amend a by-law, but such measure shall apply only until the next annual general or special meeting of the shareholders. If such adoption, repeal or amendment is not confirmed or modified by Ordinary Resolution at such annual general or special meeting, it shall cease to be in force, but only as of that date. Any shareholder may, in accordance with section 137 of the Act, submit a proposal at an annual meeting that a by-law be adopted, amended or repealed.
/s/ Germain Lamonde _____________________________________ Germain Lamonde President and Chief Executive Officer |
[LOGO] EXHIBIT 3.3
Industry Canada Industrie Canada
FORM 7 FORMULE 7
Canada Business Loi canadienne sur les RESTATED ARTICLES OF STATUTS CONSTITUTIFS
Corporations Act societes par actions INCORPORATION MIS A JOUR
(SECTION 180) (ARTICLE 180)
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1- Name of corporation Denomination de la societe
EXFO Electro-Optical Engineering Inc./EXFO Ingenierie Electro-Optique inc.
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2- The place in Canada where the registered office is to be situated Lieu au Canada ou doit etre situe le siege social
Quebec City Metropolitan Area Region metropolitaine de Quebec
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3- The classes and any maximum number of shares that the Categories et tout nombre maximal d'actions que la
corporation is authorized to issue societe est autorisee a emettre
Schedule A attached hereto is incorporated herein L'annexe A ci-jointe fait partie integrante du present
by reference as if herein set forth at length. formulaire.
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4- Restrictions, if any, on share transfers Restrictions sur le transfert des actions, s'il y a lieu
None Aucune
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5- Number (or minimum and maximum number) of directors Nombre (ou nombre minimal et maximal) d'administrateurs
Schedule B attached hereto is incorporated herein L'annexe B ci-jointe fait partie integrante du present
by reference as if herein set forth at length. formulaire.
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6- Restrictions, if any, on business the corporation may carry on Limites imposees a l'activite commerciale de la
societe, s'il y a lieu
None Aucune
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7- Other provisions, if any Autres dispositions, s'il y a lieu
Schedule C attached hereto is incorporated herein L'annexe C ci-jointe fait partie integrante du present
by reference as if herein set forth at length. formulaire.
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The foregoing restated articles of incorporation correctly set Cette mise a jour des statuts constitutifs demontre
out, without substantive change, the corresponding provisions exactement, sans changement substantiel, les
of the articles of incorporation as amended and supersede dispositions correspondantes des statuts constitutifs
the original articles of incorporation. modifies qui remplacent les statuts constitutifs
originaux.
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Signature Date FOR DEPARTMENTAL USE ONLY-
D-J M Y-A A L'USAGE DU MINISTERE SEULEMENT
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Title-Titre Filed-Deposee
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SCHEDULE "A"
ANNEXE "A"
DESCRIPTION OF SHARE CAPITAL
The Corporation is authorized to issue an unlimited number of Subordinate Voting Shares, an unlimited number of Multiple Voting shares and an unlimited number of Preferred Shares issuable in series of which 800,000 Preferred Shares Series I are authorized for issuance, which shares shall carry the following rights, privileges, conditions and restrictions:
1. SUBORDINATE VOTING SHARES AND MULTIPLE VOTING SHARES
The Subordinate Voting Shares and the Multiple Voting Shares (collectively the "Equity Shares") include the following rights, privileges, conditions and restrictions:
1.1 DIVIDENDS
Each Subordinate Voting Share and each Multiple Voting Shares confers, subject to the rights of the holders of Preferred Shares, the right to receive such dividends as the Board of Directors of the Corporation may determine, but in an identical amount, at the same time and in the same form (whether in cash, kind or otherwise) as if such shares were of one and the same class.
1.2 SUBDIVISION OR CONSOLIDATION
No subdivision or consolidation of the Subordinate Voting Shares or the Multiple Voting Shares may be made unless, simultaneously, the Multiple Voting Shares or the Subordinate Voting Shares, as the case may be, are subdivided in the same manner and, in such case, the rights, privileges, conditions and restrictions then attached to the Subordinate Voting Shares and the Multiple Voting Shares will also be attached to the shares so subdivided or consolidated.
1.3 LIQUIDATION
In case of liquidation or dissolution of the Corporation or any other distribution of its assets among its shareholders for the purpose of winding up its business, whether or not in its own right, the holders of Subordinate Voting Shares and the holders of Multiple Voting Shares are entitled, subject to the rights of the holders of Preferred Shares, to share equally amongst themselves, on a share-for-share basis, the remaining property and assets of the Corporation available for distribution to its shareholders, without preference or distinction.
1.4 VOTE
The holders of Subordinate Voting Shares and the holders of Multiple Voting Shares have the right to receive notices of any meeting of the shareholders of the Corporation and to attend any such meeting and vote thereat as a single class in respect of any matter on which the shareholders of the Corporation are required to vote, except in the case of a meeting at which only the holders of shares of a
particular class or series are entitled to vote separately pursuant to the Canada Business Corporation Act (the "Act") or the articles of the Corporation. The Subordinate Voting Shares confer 1 vote per share and the Multiple Voting Shares confer 10 votes per share.
1.5 MULTIPLE VOTING SHARE CONVERSION PRIVILEGE
Each outstanding Multiple Voting Share may, at all times and at the option of the holder, be converted into one Subordinate Voting Share, in accordance with the following terms and conditions:
1.5.1 the conversion privilege set out in this subsection 1.5 shall
be exercised by means of a written notice given to the transfer
agent of the Corporation and accompanied by the certificate or
certificates representing the Multiple Voting Shares in respect
of which the holder wishes to avail itself of such privilege.
Such notice shall be signed by the holder of the Multiple
Voting Shares in respect of which such privilege is exercised
or by its duly authorized representative and shall indicate the
number of Multiple Voting Shares the holder wishes to convert.
The holder shall also pay all government taxes or other duties
or income taxes that may be imposed in respect of such
conversion. The conversion of the Multiple Voting Shares into
Subordinate Voting Shares shall take effect as of the receipt
by the transfer agent of the Corporation of the notice of
conversion and the certificate or certificates representing the
Multiple Voting Shares in respect of which the holder wishes to
avail itself of the said conversion privilege; and
1.5.2 upon receipt of such notice and the certificate or
certificates, the Corporation will issue or cause to be issued,
with effect on the date of such receipt, a certificate or
certificates representing the outstanding Subordinate Voting
Shares, in accordance with the terms and conditions describes
hereinabove, in favour of the holder of such Multiple Voting
Shares, which may not from such time exercise its rights as a
holder of Multiple Voting Shares. If less than the aggregate of
the Multiple Voting Shares represented by a certificate is to
be converted, the holder shall be entitled to receive a new
certificate for the Multiple Voting Shares represented by the
original certificate and not converted.
1.6 RANK
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Unless otherwise indicated in subsections 1.4 and 1.5, each Subordinate Voting Share and each Multiple Voting Share confer the same rights, are equal among themselves in all respects and will be treated by the Corporation as if they were shares of a single class.
1.7 ADDITIONAL ISSUANCE OF MULTIPLE VOTING SHARES
Save for Multiple Voting Shares issued pursuant to subsection 1.2, no Multiple Voting Share shall be issued unless such issuance has been approved by a special resolution of the holders of Subordinate Voting Shares at a special meeting of such holders convened for such purpose.
2. PREFERRED SHARES
The Preferred Shares carry the following rights, privileges, conditions and restrictions:
2.1 DIRECTORS' AUTHORITY TO ISSUE IN ONE OR MORE SERIES
The Board of Directors of the Corporation may issue the Preferred Shares at any time and from time to time in one or more series. Before the first shares of a particular series are issued, the Board of Directors of the Corporation shall fix the number of shares in such series and shall determine, subject to the limitations set out in these Articles of Amendment, the designation, rights, privileges, conditions and restrictions to be attached to the shares of such series including, without limiting or restricting the generality of the foregoing, the rate or rates, amount or method or methods of calculation of preferential dividends, whether cumulative, non-cumulative or partially cumulative, and whether such rate, amount or method of calculation shall be subject to change or adjustment in the future, the currency or currencies of payment, the date and place of payment thereof, and the date or dates from which such preferential dividends shall accrue, the redemption price and terms and conditions of redemption, if any, the rights of retraction, if any, and the prices and other terms and conditions of any rights of retraction and whether any additional rights of retraction may be provided to such holders in the future, the consideration and the terms and conditions of any purchase for cancellation, if any, and the terms and conditions of any share purchase plan or sinking fund with respect thereto, the conversion price and the terms and conditions of conversion, if any. Before the issue of the first shares of a series, the Board of Directors of the Corporation shall send to the director under the Act, Articles of Amendment containing a description of such series including the designation, rights, privileges, conditions and restrictions determined by the Board of Directors of the Corporation.
2.2 RANKING OF PREFERRED SHARES
The Preferred Shares of each series shall rank at par with the Preferred Shares of every other series with respect to priority in the payment of dividends, return of capital and in the distribution of assets of the Corporation in the event of the liquidation or dissolution of the Corporation or any other distribution of the assets of the Corporation among its shareholders for the purpose of winding-up its affairs, whether voluntary or involuntary. The Preferred Shares shall have priority over the Multiple Voting Shares and the Subordinate Voting Shares of the Corporation, with respect to priority in the payment of dividends, return of capital and the distribution of assets in the event of the liquidation or dissolution of the Corporation, or any other distribution of the assets of the Corporation among its shareholders for the purpose of winding-up its affairs, whether voluntary or involuntary. If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of Preferred Shares participate rateably in respect of accumulated dividends and return of capital.
2.3 PURCHASE FOR CANCELLATION
Subject to the provisions of the Act and the provisions attached to any particular series of Preferred Shares, Preferred Shares of any series, if so provided in the rights, privileges, conditions and restrictions attached to such series, may be purchased for cancellation or made subject to redemption at the option of the Corporation or the holder thereof, at such time and at such prices and upon such other terms and conditions as may be specified in the rights, privileges, conditions and restrictions attaching to the Preferred Shares of such series.
2.4 VOTING RIGHTS
Unless the Articles of Amendment otherwise provide with respect to the
creation and issue of a particular series of Preferred Shares, the
holders of Preferred Shares shall not be entitled to receive any
notice of or attend any meeting of shareholders of the Corporation and
shall not be entitled to vote at any such meeting; provided that at
any meeting of shareholders at which, notwithstanding the foregoing,
the holders of Preferred Shares are required or entitled by law to
vote separately as a class, each holder of Preferred Shares of any
series thereof shall be entitled to cast, in respect of each such
Preferred Share held, that number of votes which is equal to the
quotient obtained by dividing the stated capital account maintained
for all the outstanding Preferred Shares of such series by the number
of such outstanding Preferred Shares; provided that in respect of any
such consideration denominated in a currency other than Canadian, the
Board of Directors of the Corporation shall, for the purpose of this
Section 2.4, determine the appropriate conversion rate of such
currency to Canadian currency in effect on the date of issue and,
based on such rate, the Canadian dollar equivalent of such
consideration; and provided further that when such quotient is a
fraction or a whole number plus a fraction there shall be no right to
vote in respect of such fraction.
Any meeting of shareholders at which the holders of the Preferred Shares are required or entitled by law to vote separately as a class or a series shall, unless the Articles of the Corporation otherwise provide, be called and conducted in accordance with the by-laws of the Corporation; provided that no amendment to or repeal of the provisions of such by-laws made after the date of the first issue of any of the Preferred Shares by the Corporation shall be applicable to the calling and conduct of meetings of holders of the Preferred Shares voting separately as a class or as a series unless such amendment or repeal has been theretofore approved by ordinary resolution adopted by the holders of the Preferred Shares voting separately as a class.
3. PREFERRED SHARES SERIES 1
The first series of Preferred Shares shall consist of 800,000 shares and shall be designated as Preferred Shares Series 1 (the "Preferred Shares Series 1"). The rights, privileges, conditions and restrictions attaching to the Preferred Shares Series 1 are as follows:
3.1 DEFINITIONS
In these share conditions, the following words and phrases shall have the following meanings:
3.1.1 "Aggregate Redemption Price" means the product obtained by
multiplying the number of outstanding Preferred Shares Series 1
by the Redemption Price.
3.1.2 "Conversion Price" means the dollar amount per Subordinate
Voting Share in Canadian dollars determined by reference to the
stock market on which the greatest volume of trading of the
Subordinate Voting Shares occurred during the 10 days of stock
market activity preceding November 30, 2000, as follows:
(i) by averaging the closing prices of the Subordinate Voting
Shares for such 10 days of stock market activity preceding
November 30, 2000; or
(ii) if the Subordinate Voting Shares have been traded fewer
than 5 days of the 10 days of stock market activity
preceding November 30, 2000, by averaging the following
prices determined for each of those 10 days:
a) the closing price or, if the closing price is not
published, the average between the highest and the
lowest prices, for each day that there has been
trading; and
b) the average of the bid and ask prices for each day on
which there was no trading.
3.1.3 "Higher Rank" or " Equal Rank" and similar expressions, whether
used individually or collectively, shall mean the order of
priority of the shares of different classes or series as
regards the payment of dividends or the distribution of assets
in the event of the winding-up, dissolution or abandonment of
the business of the Corporation, whether or not voluntary, or
in the event of any other repayment of capital or distribution
of the assets of the Corporation among its shareholders for
purposes of winding up its affairs.
3.1.4 "Redemption Price" means, for each Preferred Share Series 1,
$1.00.
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3.2 VOTING RIGHTS
Subject to the Act, the holders of the Preferred Shares Series 1 shall not, as such, be entitled to receive notice of or to attend any meeting of the shareholders of the Corporation or to vote at any such meeting.
3.3 DIVIDENDS
The holders of the Preferred Shares Series 1 shall not be entitled to receive, any dividend nor be entitled to participate any further in the distribution or payment of profits or assets of the Corporation.
3.4 PURCHASE
Subject to the Act, the Corporation shall have the right at its option at any time and from time to time, pursuant to tenders received upon request therefor addressed to all holders of Preferred Shares Series 1, to purchase the whole or any part of the Preferred Shares Series 1 at the lowest price for which, in the opinion of the Board of Directors, such shares are obtainable, but not exceeding a sum equal to the Redemption Price for each issued and outstanding Preferred Shares Series 1, provided that if, in response to such invitation for tenders, 2 or more shareholders submit tenders at the same price and if such tenders are accepted by the Corporation, in whole or in part, then unless the Corporation accepts all such tenders in whole, the Corporation shall accept such tenders in proportion as nearly as may be to the number of shares offered in each such tender. From and after the date of such purchase, all Preferred Shares Series 1 so purchased shall be cancelled.
3.5 MANDATORY REDEMPTION
Subject to the Act, the Corporation shall have the right to redeem, on November 30, 2000 (the "Redemption Date"), all outstanding Preferred Shares Series 1 on payment to their holders of their Aggregate Redemption Price. The Corporation shall give to each registered holder of Preferred Shares Series 1 a written notice of redemption (the "Notice of Redemption") or send such notice by mail to the last known address of the holder. The Notice of Redemption shall inform the holders of Preferred Shares Series 1 of the redemption of their Preferred Shares Series 1 on the Redemption Date and shall be given no less than 5 days prior to the Redemption Date. Any holder may waive receipt of a Notice of Redemption. On the Redemption Date, the Preferred Shares Series 1 redeemed shall be cancelled automatically and their holders shall have the right, upon delivery to the Corporation at its principal office during its usual business hours of the certificate or certificates representing the Preferred Shares Series 1 so redeemed duly endorsed, to the payment of the Aggregate Redemption Price of their Preferred Shares Series 1 (less any taxes which must be deducted or withheld in respect thereof). Payment shall be made by cheque. At any time after the Notice of Redemption has been given, the Corporation shall be entitled to deposit the amount of the Aggregate Redemption Price of the Preferred Shares Series 1 (less any taxes which must be deducted or withheld in respect thereof) in one or more chartered banks or trust companies within Canada who shall have been named in the Notice of Redemption. Such deposits shall be made in one or more special trust accounts for the benefit of holders of Preferred Shares Series 1 redeemed, and the amounts owing to them shall be paid by such banks or trust companies upon remittance of the certificate or certificates representing the Preferred Shares Series 1 so redeemed duly endorsed. Once these deposits have been made, the Preferred Shares Series 1 shall be deemed to have been redeemed on the Redemption Date. After the Corporation has effected a deposit in the
aforementioned manner with respect to any of the Preferred Shares Series 1, as of the Redemption Date, holders of such shares shall not have any further rights as shareholders with respect to such shares and their rights shall be limited to the collection of the portion of the deposited amounts applicable to such shares, without interest (less any taxes which must be deducted or withheld in respect of said amount); any accrued interest on such deposits shall belong to the Corporation.
3.6 CONVERSION AT OPTION OF CORPORATION
On November 30, 2000 (the "Conversion Date"), the Corporation shall, if it has elected not to redeem the Preferred Shares Series 1, pursuant to Section 3.5 above, convert all outstanding Preferred Shares Series 1 into Subordinate Voting Shares. The number of Subordinate Voting Shares to which is entitled a holder of Preferred Shares Series 1 shall be equal to the result obtained by dividing the Aggregate Redemption Price of the Preferred Shares Series 1 held by such holder by the Conversion Price. No fractional Subordinate Voting Shares shall be issued upon the conversion of the Preferred Shares Series 1. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay a cash amount equal to such fraction multiplied by the then effective Conversion Price. On the Conversion Date, the Preferred Shares Series 1 converted shall be cancelled automatically and their holders shall have the right to receive, upon delivery to the Corporation at its principal office during its usual business hours of the certificate or certificates representing the Preferred Shares Series 1 so converted duly endorsed, a certificate or certificates representing the number of Subordinate Voting Shares resulting from the conversion of the Preferred Shares Series 1 together with the cash amount payable as a result of conversion into fractional Subordinate Voting Shares (less any taxes which must be deducted or withheld in respect thereof). Payment of cash amounts shall be made by cheque. The Corporation shall be entitled to deposit the certificates representing the number of Subordinate Voting Shares resulting from the conversion of the Preferred Shares Series 1 together with the cash amounts payable as a result of conversion into fractional Subordinate Voting Shares (less any taxes which must be deducted or withheld in respect thereof) in one or more trust companies within Canada who shall have been named in a written notice sent by mail by the Corporation to the last known address of each registered holder of Preferred Shares Series 1. Such deposits shall be made in one or more special trust accounts for the benefit of holders of Preferred Shares Series 1 converted, and the certificates representing the Subordinate Voting Shares to which they are entitled and the cash amounts owing to them shall be remitted by such trust companies upon remittance of the certificate or certificates representing the Preferred Shares Series 1 so converted duly endorsed. Once these deposits have been made, the Preferred Shares Series 1 shall be deemed to have been converted on the Conversion Date. After the Corporation has effected a deposit in the aforementioned manner with respect to any of the Preferred Shares Series 1, as of the Conversion Date, holders of such shares shall not have any further rights as holders of Preferred Shares Series 1 with respect to such shares; any accrued interest on the cash amount deposits shall belong to the Corporation.
3.7 DISTRIBUTION RIGHTS
In the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, the holders of the Preferred Shares Series 1 shall be entitled to receive, before any distribution or payment of any part of the assets of the Corporation among the holders of Multiple Voting Shares and Subordinate Voting Shares, an amount equal to the Redemption Price of their shares and no more.
3.8 VETO
No class of shares of an Equal Rank or of a Superior Rank with the Preferred Shares Series 1 may be created, and the provisions relating to the Preferred Shares Series 1 or relating to other classes of shares may not be modified so as to confer on such shares rights or privileges that are of Equal Rank or of Superior Rank to those attached to the Preferred Shares Series 1, unless such creation or modification has been approved by a special resolution of the holders of Preferred Shares Series 1 at a special meeting of such holders convened for such purpose.
3.9 INTERPRETATION
3.9.1 All amounts set forth in these presents are expressed in
Canadian dollars and all amounts required to be converted into
Canadian dollars shall be deemed to be converted into or from
Canadian dollars at the noon buying rate of the Federal Reserve
Bank of New York on the date as of which such conversion is
determined.
3.9.2 Notwithstanding any provision to the contrary set forth in
these presents, the payment of any sum of money may be made by
electronic transfer or by any other means which the Board of
Directors may approve, instead of being made by cheque. In such
an event, the payment of sums of money to holders of Preferred
Shares Series 1 shall be deemed to constitute payment and shall
release the Corporation from all its obligations with respect
to the payment of such sums, up to the amount represented
thereby, unless the payment is not honoured by the Corporation.
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SCHEDULE "B"
ANNEXE "B"
NUMBER (OR MINIMUM AND MAXIMUM NUMBER OF DIRECTORS)
The minimum number of directors shall be 3, and the maximum number of directors shall be 12. Moreover, directors shall be authorized to appoint one or more directors (in addition to the number of directors elected at the last annual meeting of shareholders) who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.
SCHEDULE "C"
ANNEXE "C"
OTHER PROVISIONS AUTRES DISPOSITIONS
1. Borrowing Power 1. Pouvoir d'emprunt
The directors may, when they deem expedient, Les administrateurs peuvent, lorsqu'ils le jugent
by way of ordinary resolution and without opportun, par voie de resolution ordinaire et
having to obtain authorization of the sans avoir a obtenir l'autorisation des
shareholders: actionnaires:
1.1 borrow money on the credit of the Corporation; 1.1 contracter des emprunts, compte tenu du
credit de la societe;
1.2 issue bonds or other securities of the 1.2 emettre des obligations ou autres valeurs
Corporation and give them in guarantee or sell de la societe et les donner en garantie ou
them for such prices and such sums as may be les vendre pour les prix et sommes juges
deemed expedient; convenables;
1.3 subject to Section 44 of the Canada Business 1.3 sous reserve de l'article 44 de la Loi
Corporation Act (R.S.C., 1985, c. C-44), give canadienne sur les societes par actions
a guarantee on behalf of the Corporation to (L.R.C. (1985), ch. C-44), garantir, au nom de
secure performance of an obligation of any la societe, l'execution d'une obligation a la
person; charge d'une autre personne;
1.4 mortgage, hypothecate, pledge or otherwise 1.4 grever d'une surete, notamment par hypotheque,
create a security interest in all or any tout ou partie des biens, presents ou futurs,
property of the Corporation, owned or de la societe, afin de garantir ses
subsequently acquired, to secure any obligations; et
obligation of the Corporation; and
1.5 delegate one or any of the foregoing powers to 1.5 deleguer un ou plusieurs des pouvoirs
a director, a committee of directors or an susmentionnes a un administrateur, a un comite
officer of the Corporation. d'administrateurs ou a un dirigeant de la
societe.
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EXHIBIT 4.1
LES ACTIONS REPRESENTEES PAR CE CERTIFICAT SONT CESSIBLES AUX THE SHARES REPRESENTED BY THIS CERTIFICATE ARE TRANSFERABLE
PRINCIPAUX BUREAUX DE COMPAGNIE TRUST CIBC MELLON A MONTREAL, AT THE PRINCIPAL OFFICES OF CIBC MELLON TRUST COMPANY IN
TORONTO ET VANCOUVER, CANADA, ET AU BUREAU DE CHASEMELLON MONTREAL, TORONTO AND VANCOUVER, CANADA, AND AT THE OFFICE OF
SHAREHOLDER SERVICES, L.L.C. A NEW YORK, E.-U. CHASEMELLON SHAREHOLDER SERVICES, L.L.C. IN NEW YORK, U.S.A.
__________________________________________________________________________________________________________________________________
0000000
NUMERO - NUMBER (LOGO EXFO) ELECTRO-OPTICAL ENGINEERING INC. (LOGO EXFO) ACTIONS SHARES
INGENIERIE ELECTRO-OPTIQUE INC.
CONSTITUEE AUX TERMES DE LA LOI CANADIENNE SUR LES SOCIETES PAR ACTIONS
INCORPORATED UNDER THE CANADA BUSINESS CORPORATIONS ACT
CE CERTIFICAT ATTESTE QUE - THIS CERTIFIES THAT
---------------------------
CUSIP 302043 10 4
---------------------------
est le detenteur immatricule de - is the registered holder of
ACTIONS AVEC DROIT DE VOTE SUBALTERNE SANS VALEUR AU PAIR OU FULLY PAID AND NON-ASSESSABLE SUBORDINATE VOTING SHARES
NOMINALE ET ENTIEREMENT LIBEREES DE WITHOUT NOMINAL OR PAR VALUE OF
(LOGO EXFO) ELECTRO-OPTICAL ENGINEERING INC.
INGENIERIE ELECTRO-OPTIQUE INC.
L'inscription du transfert des actions representees par ce Registration of the transfer of the shares
certificat ne peut etre faite que dans un registre de valeurs represented by this certificate may be made only in a
mobilieres de la Societe sur remise du present certificat securities register of the Corporation upon surrender of
dument endosse. this certificate properly endorsed.
Ce certificat n'est valide qu'apres avoir ete contresigne par This certificate is not valid until countersigned by
un agent des transferts et inscrit par un agent charge de la tenue a Transfer Agent and registered by a Registrar of the
des registres de la Societe. Corporation.
En foi de quoi, la Societe a fait signer ce certificat par ses In Witness Whereof, the Corporation has caused this
dirigeants dument autorises. certificate to be signed by its duly authorized officers.
Ce : LE PRESIDENT ET
This : CHEF DE LA DIRECTION,
CONTRESIGNE ET IMMATRICULE
COUNTERSIGNED AND REGISTERED Montreal /s/ Germain Lamonde
COMPAGNIE TRUST CIBC MELLON Toronto -------------------------------
CIBC MELLON TRUST COMPANY Vancouver PRESIDENT AND CHIEF
EXECUTIVE OFFICER
OU/OR
CHASEMELLON SHAREHOLDER New York LE SECRETAIRE,
SERVICES, L.L.C.
AGENTS DES TRANSFERTS ET AGENTS
CHARGES DE LA TENUE DES REGISTRES /s/ Kimberley Okell
TRANSFER AGENTS AND REGISTRARS -------------------------------
SECRETARY
PAR
BY
--------------------------------------------
REPRESENTANT AUTORISE - AUTHORIZED OFFICER
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INSTRUCTIONS: LA SIGNATURE DE L'ACTIONNAIRE AUX FINS DE CETTE CESSION DOIT CORRESPONDRE EXACTEMENT AU NOM INSCRIT AU RECTO DU
CERTIFICAT SANS AUCUN CHANGEMENT. LA SIGNATURE DEVRA ETRE GARANTIE PAR UNE BANQUE, UNE COMPAGNIE DE FIDUCIE OU UN MEMBRE D'UNE
BOURSE CANADIENNE DONT LA SIGNATURE EST CONNUE AU BUREAU DES TRANSFERTS.
La categorie ou la serie d'actions que ce certificat represente The class or series of shares represented by the certificate
est assortie de droits, privileges, conditions et restrictions et has rights, privileges, conditions and restrictions attached
la Societe fournira gratuitement a tout actionnaire qui en fera la thereto and the Corporation will furnish to a shareholder
demande le texte integral des droits, privileges, conditions et requesting same, and without change, a full copy of the text of
restrictions rattaches a chaque categorie dont l'emission est the rights, privileges, conditions and restrictions attached to
autorisee et, lorsque determines par les administrateurs, a each class authorized to be issued and to each series insofar
chaque serie et de l'autorisation donnee aux administrateurs as the same has been fixed by the directors, and the authority
de determiner les droits, privileges, conditions et restrictions of the directors to fix the rights, privileges, conditions and
des series suivantes. restrictions of subsequent series.
Pour valeur recue, le soussigne vend, cede et For value received, the undersigned hereby sells,
transporte, par les presentes, a assigns and transfers unto
____________________________________________________________________________________________________________________________________
(Nom et adresse du cessionnaire en lettres moulees ou a la machine - Please print or typewrite name and address of assignee)
____________________________________________________________________________________________________________________________________
LE NUMERO D'ASSURANCE SOCIALE, NUMERO D'IDENTITE DU CONTRIBUABLE DOIT ETRE FOURNI.
[__ __ __]-[__ __ __]-[__ __ __]
SOCIAL INSURANCE NUMBER, TAXPAYER IDENTIFYING NUMBER MUST BE PROVIDED.
actions
____________________________________________________________________________________________________________________________ shares
de la Societe representees par ce certificat et constitue par of the Corporation represented by the within certificate and
les presentes does hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
son mandataire irrevocable, avec faculte de se substituer the attorney or the undersigned to transfer the said shares on
toute autre personne, pour transferer ces actions dans les the books of the Corporation with full power or substitution in
livres de la Societe. the premises.
Date _____________________________________________________
Signature __________________________________________________________________________________________________________________________
Signature garantie par:
SIgnature guaranteed by: ______________________________________________________________________________________________________
INSTRUCTIONS: THE SIGNATURE OF THE SHAREHOLDER TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, THE SIGNATURE SHOULD BE GUARANTEED
BY A BANK OR BY A TRUST COMPANY, OR BY A MEMBER OF A CANADIAN STOCK EXCHANGE, WHOSE SIGNATURE IS KNOWN TO THE TRANSFER OFFICE.
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EXHIBIT 4.2
Form of Trust Agreement among EXFO Electro-Optical Engineering Inc., Germain Lamonde, GEXFO Investissements Technologiques inc., Fiducie Germain Lamonde and G. Lamonde Investissements Financiers inc.
THIS AGREEMENT made as of the [ ] day of __, 2000.
AMONG: GERMAIN LAMONDE, an individual residing in Cap-Rouge,
Province of Quebec,
(hereinafter called "GERMAIN LAMONDE")
- and -
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., a company
incorporated under the laws of the Province of Quebec,
(hereinafter called "GEXFO")
- and -
G. LAMONDE INVESTISSEMENTS FINANCIERS INC., a company
incorporated under the laws of the Province of Quebec,
(hereinafter called "INVESTISSEMENTS")
- and -
FIDUCIE GERMAIN LAMONDE, a family trust constituted
under the laws of the Province of Quebec,
(hereinafter called "TRUST LAMONDE")
(GERMAIN LAMONDE, GEXFO, INVESTISSEMENTS and TRUST
LAMONDE are collectively referred to as the
"SHAREHOLDERS")
- and -
EXFO ELECTRO-OPTICAL ENGINEERING INC., a corporation
incorporated under the laws of Canada,
(hereinafter called the "CORPORATION")
- and -
CIBC MELLON TRUST COMPANY, a trust company incorporated
under the laws of Canada,
(hereinafter called the "TRUSTEE")
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WHEREAS the Corporation has an authorized share capital consisting of an unlimited number of subordinate voting shares (the "SUBORDINATE VOTING SHARES"), an unlimited number of multiple voting shares (the "MULTIPLE VOTING SHARES") (the Subordinate Voting Shares and the Multiple Voting Shares are collectively referred to herein as the "EQUITY SHARES") and an unlimited number of Preferred Shares issuable in series;
WHEREAS the Corporation proposes to issue and sell 6,000,000 Subordinate Voting Shares pursuant to a prospectus dated __, 2000 (900,000 additional Subordinate Voting Shares if the over-allotment (the "Over-Allotment") granted by the Corporation to Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Dominion Securities Inc., Wit SoundView Corporation and CIBC World Markets Inc. is exercised in full (the "OFFERING");
WHEREAS on the closing date of this Offering (the "Closing Date") 38,000,000 Multiple Voting Shares, 6,709,605 Subordinate Voting Shares (7,609,605 Subordinate Voting Shares if the Over-Allotment option is exercised in full) and 800,000 Preferred Shares Series 1 will be issued and outstanding;
WHEREAS the Shareholders and the Corporation have agreed to enter into this Agreement in order to secure the listing of the Subordinate Voting Shares of the Corporation on The Toronto Stock Exchange and derive the benefits of such listings, and for the purpose of ensuring that the holders of the Subordinate Voting Shares will not be deprived of any rights under applicable take-over bid legislation to which they would have been entitled in the event of a take-over bid if the Multiple Voting Shares and the Subordinate Voting Shares were a single class of shares;
WHEREAS the Shareholders and the Corporation wish to constitute the Trustee as a trustee for the holders of the Subordinate Voting Shares all as contemplated hereby in order that such holders, through the Trustee, will benefit from the covenants of the Shareholders and the Corporation as contained in this Agreement;
WHEREAS, for the purpose of this Agreement, "LAMONDE FAMILY " means collectively (i) Germain Lamonde, (ii) his spouse, in fact or in law, (iii) any lineal descendant of Germain Lamonde, born or to be born, (iv) any trust constituted primarily for the benefit of Germain Lamonde, his spouse, in fact or in law, or any of his descendants, born or to be born, and (v) any corporation where 90% of the votes attaching to all outstanding shares and at least 50% of all outstanding shares are controlled by any one or more of such persons or trusts.
NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the promises and agreements herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Subject to the other provisions of this Agreement, the Shareholders being the holders of all the Multiple Voting Shares (the "MV SHAREHOLDERS" or, as the case may be, a "MV SHAREHOLDER") shall not sell nor dispose of, directly or indirectly, any Multiple Voting Shares pursuant to a take-over bid, as defined by applicable securities legislation, under circumstances in which securities legislation would have required the same offer or a follow-up offer to be made to all holders of Subordinate Voting Shares if the sale had been of Subordinate Voting Shares rather than Multiple Voting Shares, but otherwise on the same terms. For this purpose, it shall be assumed that the offer that would have resulted in such sale of Subordinate Voting Shares would have constituted a take-over bid under applicable securities legislation, regardless or whether this actually would have been the case. Should it be necessary to determine the value of Multiple Voting Shares to ascertain the applicability of any
exemption from take-over bid requirements for the purposes of the foregoing, the Multiple Voting Shares shall be deemed to have the same value as that which would be assigned by applicable securities legislation to the Subordinate Voting Shares under similar circumstances.
2. Section 1 shall not apply to prevent any sale or other disposition by any MV Shareholder of Multiple Voting Shares, if:
(a) such sale or other disposition is made pursuant to an offer to purchase part only of the Multiple Voting Shares made to all holders of Multiple Voting Shares, and an offer all the terms of which are at least as favourable as the terms of the offer to purchase the Multiple Voting Shares (in terms of price per share, percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the offeror, or associates or affiliates of the offeror, and in all other material respects) is made concurrently to all holders of Subordinate Voting Shares to purchase Subordinate Voting Shares, which offer is unconditional (other than the right not to take up and pay for shares tendered if no shares are purchased pursuant to the offer for Multiple Voting Shares); or
(b) there is a concurrent unconditional offer, all terms of which are as favourable as the terms of the offer to purchase the Multiple Voting Shares, to purchase all of the Subordinate Voting Shares at a price per share at least as high as the highest price per share offered pursuant to the said sale or other disposition of the Multiple Voting Shares referred to in (a) above; or
(c) such sale or disposition is a direct or indirect sale or other
disposition of shares of the Corporation, provided that (i) the sale
or other disposition is effected within the Lamonde Family at a price
which is within the margin prescribed by the Securities Act (Quebec),
(ii) the transferee is not a party to any agreement under which any
other person would directly or indirectly participate in the
beneficial ownership of, control or direction over more than 50% of
the votes attaching to the Equity Shares held by such transferee,
(iii) the sale is otherwise made in accordance with applicable law,
(iv) the prior written consent of the Trustee as contemplated by
Section 4 of this Agreement has been obtained, and (v) the transferee,
if not already a party to this Agreement, becomes a party to this
Agreement.
For the purposes of paragraphs (a) and (b) of this Section 2, the varying of any term of an offer shall be deemed to constitute the making of a new offer.
3. Without restricting the generality of the foregoing and in addition to any other provisions herein of similar effect, the MV Shareholders agree that the Multiple Voting Shares shall be automatically converted into Subordinate Voting Shares upon the occurrence of any of the following circumstances, namely: (A) members of the Lamonde Family (as defined in the preamble hereof) do not beneficially own, directly or indirectly, in any manner, a number of Equity Shares representing either (i) more than 50% of the votes attaching to all issued and outstanding Equity Shares or (ii) 60% of the total number of Multiple Voting Shares held by them on the closing date of this Offering (or 22,800,000 Multiple Voting Shares) or (B) Germain Lamonde no longer occupies the position of either Chairman of the Board or
Chief
Executive Officer of the Corporation, for any reason, including voluntary or forced retirement, death or incapacity (the "Occurrence"), unless such situation is remedied within 60 days from the Occurrence or, if the situation which gave rise to such Occurrence is the incapacity of Germain Lamonde, within 1 year from the Occurrence. The Trustee is hereby irrevocably instructed to convert the Multiple Voting Shares into Subordinate Voting Shares 60 days after the Occurrence, provided the situation which gave rise to such Occurrence has not been remedied within such 60-day period or, as the case may be, if the situation that gave rise to such Occurrence is the incapacity of Germain Lamonde, 1 year after the occurrence of such incapacity, provided the incapacity of Germain Lamonde has not ceased within such 1-year period.
In addition, if at any time, the Lamonde Family or any of its members sells or otherwise transfer Multiple Voting Shares to a party who is not a member of the Lamonde Family, such transferred shares shall be automatically converted on the date of such sale or transfer into Subordinate Voting Shares and the Trustee shall automatically convert those shares into Subordinate Voting Shares unless a certificate signed by the transferor and transferee confirming that the transferee is a member of the Lamonde Family is provided to the Trustee.
4. Notwithstanding any other provision contained herein, the prior written consent of the Trustee shall be required in connection with any sale or other disposition of Multiple Voting Shares, whether direct or indirect, by any MV Shareholder. Such consent shall be given no later than the next Business Day of receipt by the Trustee of evidence satisfactory to it, acting reasonably, to the effect that the sale or disposition is not in contravention of this Agreement. For the purposes of the foregoing, the Trustee shall be entitled to consider a legal opinion to be satisfactory evidence although no such opinion is necessarily required. The Trustee also has the right to require from time to time evidence satisfactory to it, acting reasonably, as to the number of Equity Shares beneficially owned directly or indirectly by the Lamonde Family or any MV Shareholder. For the purposes of this Agreement, "Business Days" means a day, other than a Saturday, Sunday or any other day on which the principal banks located in Quebec City are not open for business during normal banking hours. No consent shall be given in respect of any sale or disposition unless the Trustee receives the consent of the person or company requiring the shares to be bound hereby as an MV Shareholder.
5. Each MV Shareholder shall use its best efforts to prevent any person or company it controls from carrying out any direct or indirect sale or other disposition in contravention of the foregoing in respect of any Multiple Voting Shares owned from time to time by such MV Shareholder, or any person or company controlled, directly or indirectly by such MV Shareholder, regardless of whether such person or company is a party to this Agreement.
6. For greater certainty, any direct or indirect sale or other disposition which would result in the direct or indirect acquisition of beneficial ownership of Multiple Voting Shares or Subordinate Voting Shares, or in the direct or indirect acquisition of control or direction over such shares, shall be construed to be a sale or disposition of such Multiple Voting Shares or Subordinate Voting Shares, as the case may be, for the purposes of the foregoing.
7. No MV Shareholder or any corporation which it controls shall directly or indirectly sell or dispose of any Multiple Voting Shares unless the sale or disposition is conditional upon the
person, trust or company acquiring such Multiple Voting Shares becoming a party to this Agreement as a MV Shareholder.
8. Notwithstanding any other provision contained herein, the restrictions of the preceding provisions of this Agreement, subject to Section 11, shall not apply to the exercise by the holder of Multiple Voting Shares of any right of conversion into Subordinate Voting Shares attaching to the Multiple Voting Shares and the subsequent sale or disposition of the Subordinate Voting Shares issued upon such conversion.
9. Nothing in this Agreement shall prevent an MV Shareholder from granting, from time to time, directly or indirectly, a security interest, by way of pledge, hypothecation or otherwise, whether directly or indirectly, in Multiple Voting Shares to any financial institution with which it deals at arm's length (within the meaning of the Income Tax Act (Canada)) in connection with a bona fide borrowing provided that concurrent with the pledge, hypothecation or other granting of the security interest, the financial institution agrees in writing to become a party to and abide by the terms of this Agreement as if such financial institution were a MV Shareholder until such time as the pledge, hypothecation or other security interest has been released or the Multiple Voting Shares which were subject thereto have been sold or disposed of in accordance with the terms of this Agreement.
10. The Shareholders hereby agree to place on deposit with the Trustee, contemporaneously with the issuance of Subordinate Voting Shares to the public pursuant to the final prospectus of the Corporation dated __ , 2000, 38,000,000 Multiple Voting Shares which are represented by the certificates referred to in Schedule "A" hereto and hereby undertake and agree to deliver the share certificates representing such shares (including any replacement securities or certificates if and when such are issued or allotted) to the Trustee for safekeeping and to assure compliance with the terms and conditions hereof. It is understood, however, that the Trustee shall release from deposit such number of Multiple Voting Shares as are covered by any consent granted in accordance with the provisions of Section 4 save and except for transfers among members of the Lamonde Family.
11. If any person or company carries out an indirect sale or other disposition
contemplated in this Agreement in contravention of the terms hereof, the
person, trust, or company acquiring such shares shall not thereafter do any
of the following with respect to any of the Multiple Voting Shares so sold
or disposed or to those Subordinate Voting Shares resulting from the
conversion thereof: (a) directly or indirectly sell or dispose of them
without the prior written consent of the Trustee; or (b) exercise any
voting rights attaching to them except in accordance with the written
instructions of the Trustee. The Trustee may attach conditions to any
consent the Trustee gives in exercising its rights hereunder. The Trustee
shall exercise such rights in a manner that the Trustee considers to be:
(i) in the best interests of the holders of the Subordinate Voting Shares,
other than the Shareholders or any MV Shareholder who, in the opinion of
the Trustee, participated directly or indirectly in the transaction that
triggered the operation of this Section 11, (ii) in accordance with
applicable securities legislation, and (iii) consistent with the intentions
of the Shareholders and the Corporation in entering into this Agreement as
such intentions are set out in the preamble to this Agreement.
Notwithstanding a sale or disposition of shares which constitutes an
indirect sale or disposition of Multiple Voting Shares in contravention to
this Agreement, the Shareholders shall not, although remaining bound by the
restrictions and prohibitions of this Agreement,
have any liability for damages hereunder in respect of such sale or disposition, provided that the Shareholders are otherwise in compliance with all other provisions of this Agreement.
12. The Lamonde Family or any of its members shall send to the Trustee within 30 days of the end of each financial year a certificate signed by each member of the Lamonde Family confirming that (A) members of the Lamonde Family do beneficially own, directly or indirectly, in any manner, a number of Equity Shares representing either (i) more than 50% of the votes attaching to all issued and outstanding Equity Shares or (ii) 60 % of the total number of Multiple Voting Shares held by them on the closing date of the Offering (or 22,800,000 Multiple Voting Shares) and (B) Germain Lamonde still occupies the position of either Chairman of the Board or Chief Executive Officer of the Corporation. In addition, if and whenever the Trustee has reasonable cause to believe that any MV Shareholders or the Corporation may have breached, or may intend to breach, any provision of this Agreement, the Trustee shall make reasonable enquiry to determine whether such a breach has occurred or is intended, and if the Trustee thereupon determines that such is the case the Trustee shall forthwith deliver to the Corporation a notice stating that the Trustee has made such determination. The Trustee shall thereupon be entitled to take and, subject to Section 14, shall take such action as the Trustee considers necessary to enforce its rights under this Agreement on behalf of the holders of the Subordinate Voting Shares. Any action which the Trustee is entitled to take in such circumstances includes, without limitation, a refusal to consent to any sale or disposition of Multiple Voting Shares.
13. Subject to Section 14, if and whenever holders of not less than 10% (excluding any members of the Lamonde Family or any holders of Multiple Voting Shares) of the then outstanding Subordinate Voting Shares determine that any one of the MV Shareholders or the Corporation has breached, or intends to breach, any provision of this Agreement, such holders may require the Trustee to take action in connection with such failure by delivering to the Trustee a requisition in writing signed in one or more counterparts by such holders and setting forth the nature of the breach and requesting the Trustee to take action as provided for in this Agreement, and upon receipt by the Trustee of such a requisition the Trustee shall forthwith take such action or any other action that the Trustee considers necessary to enforce its rights under this Agreement on behalf of the holders of the Subordinate Voting Shares.
14. The obligation of the Trustee to take any action on behalf of the holders of the Subordinate Voting Shares shall be conditional upon the Trustee receiving from the Corporation or from one or more holders of Subordinate Voting Shares such indemnification as the Trustee may reasonably require in respect of any costs or expenses which it may incur in connection with any such action. The Corporation shall provide such indemnification to the Trustee if the Trustee has delivered to the Corporation the notice referred to in Section 12.
15. No holder of Subordinate Voting Shares (excluding any members of the Lamonde Family or any holders of Multiple Voting Shares) shall have the right, other than through the Trustee, to institute any action or proceeding or to exercise any other remedy for the purpose of enforcing any rights arising from this Agreement unless holders of Subordinate Voting Shares shall have requested in the manner specified in Section 13 that the Trustee act and shall have provided reasonable indemnity to the Trustee and the Trustee shall have failed to so act within 30 days after the provision of such indemnity. In such case, any holder of Subordinate Voting Shares shall be entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken. In such circumstances, the Corporation shall reimburse the reasonable costs of any action that may be taken in good faith by the holders of Subordinate Voting Shares in accordance with the provisions hereof.
16. The Corporation shall do all things necessary to facilitate the due performance of this Agreement including the fulfillment by the Shareholders of their obligations hereunder.
17. The Trustee may resign and be discharged from all further duties and liabilities hereunder, subject to Section 19, after giving 30 days' written notice to the Corporation and the Shareholders or such shorter notice as the Corporation and the Shareholders may accept as sufficient.
18. The Corporation may terminate the Trustee's mandate pursuant to this Agreement, after giving 30 days' written notice to the Trustee, should:
(a) any company into or with which the Trustee may be merged or consolidated or amalgamated, or any company succeeding to the trust business of the Trustee be unacceptable to the Corporation, acting reasonably; or
(b) the financial situation of the Trustee is such that, in the opinion of the Corporation, acting reasonably, it jeopardizes the Trustee's capability to perform its obligations under this Agreement; or
(c) the fees and expenses of the Trustee are, in the opinion of the Corporation, acting reasonably, not within the general practice of the industry.
In the event that the office of trustee becomes vacant, the Corporation shall forthwith appoint a new trustee which shall be a company licensed or authorized to carry on the business of a trust company in the Province of Quebec; failing such appointment, the Shareholders, the Trustee or any holder of Subordinate Voting Shares may apply to a judge of the Quebec Superior Court for the appointment of a new trustee. Upon any new appointment, the new trustee shall be vested with the same powers, rights, duties and responsibilities as it had been originally named herein as the trustee, but there shall be immediately executed, at the expense of the Corporation, all such instruments as may be, in the opinion of counsel to the Corporation, necessary or desirable to assure such vesting. Any resignation or termination of the Trustee shall not become effective until the successor party shall have executed an appropriate instrument accepting the appointment as the new trustee. Notwithstanding such resignation or termination, the Trustee shall continue to be indemnified in accordance with Section 19.
19.
(a) Each of the MV Shareholders and the Corporation, jointly but not jointly and severally, agree to indemnify and save harmless the Trustee from and against all claims, liabilities, losses, penalties, actions, suits, costs, expenses and disbursements (including legal and advisory fees and expenses) made against it by anyone, in the absence of negligence or fraud by the Trustee, its officers, directors and employees, by reason of the Trustee's compliance in good faith with the terms hereof. It is
understood that, as between the MV Shareholders and the Corporation, the party in default or alleged to be in default hereunder shall be responsible for such indemnification if it arises from its own default or alleged default. It is understood and agreed that this indemnification shall survive the termination or discharge of this agreement or resignation of the Trustee.
(b) The Trustee may employ or retain counsel, auditors, accountants, or other experts or advisors, whose qualifications give authority to any opinion or report made by them as it may reasonably require for the purpose of discharging its duties hereunder and shall not be responsible for any misconduct on the part of any of them. The Trustee may, if it is acting in good faith, rely on the accuracy of any such opinion or report.
(c) The Trustee shall have no responsibility, if it is acting in good faith, for the genuineness or validity or any securities, documents or other things deposited with it. In the exercise of its rights, duties and obligations hereunder, the Trustee may, if it is acting in good faith, rely as to the truth of the statements and the accuracy of the opinions expressed in any certificates or other documents provided to it.
20. The Corporation shall pay the reasonable fees and expenses of the Trustee in connection with the performance of the Trustee's obligations hereunder, including the reasonable fees and disbursements of counsel or other experts employed by the Trustee, but this Section 20 shall not require the Corporation to pay any fees or expenses in connection with any action taken by the Trustee pursuant to Section 12 if the Trustee has not delivered to the Corporation the notice referred to in Section 12 in respect of such action.
21. The Trustee hereby accepts the appointment as depositary and trustee for the holders from time to time of the Subordinate Voting Shares upon the terms and conditions herein set forth. Subject to the limitations contained herein, the Trustee shall act as a depositary and, in its capacity of trustee, shall be charged with simple administration in accordance with the provisions of the Civil Code of Quebec, it being understood that the Trustee shall not have, except as provided herein, any rights as a shareholder with respect to the Multiple Voting Shares such as, the right to vote and to receive dividend on such shares.
22. This Agreement shall not be amended, and no provision thereof shall be waived, except with (i) the consent of any stock exchange upon which the Subordinate Voting Shares are quoted and/or listed and any other applicable securities regulatory authorities and (ii) the approval of at least two-thirds of the votes cast by holders of Subordinate Voting Shares present or represented at a meeting duly called for the purpose of considering such amendment or waiver, and of at least one simple majority of the votes cast by holders of Subordinate Voting Shares, excluding any of the MV Shareholders and their respective affiliates and any persons who have an agreement to purchase Multiple Voting Shares on terms which would constitute a sale or disposition subject to Section 1, other than as permitted herein.
23. The provisions of this Agreement shall only come into effect contemporaneously with the issuance of Subordinate Voting Shares to the public pursuant to the final prospectus of the Corporation dated ___, 2000.
24. For purposes only of this Agreement and applicable securities legislation, all parties hereto shall be deemed to be residents of the Province of Quebec.
25. No provision of this Agreement shall limit the rights of any holders of Subordinate Voting Shares under applicable law.
26. The Shareholders represent and warrant to the Corporation and the Trustee that the information contained in the preamble hereto is true in all material respects.
27. Any notice or other communication made pursuant to or in connection with this Agreement shall be sufficiently given if it is in writing and, if mailed by prepaid first-class mail at any time other than during a general discontinuance of postal service due to strike, lock-out or otherwise, shall be deemed to have been received 5 Business Days after the post-marked date thereof, or if telexed or delivered by another form of recorded communication, shall be deemed to have been received on the next Business Day following dispatch, or if delivered by hand shall be deemed to have been received at the time it is delivered. Notices shall be addressed as follows:
if to a member of the Lamonde Family: Mr. Germain Lamonde
4310 du Cure-Drolet
Street Cap-Rouge, Quebec, G1Y 3H2
if to GEXFO: GEXFO Investissements
Technologiques inc.
465 Godin Avenue
Vanier, Quebec, G1M 3G7
Attention: Mr. Germain Lamonde
Telecopier: (418) 683-2170
if to Investissements: G. Lamonde Investissements
Financiers inc.
465 Godin Avenue
Vanier, Quebec, G1M 3G7
Attention: Mr. Germain Lamonde
Telecopier: (418) 683-2170
if to Trust Lamonde: Fiducie Germain Lamonde
465 Godin Avenue
Vanier, Quebec, G1M 3G7
Attention: Mr. Germain Lamonde
Telecopier: (418) 683-2170
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if to the Corporation: EXFO Electro-Optical Engineering inc.
465 Godin Avenue
Vanier, Quebec, G1M 3G7
Attention: Mr. Germain Lamonde
Telecopier: (418) 683-2170
if to the Trustee: CIBC Mellon Trust Company
2001 University Street
16th Street
Montreal, Quebec, H3A 2A6
Attention: Corporate Trust Department
Telecopier: (514) 285-3640
|
or such other address as the party to whom such notice or communication is to be given shall have last designated to the party giving the same in the manner specified in this Section 27.
28. The Shareholders jointly and solidarily release, indemnify and save harmless the Trustee from all costs, charges, claims, demands, damages, losses and expenses resulting from the Trustee's performance, in good faith and without negligence, of its duties under this Agreement. The Trustee shall not be liable for any error of judgment or for any act done or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or omit from doing in connection herewith, except its own negligence and willful misconduct.
The Trustee may seek the advice of legal counsel in the event of any questions or dispute as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such legal counsel. The Trustee shall be entitled to pay such legal counsel reasonable remuneration. The Trustee shall not be answerable for the default or misconduct of any agent or legal counsel employed or appointed, at its discretion, by it if such agent or legal counsel shall have been selected with reasonable care.
In the event of any disagreement between any of the parties to this Agreement, resulting in demands or adverse claims being made in connection with or for any Multiple Voting Shares, the Trustee shall be entitled to refuse to comply with any demands or claims on it, and in so refusing the Trustee may make no delivery or other disposition of any Multiple Voting Shares, and in so doing the Trustee shall not be or become liable in any way or to any person or party for its failure or refusal to comply with such conflicting demands or adverse claims until the rights of person or party shall have been finally adjudicated in a court assuming and having jurisdiction with respect to the Multiple Voting Shares or all differences shall have been adjusted by agreement and the Trustee shall have been notified thereof in writing signed by all persons and parties interested.
29. This Agreement shall be governed by and construed in accordance with the laws of the Province of Quebec. The terms "associate" and "affiliate" used herein shall include any person considered to be an affiliate for the purposes of the Canada Business Corporation Act. Reference herein to any applicable securities legislation means securities legislation of the Province of Quebec in effect at the relevant time, which shall be assumed to apply.
30. This Agreement shall ensure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns, as applicable.
31. This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument.
32. Time shall be of the essence of this Agreement.
33. Each party hereby irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Quebec in connection with any disputes which may result from, arise out of, or relate to this Agreement and may be brought in such courts. Each party hereby irrevocably waives (and irrevocably agrees not to raise) any objection which it may now or thereafter have to the laying of the venue of any proceedings in any such courts and any claim that any such proceedings have been brought in an inconvenient forum. Judgment in any such proceedings in such court shall be conclusive and binding upon the parties and may be enforced in courts of any other jurisdiction.
34. The parties hereto have required that this Agreement and all documents and notices related thereto and/or resulting therefrom be drawn up in the English language. Les parties aux presentes ont exige que la presente convention ainsi que tous les documents et avis qui s'y rattachent et/ou qui en decouleront soient rediges en langue anglaise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
Per: ________________________
Germain Lamonde
G. LAMONDE INVESTISSEMENTS FINANCIERS INC.
Per: ________________________
Germain Lamonde
FIDUCIE GERMAIN LAMONDE
Per: ________________________
Germain Lamonde
EXFO ELECTRO-OPTICAL ENGINEERING INC.
Per: ________________________
Pierre Plamondon
CIBC MELLON TRUST COMPANY
Per: ________________________
Per: ________________________
SCHEDULE "A"
MULTIPLE VOTING SHARES
OF THE CORPORATION
DEPOSITED WITH THE TRUSTEE
SHARE NUMBER OF MULTIPLE VOTING
CERTIFICATE SHARES
REGISTERED SHAREHOLDER NUMBER REPRESENTED
--------------------------------------------------------------------------------------------------------
GEXFO Investissements Technologiques inc. [ ] 35,340,000
Fiducie Germain Lamonde [ ] 1,900,000
G. Lamonde Investissements Financiers inc. [ ] 760,000
----------
TOTAL: 38,000,000
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EXHIBIT 5.1
June 9, 2000
EXFO Electro-Optical Engineering Inc./
EXFO Ingenierie Electro-Optique inc.
465 Godin Avenue
Vanier (Quebec)
Canada
G1M 3G7
Ladies and Gentlemen:
We have acted as Canadian counsel to the Company in connection with the authorization and issuance by EXFO of up to 6,000,000 subordinate voting shares of the Company together with an additional 900,000 subordinate voting shares, if and to the extent the underwriters exercise an over-allotment option granted by the Company (together, "Shares"), and the preparation and filing of a registration statement on Form F-1 ("Registration Statement") under the Securities Act of 1933, as amended ("Securities Act"), which the Company is filing with the Securities and Exchange Commission with respect to the Shares.
We have examined the Registration Statement and such documents and records of the Company and other documents as we have deemed necessary for the purpose of this opinion. We have assumed, with your permission and without independent investigation, (i) the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as photostatic or facsimile copies, and the authenticity of the originals of such copies, (ii) the accuracy of the factual representations made to us by officers and other representatives of the Company, whether evidenced by certificates or otherwise, (iii) the identity and capacity of all individuals acting or purporting to act as public officials, and (iv) that all actions contemplated by the Registration Statement have been and will be carried out only in the manner described therein.
Based upon the foregoing, we are of the opinion that upon the happening of the following events:
(a) the filing of the Registration Statement and any amendments thereto and the Registration Statement becoming effective; and
(b) the sale of the Shares and the receipt by the Company of an amount equal to the full consideration for the Shares as contemplated by the Registration Statement; and
(c) the due issuance by the Company and registration by its registrar of the Shares:
the Shares will be duly authorized, validly issued, fully paid and non-assessable.
In rendering this opinion we express no opinion as to the laws of any jurisdiction other than the laws of the Province of Quebec and the federal laws of Canada applicable therein.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus made part of the Registration Statement under the heading "Legal Matters". In giving such consent, we do not admit that we are "Experts" under the Securities Act.
Very truly yours,
/s/ Fasken Martineau DuMoulin LLP |
EXHIBIT 8.1
June 9, 2000
EXFO Electro-Optical Engineering Inc./
EXFO Ingenierie Electro-Optique inc.
465 Godin Avenue
Vanier (Quebec)
Canada
G1M 3G7
Ladies and Gentlemen:
We have acted as Canadian federal income tax counsel for EXFO Electro-Optical Engineering Inc./EXFO Ingenierie Electro-Optique inc. (the "Company") in connection with the offering (the "Offering") of 6,000,000 subordinate voting shares of the Company's share capital (the "Shares").
We are giving this opinion in connection with the Registration Statement on Form F-1, as amended (the "Registration Statement"), relating to the registration by the Company of the Shares to be offered in the Offering, filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations of the Commission promulgated thereunder. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Registration Statement.
In rendering our opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such agreements and other documents as we have deemed relevant and necessary and we have made such investigations of law as we have deemed appropriate as a basis for the opinion expressed below. In our examination, we have assumed the authenticity of original documents, the accuracy of copies and the genuineness of signatures. We understand and assume that (i) each such agreement represents the valid and binding obligation of the respective parties thereto, enforceable in accordance with its respective terms and the entire agreement between the parties with respect to the subject matter thereof, (ii) the parties to each agreement have complied, and will comply, with all of their respective covenants, agreements and undertakings contained therein and (iii) the transactions provided for by each agreement were and will be carried out in accordance with their terms.
Our opinion is based upon existing Canadian federal income tax laws, regulations, administrative pronouncements and judicial decisions. All such authorities are subject to change, either prospectively or retroactively, and any such change could affect our opinion.
The opinion set forth herein has no binding effect on the Canada Customs and Revenue Agency or the courts of Canada. No assurance can be given that, if the matter were contested, a court would agree with the opinion set forth herein.
We hereby confirm the opinion set forth under the caption "Tax Considerations - Canadian Federal Income Tax Considerations" in the Registration Statement. While such description discusses the material anticipated Canadian federal income tax consequences applicable to certain U.S. Holders, it does not purport to discuss all Canadian federal income tax consequences and our opinion is limited to those Canadian federal income tax consequences specifically discussed therein.
In giving the foregoing opinion, we express no opinion other than as to the federal income tax laws of Canada.
We are furnishing this letter in our capacity as Canadian federal income tax counsel to the Company for the purposes of the Registration Statement only. This letter is not to be used, circulated, quoted or otherwise referred to for any other purpose, except as set forth below.
We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and we further consent to the use of our name under the captions "Tax Considerations - Canadian Federal Income Tax Considerations" and "Legal Matters" in the Registration Statement. The issuance of such a consent does not concede that we are an "expert" for purposes of the Securities Act.
Very truly yours,
/s/ Fasken Martineau DuMoulin LLP |
Exhibit 8.2
June 9, 2000
EXFO Electro-Optical Engineering Inc./
EXFO Ingenierie Electro-Optique Inc.
465 Godin Avenue
Vanier, Quebec
Canada, G1M 3G7
Ladies and Gentlemen:
We have acted as United States federal income tax counsel for EXFO Electro-Optical Engineering Inc./EXFO Ingenierie Electro-Optique Inc. (the "Company") in connection with the offering (the "Offering") of 6,000,000 subordinate voting shares of the Company's capital stock (the "Shares").
We are giving this opinion in connection with the Registration Statement on Form F-1, as amended (the "Registration Statement"), relating to the registration by the Company of the Shares to be offered in the Offering, filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations of the Commission promulgated thereunder. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Registration Statement.
In rendering our opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such agreements and other documents as we have deemed relevant and necessary and we have made such investigations of law as we have deemed appropriate as a basis for the opinion expressed below. In our examination, we have assumed the authenticity of original documents, the accuracy of copies and the genuineness of signatures. We understand and assume that each such agreement represents the valid and binding obligation of the respective parties thereto, enforceable in accordance with its respective terms and
the entire agreement between the parties with respect to the subject matter thereof, (ii) the parties to each agreement have complied, and will comply, with all of their respective covenants, agreements and undertakings contained therein and (iii) the transactions provided for by each agreement were and will be carried out in accordance with their terms.
Our opinion is based upon existing United States federal income tax laws, regulations, administrative pronouncements and judicial decisions. All such authorities are subject to change, either prospectively or retroactively, and any such change could affect our opinion.
The opinion set forth herein has no binding effect on the United States Internal Revenue Service or the courts of the United States. No assurance can be given that, if the matter were contested, a court would agree with the opinion set forth herein.
We hereby confirm the opinion set forth under the caption "Tax Considerations - United States Taxation" in the Registration Statement. While such description discusses the material anticipated United States federal income tax consequences applicable to certain U.S. Holders, it does not purport to discuss all United States federal income tax consequences and our opinion is limited to those United States federal income tax consequences specifically discussed therein.
In giving the foregoing opinion, we express no opinion other than as to the federal income tax laws of the United States of America.
We are furnishing this letter in our capacity as United States federal income tax counsel to the Company. This letter is not to be used, circulated, quoted or otherwise referred to for any other purpose, except as set forth below.
We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and we further consent to the use of our name under the captions "Tax Considerations - United States Taxation" and "Legal Matters" in the Registration Statement. The issuance of such a consent does not concede that we are an "expert" for purposes of the Securities Act.
Very truly yours,
/s/ PAUL, WEISS, RIFKIND, WHARTON & GARRISON |
EXHIBIT 10.1
Summary in English
Credit Agreement, dated July 6, 1995, among EXFO Electro-Optical Engineering Inc., National Bank of Canada and Banque Nationale de Paris (Canada), as amended on December 22, 1999 and March 28, 2000
Parties: EXFO Electro-Optical Engineering Inc. ("EXFO"),
National Bank of Canada ("National Bank") and Banque
Nationale de Paris (Canada) following the assignment by
Societe Generale (Canada) of its rights, interests and
obligations under the Credit Agreement to Banque
Nationale de Paris (Canada) ("BNP") on December 22,
1999.
Term: 2 year term, renewable annually. On March 28, 2000,
National Bank issued a renewal letter which stipulates
that the renewal is executed without novation and all
the rights, hypothecs, surety, recourses and ranks
resulting from the Credit Agreement as amended on
December 22, 1999, remain applicable and in force. The
renewal letter dated March 28, 2000, was signed by EXFO
on April 3, 2000.
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In connection with the Credit Agreement executed on July 6, 1995, National Bank, Societe Generale (Canada) and EXFO have entered into (i) a General Security Agreement, (ii) a General Assignment of Book Debts and (iii) a Security Agreemement. Societe Generale (Canada) assigned its rights and obligations under these three agreements to BNP.
Credit Facilities:
- $10,000,000 line of credit. This line of credit is limited to 90% of the Canadian and US insured accounts receivable and 75% of the Canadian and US accounts receivable not insured and is payable at the prime rate of the National Bank.
- $3,000,000 revolving term credit for the acquisition of companies or assets related to the same activities as EXFO convertible into loan for 1 to 5 year term with residual amortizement of 7 years or, in the case of immovable, 13 years. This line of credit is limited to 80% of the cost of the assets or 75% in the case of immovables and is payable at the prime rate of National Bank plus 1/2 %. The prior approval of the National Bank is required for any acquisition exceeding $500,000.
- Pursuant to the renewal letter dated March 28, 2000, the terms and conditions of the $10,000,000 line of credit and of the $3,000,000 revolving term credit can be revised periodically by National Bank, the first revision being scheduled for December 31, 2000.
Conditions:
- Conformity with environment legislation.
- Cash flow ratio 1,25/1.
- Long term debt on equity ratio 1,75/1.
- Minimum equity of 5,000,000.
Covenants of EXFO:
- Maintain its corporate existence.
- No amalgamation or consolidation with any other corporation.
- Comply with applicable laws, orders, instructions and licenses.
- No change to its fiscal year.
- No creation of any subsidiaries.
Events of default:
- Insolvency, bankruptcy, winding-up or filing of a proposal to its creditors.
- Default to pay any amount due to another financial institution.
- Default to reimburse any amount due to the lenders or to any one of them.
- Seizure of any secured assets.
- Failure to pay any debt exceeding $200,000.
- Failure to comply with any obligations provided for in the credit agreement or any security agreement.
- Constitution of any legal hypothec.
- Major event affecting materially the financial position of EXFO.
Commercial letter of credits:
Commercial letter of credits can be issued by National Bank upon demand presented by EXFO. Said letters of credit, when paid, become advances made to EXFO and should bear interest at the rate stipulated in the Credit Agreement entered into on July 6, 1995.
Financial arrangements for the stock acquisition plan:
Credit available for the employees of EXFO in order to acquire shares of the share capital of EXFO is in the total amount of $300,000. For each financial arrangement entered into with an employee of EXFO, EXFO must guarantee the obligations of said employee towards National Bank.
Risks related to the exchange rates of currencies:
Within the operation line of credit, the amount reserved in order to cover the risks related to the variation of the exchange rates of currencies is in the total amount of $1,000,000.
Credit card Master Card:
Line of credit is in the total amount of $350,000.
In order to secure the credit facilities, EXFO has granted to the lenders:
- a guarantee according to section 427 of the Bank's Act.
- an Hypothec on the universality of stocks and accounts receivable of
EXFO.
- an Hypothec on the universality of EXFO's assets, movables and immovables, present and future.
- a General Assignment of Book Debts registered in Ontario and covering the universality of stocks and accounts receivables, present and future, of EXFO.
- a General Security Agreement registered in Ontario and covering the universality of EXFO's movables properties, present and future.
- a Security Agreement in conformity with the Uniform Commercial Code registered in the USA and covering the universality of the accounts receivables of EXFO - USA.
- pursuant to the renewal letter dated March 28, 2000, a suretyship in the amount of $1,000,000 from Nortech Fibronic Inc.
- pursuant to the renewal letter dated March 28, 2000, an Hypothec of first rank on the universality of stocks and accounts receivables of Nortech Fibronic Inc. for a total amount of $1,000,000.
6 juillet 1995
CONVENTION DE CREDIT
ENTRE
BANQUE NATIONALE DU CANADA
a titre de Preteur et d'Agent
ET
SOCIETE GENERALE (CANADA)
a titre de Preteur
et
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
a titre d'Emprunteur
Credits totalisant 13 000 000 $
1. INTERPRETATION............................................................2
1.1 Definitions.....................................................2
1.2 Termes comptables...............................................6
1.3 Titres..........................................................6
1.4 Loi applicable..................................................6
1.5 Calcul des delais...............................................6
1.6 Annexes.........................................................7
1.7 Primaute de cette convention....................................7
2. LES CREDITS...............................................................7
2.1 Description des credits.........................................7
2.2 Limite particuliere applicable au Credit A......................7
2.3 But des credits.................................................7
2.4 Mode d'utilisation..............................................8
2.5 Montants d'utilisation..........................................9
2.6 Utilisation proportionnelle.....................................9
2.7 Reutilisation du Credit A et du Credit B.......................10
2.8 Conditions prealables a la mise a la disposition
des credits de l'emprunteur....................................10
2.9 Conditions prealables a chaque utilisation.....................11
2.10 Au cas de non-disponibilite....................................11
3. DISPOSITIONS PARTICULIERES AUX AVANCES A TAUX FIXE.......................12
3.1 Mecanisme......................................................12
3.2 Demande d'utilisation..........................................12
3.3 Disponibilite des fonds........................................12
3.4 Periodes et montants...........................................12
3.5 Taux...........................................................12
4. DISPOSITIONS PARTICULIERES AUX AVANCES A TAUX LIBOR......................13
4.1 Mecanisme......................................................13
4.2 Demande d'utilisation..........................................13
4.3 Disponibilite des fonds........................................13
4.4 Periodes et montants...........................................13
4.5 Taux...........................................................13
4.6 Paiement de l'interet..........................................14
4.7 Traitement a echeance..........................................14
5. AVANCES PAR ACCEPTATIONS DE BANQUE.......................................14
5.1 Mecanisme......................................................14
5.2 Demande d'utilisation..........................................14
5.3 Conditions d'utilisation.......................................14
5.4 Formules d'Acceptation de Banque et taux
d'escompte.....................................................15
5.5 Procuration....................................................15
5.6 Produit de l'acceptation de Banque.............................15
5.7 Debit du compte d'operation a l'echeance.......................15
5.8 Montant non recouvre...........................................15
5.9 Acquisition par les Preteurs...................................15
5.10 Renonciation...................................................15
6. LETTRES DE GARANTIE ET LETTRES DE CREDIT COMMERCIAL......................16
6.1 Mecanisme......................................................16
6.2 Partage de risques et de commissions...........................16
6.3 Frais et commissions...........................................16
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7. CONTRATS DE CHANGE ......................................... 16
7.1 Mecanisme ............................................ 16
7.2 Frais et commissions ................................. 16
8. HONORAIRES D'ATTENTE ....................................... 16
8.1 Modalites ............................................ 16
9. INTERET .................................................... 17
9.1 Choix repute ......................................... 17
9.2 Avance a taux US ..................................... 17
9.3 Avance a taux fixe ................................... 17
9.4 Calcul de l'interet .................................. 17
9.5 Paiement de l'interet ................................ 17
9.6 Interet sur arrerages ................................ 17
9.7 Ecart sur taux de change US .......................... 18
10. REMBOURSEMENTS ET REDUCTION DES MONTANTS DISPONIBLES ....... 18
10.1 Remboursement du Credit A ............................ 18
10.2 Remboursement du Credit B ............................ 18
10.3 Remboursement du Credit C ............................ 18
10.4 Remboursement par anticipation du Credit C ........... 18
11. LIEU DE PAIEMENT ........................................... 19
12. DECLARATIONS ............................................... 19
12.1 Pouvoirs ............................................. 19
12.2 Schema corporatif .................................... 19
12.3 Filiales ............................................. 19
12.4 Exercice financier ................................... 19
12.5 Situation financiere ................................. 19
12.6 Defauts .............................................. 19
12.7 Litiges .............................................. 20
12.8 Titres de propriete .................................. 20
12.9 Assurances ........................................... 20
12.10 Taxes ................................................ 20
12.11 Environnement ........................................ 20
12.12 Places d'affaires .................................... 21
13. ENGAGEMENTS DE L'EMPRUNTEUR ................................ 21
13.1 Poursuite de l'entreprise ............................ 21
13.2 Fonds de roulement ................................... 22
13.3 Ratio d'Endettement .................................. 22
13.4 Etats financiers, certificats et documents ........... 22
13.5 Utilisation des Credits aux fins prevues ............. 23
13.6 Livres comptables .................................... 23
13.7 Renseignements ....................................... 23
13.8 Assurances ........................................... 23
13.9 Environnement ........................................ 24
13.10 Indemnisation en matiere d'environnement ............. 24
13.11 Assurance-vie ........................................ 25
13.12 Documents additionnels ............................... 25
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14. DEFAUTS.................................................... 25
14.1 Cas de default................................... 25
14.2 Recours au cas de defaut......................... 27
14.3 Emploi des sommes percues........................ 27
15. DISPOSITIONS DIVERSES...................................... 28
15.1 Registres et determination....................... 28
15.2 Debits........................................... 28
15.3 Prohibition de cession........................... 28
15.4 Participations................................... 28
15.5 Frais............................................ 28
15.6 Absence de renonciation.......................... 28
15.7 Jour non ouvrable................................ 29
15.8 Indemnisation.................................... 29
16. L'AGENT.................................................... 30
16.1 Nomination et autorite de l'Agent................ 30
16.2 Administration des Credits....................... 30
16.3 Faits tenus pour averes.......................... 30
16.4 Exoneration de l'Agent........................... 30
16.5 Mandat........................................... 31
16.6 Indemnisation.................................... 31
16.7 Declaration des Preteurs......................... 31
16.8 Transactions de l'Agent.......................... 31
16.9 Remplacement de l'Agent.......................... 32
16.10 Modifications.................................... 32
16.11 Presomption de paiement.......................... 32
16.12 Presomption de prestation........................ 32
17. MODALITES ENTRE LES PRETEURS............................... 33
17.1 Rang des suretes................................. 33
17.2 Concertation..................................... 33
17.3 Au cas de desaccord.............................. 33
18. AVIS....................................................... 33
18.1 Envoi............................................ 33
18.2 Reception........................................ 33
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19. PERENNITE DES SURETES...................................... 34
20. DOCUMENTS ADDITIONNELS..................................... 34
CONVENTION DE CREDIT intervenue a Sainte-Foy le 6 eime jour de juillet 1995.
ENTRE: BANQUE NATIONALE DU CANADA ("BNC"), personne morale regie par la Loi sur les banques, ayant son siege a Montreal et une place d'affaires au 5800, boul. des Galeries, bureau 200, Quebec, G2K 2K7, ici representee par monsieur Gilles Martin, directeur de comptes, et monsieur Pierre Dubreuil, direceteur principal, service de la syndication (Canada), dument autorises ainsi qu'ils le declarent;
ET: SOCIETE GENERALE (CANADA)("SGC"), personne morale regie par la Loi sur les banques, ayant son siege a Montreal et une place d'affaires au 401, Grande-Allee Est, Quebec, GIR 2J5, ici representee par monsieur Jean-Claude Pepin, vice-president/Quebec, et monsieur Gaetan Gauthier, directeur de comptes, dument autorises ainsi qu'ils le declarent,
ET: INGENIERIE ELECTRO-OPTIQUE EXFO INC. (l'"Emprunteur"), personne morale constituee en vertu de la Loi sur les societes par actions de regime federal, ayant son siege au 465, avenue Godin, Vanier (Quebec), G1M 3G7, ici representee par monsieur Germain Lamonde, president, et monsieur Robert Tremblay, secretaire-tresorier, dument autorises en vertu d'une resolution des administrateurs adoptee en date de ce jour.
APRES AVOIR PREALABLEMENT RAPPELE:
QU'en vertu d'une lettre d'offre de financement de BNC datee du 11 mai 1995 et acceptee par l'Emprunteur le 29 mai 1995 (la "Lettre d'Offre"), BNC a offert, conjointement avec une autre institution financiere a etre alors determinee, d'avancer des fonds a l'Emprunteur sous forme de marge de credit d'exploitation jusqu'a hauteur de dix millions de dollars (10 000 000,00$) et sous forme de credit special "Evergreen" jusqu a hauteur de trois millions de dollars (3 000 000,00$) suivant les modalites generales enoncees a la Lettre d'Offre;
QUE BNC a conclu une entente avec SGC en vertu de laquelle cette derniere devient co-preteur avec elle; et
QUE cette convention vise a constater les engagements reciproques des Preteurs et de l'Emprunteur a l'egard des Credits et a expliciter les conditions et les modalites de ces engagements, de facon a ce que la Lettre d'Offre soit remplacee par cette convention pour tout ce qui se rapporte aux Credits, sans cependant affecter la validite des obligations deja executees en vertu de la Lettre d'Offre;
LES PRETEURS ET L'EMPRUNTEUR CONVIENNENT DE CE QUI SUIT:
1.- INTERPRETATION
1.1 Definitions
Outre les mots et les expressions definis dans d'autres dispositions de cette convention, les mots et expressions qui suivent, lorsqu'utilises dans cette convention ou lorsqu'il faut y referer pour l'interpretation de cette convention, ont la signification suivante, a moins d'incompatibilite avec le contexte:
1.1.1 "Acceptation de Banque" signifie une acceptation de banque
souscrite par l'Emprunteur sur la formule en usage chez un
Preteur et acceptee par ce Preteur;
1.1.2 "Agent" signifie BNC ou toute autre institution financiere nommee
agent aux termes de l'article 16 de cette convention;
1.1.3 "Avance" signifie, selon le contexte, une, plusieurs ou
l'ensemble des tranches de l'un ou l'autre ou de l'ensemble des
Credits;
1.1.4 "Avance a Taux de Base" signifie une Avance en Dollars Canadiens
portant interet au Taux de Base
1.1.4.1 sans majoration dans le cas d'une Avance en vertu du
Credit A,
1.1.4.2 majore de 1/2% dans le cas d'une Avance en vertu du
Credit B,
1.1.4.3 majore de 3/4% dans le cas d'une Avance en vertu du
Credit C.
1.1.5 "Avance a Taux Fixe" signifie une Avance en Dollars Canadiens
portant interet pendant la periode de cette Avance au Cout des
Fonds majore de 2%;
1.1.6 "Avance a Taux LIBOR" signifie une Avance en Dollars Americains
portant interet a Taux LIBOR
1.1.6.1 majore de 1% dans le cas d'une Avance en vertu du
Credit A,
1.1.6.2 majore de 1-1/2% dans le cas d'une Avance en vertu du
Credit B.
1.1.7 "Avance a Taux de Base US" signifie une Avance en Dollars
Americains portant interet au Taux de Base US
1.1.7.1 sans majoration dans le cas d'une Avance en vertu du
Credit A,
1.1.7.2 majore de 1/2% dans le cas d'une Avance en vertu du
Credit B.
1.1.8 "Avance par Acceptation de Banque" signifie une Avance en faite
sous forme d'Acceptation de Banque;
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1.1.9 "Avoir des Actionnaires" signifie la somme (i) du capital verse a
l'egard des actions emises, payees et en circulation de l'Emprunteur et
(ii) des benefices non repartis de l'Emprunteur et (iii) du montant des
Dettes Subordonnees de l'Emprunteur; sont exclus du montant de l'Avoir
des Actionnaires (a) le montant de toute subvention (mais sans exclure
le montant de toute telle subvention d'autres postes du bilan, tels les
benefices non repartis et, ou le cas echeant, du cout des biens acquis
en tout ou en partie au moyen de telle subvention) recue par
l'Emprunteur et (b) tout impot reporte, tout element resultant d'une
reevaluation d'actifs et (c) tout actif intangible et (d) tout Compte
Inter-Compagnie;
1.1.10 "Compte de Contrepartie" signifie le montant d'un compte a recevoir
par une personne d'un tiers a concurrence duquel ce tiers, a titre de
creancier de cette personne, peut opposer compensation;
1.1.11 "Comptes a Recevoir Nets" signifie les comptes a recevoir greves en
vertu des Suretes a l'exclusion:
i) des Comptes Inter-Campagnies;
ii) des Comptes de Contrepartie;
iii) des comptes a recevoir de 90 jours et plus qui ne sont pas
garantis par credit documentaire irrevocable; et
iv) des comptes de qualite douteuse suivant l'appreciation raisonnable
qui en est faite par l'Agent;
1.1.12 "Comptes a Recevoir Nets Assures" signifie les Comptes a Recevoir Nets
canadiens ou americains couverts par une assurance consentie par la
Societe pour l'Expansion des Exportations ou par tout autre assureur
acceptable aux Preteurs;
1.1.13 "Compte Inter-Compagnies" signifie un compte du a l'Emprunteur par une
filiale de l'Emprunteur ou par une personne ayant des liens avec
l'Emprunteur ou, selon le cas, avec Exfo USA;
1.1.14 "Cout des Fonds" signifie le cout des fonds pour chaque Preteur, pour
se procurer des Dollars Canadiens, pour une periode donnee, incluant
les reserves (de base, supplementaires et d'urgence) exigees de temps a
autre par les dispositions legislatives ou reglementaires regissant
les banques, ainsi que le cout de l'assurance-depot requise de temps a
autre en vertu des reglements et des lois applicables, le tout tel
qu'etabli unilateralement par les responsables du service du marche
monetaire de chaque Preteur;
1.1.15 "Creance Prioritaire" signifie toute creance dont le remboursement, de
par la loi, a priorite ou prend rang anterieur au remboursement des
creances des Preteurs en vertu des Credits;
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1.1.16 "Credit A" signifie la marge de credit prevue au sous-paragraphe 2.1.1
de cette convention;
1.1.17 "Credit B" signifie le credit rotatif "Evergreen" prevu au
sous-paragraphe 2.1.2 de cette convention;
1.1.18 "Credit C" signifie le pret a terme resultant de la conversion du
Credit B en pret a terme de la facon prevue au sous-paragraphe 2.1.3
de cette convention;
1.1.19 "Date de Conversion": signifie la date, pendant la Periode de
Conversion, a laquelle l'Emprunteur se prevaut du droit de conversion
prevu a l'article 10.2 de cette convention;
1.1.20 "Date de Disponibilite" signifie la date a laquelle les conditions
prealables mentionnees au paragraphe 2.8 ont ete rencontrees a
l'entiere satisfaction des Preteurs;
1.1.21 "Date de Revision" signifie le 31 decembre de chaque annee a compter
et incluant 1996;
1.1.22 "Defaut" signifie un defaut au sens de l'article 14;
1.1.23 "Demande d'Utilisation" signifie une demande transmise par
l'Emprunteur avant 10H00 A.M., essentiellement conforme a l'Annexe
1.1.23 pour obtenir le deboursement d'Avances ou pour se prevaloir
d'une option ou d'un mode d'Avance permis a cette convention;
1.1.24 "Dette" signifie toute Dette ou passif, garanti ou non, qui,
conformement aux principes compatibles generalement reconnus et
acceptes, appliques dans les circonstances d'une maniere constante,
serait inclus dans le calcul du passif de l'Emprunteur. Toute Dette
dont l'echeance est prolongee sera censee avoir ete creee, contractee,
emise ou assumee a compter de la date de telle prolongation; cette
expression comprend en outre le montant des prestations et
engagements financiers de l'Emprunteur en vertu de contrats de
location-acquisition et de baux financiers mais ne comprend pas
(i) tout impot reporte ni (ii) le montant des Dettes Subordonnees;
1.1.25 "Dette a Long Terme" signifie toute Dette ou obligation remboursable
plus de trois cent soixante-cinq (365) jours apres la date a laquelle
elle a ete contractee, creee, emise ou assumee mais ne comprend pas la
portion courante de la Dette a Long Terme;
1.1.26 "Dette Subordonnee" signifie toute Dette dont le remboursement du
capital en tout temps et des interets en cas de defaut en vertu de la
presente convention est subordonne au remboursement de toutes les
sommes dues aux Preteurs en vertu des presentes et ce par voie
d'entente, loi, reglement ou procedure judiciaire liant specifiquement
le creancier de telle Dette aux Preteurs;
1.1.27 "Dollars Canadiens" ou "$ Can." signifie la monnaie ayant cours legal
au Canada;
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1.1.28 "Dollars Americains" ou "$ US" signifie la monnaie ayant cours
legal au Etats-Unis;
1.1.29 "Engagement" signifie l'obligation de chaque Preteur de mettre
les Credits a la disposition de l'Emprunteur, a parts egales,
sauf lorsqu'une disposition de cette convention prevoit un
partage different entre les Preteurs;
1.1.30 "Frais d'Estampillage" signifie les frais payables par
l'Emprunteur pour obtenir l'acceptation d'un Preteur sur une
Acceptation de Banque, calcules sur une base mensuelle sur le
montant nominal de l'Acceptation de Banque et etablis a
1.1.30.1 1% dans le cas du Credit A;
1.1.30.2 1 1/2% dans le cas du Credit B;
1.1.30.3 2% dans le cas du Credit C.
1.1.31 "Exfo USA" signifie Exfo America Inc., personne morale constituee
en vertu des lois de l'Etat du Delaware;
1.1.32 "Jour Ouvrable" signifie une journee ou la succursale de chacun
des Preteurs est ouverte au public a Quebec mais ne comprend ni
le samedi ni le dimanche; lorsqu'il s'agit de dispositions
touchant le Taux LIBOR ou des Avances a Taux LIBOR ou au Taux de
Base US, Jour Ouvrable signifie en plus de ce qui precede, une
journee ou le Marche Interbancaire est ouvert pour affaires a
Londres et a New York;
1.1.33 "Liens" signifie les relations entre l'Emprunteur et toute
personne morale dont l'Emprunteur a, soit directement, soit
indirectement, la propriete effective ou le controle d'un certain
nombre d'actions ou de valeurs mobilieres immediatement
convertibles en actions, conferant plus de dix pour cent (10%)
des droits de vote en tout etat de cause ou en raison soit de la
realisation continue d'une condition, soit d'une option ou d'un
droit d'achat immediat portant sur lesdites actions ou valeurs
mobilieres convertibles;
1.1.34 "Periode de Conversion" signifie la periode dont le point de
depart est la date de la premiere utilisation du Credit B et dont
la date d'echeance est le deuxieme anniversaire de la signature
de cette convention;
1.1.35 "Preteurs" signifie BNC et SGC de meme que toute autre
institution financiere ayant acquis une participation dans les
Credits conformement aux dispositions du paragraphe 15.4 de
cette convention, et "Preteur" signifie l'une ou l'autre d'entre
elles;
1.1.36 "Ratio d'Endettement" signifie le rapport entre le montant total
des Dettes a Long Terme et l'Avoir des Actionnaires;
1.1.37 "Ratio de Fonds de Roulement" signifie le rapport entre l'actif a
court terme sur le passif a court terme; la portion courante de
la Dette a Long Terme entant incluse dans le passif a court terme
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et les Comptes Inter-Compagnies etant exclus de l'actif a court
terme;
1.1.38 "Suretes" signifie les suretes decrites au sous-paragraphe 2.8.2
de cette convention ainsi que toute autre surete eventuellement
consentie en vue de garantir l'un ou l'autre des Credits;
1.1.39 "Taux de Base" signifie, a l'egard de chaque Preteur, pour chaque
jour, le taux variable equivalent au taux d'interet annuel
affiche et annonce a l'occasion par BNC comme etant son taux de
reference alors en vigueur pour determiner le taux d'interet sur
des prets commerciaux consentis au Canada en Dollars Canadiens;
1.1.40 "Taux de Base US" signifie, pour chaque jour, le taux variable
equivalent au taux d'interet annuel affiche et annonce a
l'occasion par BNC comme etant son taux de reference alors en
vigueur pour determiner le taux d'interet sur des prets
commerciaux consentis au Canada en Dollars Americains;
1.1.41 "Taux LIBOR" "(London Interbank Offered Rate)" signifie le taux
d'interet (arrondi a la hausse, si necessaire, au multiple entier
le plus pres de 1/16 de 1%) determine par BNC comme etant egal au
taux offert, a 11h00, heure de Londres, Angleterre, a la date de
determination d'interet LIBOR concernee, par BNC, a des banques
de premier ordre sur le Marche Interbancaire de l'Eurodollar de
Londres pour des depots (en $US de montants specifies) qui
seraient en cours pendant la periode specifiee, et ce, pour
livraison le premier jour de chacune de cette periode specifiee
(telle que choisie par l'Emprunteur), mais sujet a la
disponibilite des fonds a BNC.
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1.2 Termes comptables
Sauf disposition contraire, les termes comptables ont le sens qui leur sont attribues en vertu des principes comptables generalement reconnus au Canada; les calculs comptables ou les postes de bilan ou d'etats financiers auxquels refere cette convention sont tenus pour etre faits ou doivent etre faits suivant ces principes.
1.3 Titres
Les titres des articles et paragraphes ont ete inseres pour faciliter la consultation de cette convention et n'affectent en rien son interpretation.
1.4 Loi applicable
La presente convention est regie et interpretee par le droit applicable dans la province de Quebec.
1.5 Calcul des delais
Dans le calcul des delais, le jour qui marque le point de depart n'est pas compte mais celui de l'echeance l'est. Lorsque le dernier jour en est un non ouvrable, le delai est proroge au premier Jour Ouvrable suivant.
1.6 Annexes
Les annexes a cette convention en font partie integrante.
1.7 Primaute de cette convention
Les dispositions de cette convention prevalent sur toutes dispositions inconciliables des actes constitutifs des suretes quant aux obligations de l'Emprunteur, les delais accordes a l'Emprunteur ainsi qu'aux engagements de l'Emprunteur de faire ou de ne pas faire qui sont plus onereux pour ce dernier que les dispositions des articles 13 et 14 de cette convention. De meme, lorsque les actes constitutifs des suretes prevoient que l'Emprunteur doit aviser les Preteurs ou leur transmettre quelque document ou information, l'Emprunteur est libere de son obligation si la transmission est faite uniquement a l'Agent, sauf dans les cas prevus aux paragraphes 13.4.1 et 13.8.1.4.
2. LES CREDITS
2.1 Description des Credits
Sous reserve des dispositions de la presente convention et notamment du paragraphe 2.2, les Preteurs conviennent conjointement mais non solidairement de mettre a la disposition de l'Emprunteur les Credits suivants, chacun a concurrence du montant maximum de son Engagement:
2.1.1 le Credit A, soit une marge de credit a demande dont le
montant maximal disponible est limite a une somme en capital
de dix millions de Dollars Canadiens (10 000 000$ Can.) ou son
equivalent en Dollars Americains ($ US);
2.1.2 le Credit B, soit un credit a terme rotatif "Evergreen" dont
le montant maximal disponible est limite a une somme en
capital de trois millions de Dollars Canadiens
(3 000 000$ Can.) ou son equivalent en Dollars
Americains ($ US);
2.1.3 le Credit C, soit un credit a terme constitue du solde des
Avances en vertu du Credit B.
2.2 Limite particuliere applicable au Credit A
2.2.1 Le total du montant des utilisations par l'Emprunteur en vertu
du Credit A ne devra en aucun temps exceder le montant que
represente, avant toute consolidation des etats financiers de
l'Emprunteur avec ceux de toute filiale, la somme de i) 90% de
la valeur comptable des Comptes a Recevoir Net Assures, plus
ii) 75% de la valeur comptable des Comptes a Recevoir Nets,
plus iii) 60% de la valeur comptable des matieres premieres,
des produits finis et des inventaires de demonstration de
l'Emprunteur.
2.3 But des Credits
2.3.1 Le Credit A doit etre utilise par l'Emprunteur que pour le
financement de ses operations courantes, incluant pour l'achat
d'elements d'actifs vises a l'article 2.3.2 pour une periode
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n'excedant pas dix (10) jours, en attendant que les Avances
a ces fins soient remboursees par un tirage sur le
Credit B;
2.3.2 Le Credit B doit etre utilise par l'Emprunteur, apres
l'approbation de l'Agent si le cout du projet excede
500 000$ Can., aux seules fins d'acquerir des entreprises ou
actifs relies au meme secteur que celui de l'Emprunteur,
jusqu'a concurrence de 80% du prix d'achat d'actifs, autres
que des immeubles et de 75% du prix d'achat d'immeubles.
L'approbation ou, le cas echeant, le refus de l'Agent doit
etre communique, lorsqu'applicable, dans les vingt-quatre
(24) heures qui suivent la remise a l'Agent de toute
l'information pertinente raisonnablement requise par l'Agent
qui exerce sa discretion raisonnablement et en evitant de
substituer sa propre appreciation a celle de la direction de
l'Emprunteur quant a l'opportunite de mener a terme le
projet soumis;
2.3.3 Le Credit C vise a refinancer a terme le solde utilise du
Credit B a la Date de Conversion;
2.3.4 Aucune autre utilisation des Credits ne sera permise sans le
consentement prealable ecrit unanime des Preteurs.
2.4 Mode d'utilisation
2.4.1 A compter de la Date de Disponibilite, l'Emprunteur peut
utiliser le Credit A suivant l'un ou l'autre des modes
suivants ou, selon le cas, une combinaison des modes
suivants:
2.4.1.1 soit par voie d'Avances a Taux de Base;
2.4.1.2 soit par voie d'Avances a Taux de Base US;
2.4.1.3 soit par voie d'Avances a Taux LIBOR;
2.4.1.4 soit par voie d'Avances par Acceptation de Banque
jusqu'a concurrence de 50% du montant autorise de
ce Credit;
2.4.1.5 soit par l'emission de lettres de garantie ou de
lettres de credit commercial jusqu'a concurrence
de 2 000 000$ Can. ou son equivalent en $ US ou en
d'autres devises;
2.4.1.6 soit un total de 250 000$ Can. de risque net relie
a l'achat de contrats de change a terme a raison
de 10% de risque net impute sur le montant nominal
des contrats de change en Dollars Americains et de
20% sur le montant nominal des contrats de change
en d'autres devises.
2.4.2 A compter de la Date de Disponibilite, l'Emprunteur peut
utiliser le Credit B suivant l'un ou l'autre des modes
suivants ou, selon le cas, une combinaison des modes
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suivants:
2.4.2.1 soit par voie d'Avances a Taux de Base;
2.4.2.2 soit par voie d'Avances a Taux de Base US;
2.4.2.3 soit par voie d'Avances a Taux LIBOR;
2.4.2.4 soit par voie d'Avances par Acceptation de Banque
jusqu'a concurrence de 50% du montant autorise de ce
Credit.
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2.4.3 L'Emprunteur doit utiliser le Credit C suivant l'un ou l'autre des modes suivants ou selon le cas, une combinaison de ceux-ci:
2.4.3.1 soit par voie d'Avances a Taux de Base;
2.4.3.2 soit par voie d'Avances a Taux Fixe;
2.4.3.3 soit par voie d'Avances par Acceptation de Banque
jusqu'a concurrence de 50% du montant autorise de ce
Credit.
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2.5 Montants d'utilisation
2.5.1 Le montant de chaque utilisation est, s'il s'agit:
2.5.1.1 du Credit A, d'au moins 10 000$ Can. ou $ US selon le cas et, au-dela de ce montant, de multiples de 10 000;
2.5.1.2 du Credit B, d'au moins 25 000$ Can. et, au-dela de ce montant, de multiples de 25 000;
2.6 Utilisation proportionnelle
2.6.1 L'utilisation des Credits s'effectuera de telle sorte que:
2.6.1.1 l'ensemble des utilisations d'un Credit soit reparti
par l'Agent entre chaque Preteur afin que l'Engagement
de chacun d'eux dans ce Credit soit respecte, sauf
lorsqu'une disposition de cette convention prevoit un
autre partage;
2.6.1.2 les modes d'utilisation aupres de chaque Preteur soient
proportionnellement identiques, sous reserve de ce qui
precede.
2.6.2 Le deboursement du Credit A pourra etre fait par acceptation de
cheques tires par l'Emprunteur sur le compte d'operations en
$ Can. ou sur le compte d'operations en $ US (ci- apres designes
collectivement le "Compte d'Operations") tenu par l'Agent.
L'Agent effectuera seul les deboursements requis; il pourra
effectuer des deboursements ou prendre des engagements au-dela de
son Engagement mais le jeudi de chaque semaine ou a tout autre
moment s'il le juge approprie mais au moins a tous les deux
jeudis, l'Agent livrera a l'autre Preteur un avis etablissant le
montant correspondant a son Engagement dans les utilisations
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du Credit A par l'Emprunteur et chaque Preteur devra livrer a l'Agent a 16h00, heure de Quebec, le meme jour, par traite bancaire ou par televirement bancaire, tel montant. L'Agent en imputera aussitot le produit au credit du Compte d'Operations.
2.7 Reutilisation du Credit A et du Credit B
L'Emprunteur peut reutiliser le Credit A et le Credit B, etant entendu qu'il ne peut faire aucune reutilisation qui aurait pour resultat que les montants totaux respectifs des utilisations et reutilisations en cours excederaient les montants maximums de ces Credits prevus aux paragraphes 2.1 ou 2.2, selon le cas, compte tenu des remboursements a etre effectues ou des reductions du montant maximal disponible effectuees conformement aux dispositions de l'article 10. Toutes les dispositions de la presente convention relatives a une utilisation de ces Credits s'appliquent, avec les adaptations necessaires, a une reutilisation.
2.8 Conditions prealables a la mise a la disposition des Credits a l'Emprunteur
Sous reserve de toutes autres exigences stipulees aux presentes, l'utilisation des Credits par l'Emprunteur est assujettie a l'accomplissement prealable des conditions suivantes, a l'entiere satisfaction des Preteurs:
2.8.1 Opinions
2.8.1.1 les Preteurs auront recu une opinion favorable et
satisfaisante sur le statut corporatif de l'Emprunteur
et d'Exfo USA;
2.8.1.2 les Preteurs auront recu des opinions favorables et
satisfaisantes sur la constitution et le rang des
Suretes et, s'il y a lieu, sur les titres a jour,
emises par des conseillers juridiques acceptables a
l'Agent;
2.8.1.3 les Preteurs auront recu des conseillers juridiques de
l'Agent une opinion favorable concernant l'ensemble de
la transaction.
2.8.2 Suretes
2.8.2.1 A la garantie de toutes ses Dettes presentes et futures
envers les Preteurs decoulant des Credits, l'Emprunteur
aura consenti les Suretes de premier rang suivantes
(sujettes seulement aux suretes a etre radiees
garantissant des prets devant etre rembourses a meme le
premier debours du Credit A et/ou du Credit B),
lesquelles auront ete dument enregistrees ou, selon le
cas, publiees partout ou requis:
2.8.2.1.1 des garanties en vertu de l'article 427 de la
Loi sur les banques;
2.8.2.1.2 une hypotheque mobiliere sans depossession
publiee au Quebec et grevant l'universalite
des stocks et
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des comptes a recevoir presents et futurs de l'Emprunteur;
2.8.2.1.3 un "general assignment of book debts" enregistre en Ontario et
grevant l'universalite des stocks et des comptes a recevoir
presents et futurs de l'Emprunteur;
2.8.2.1.4 un "general security agreement" enregistre en Ontario et grevant
l'universalite des biens meubles presents et futurs de
l'Emprunteur;
2.8.2.1.5 un "security agreement" en vertu du Uniform Commercial Code
enregistre aux Etats-Unis et grevant l'universalite des biens
meubles presents et futurs de l'Emprunteur;
2.8.2.1.6 un cautionnement (ou l'equivalent) d'Exfo USA garanti par un
"security agreement" en vertu du Uniform Commercial Code
enregistre aux Etats-Unis et grevant l'universalite des comptes
a recevoir presents et futurs d'Exfo USA;
2.8.2.1.7 une hypotheque sans depossession publiee au Quebec et grevant
l'universalite des biens meubles et immeubles presents et futurs
de l'Emprunteur;
2.8.2.1.8 un engagement par l'Emprunteur et Gexfo Investissements
Technologiques Inc. de maintenir et de respecter, pour le
benefice des Preteurs, l'entente de subordination souscrite par
elle en faveur du Ministere de l'Industrie, du Commerce, des
Sciences et de la Technologie et dont copie est jointe comme
Annexe 2.8.2.1.8;
2.8.2.1.9 une hypotheque grevant les assurances (et les indemnites payables
en vertu de celles-ci) couvrant les biens greves en vertu des
Suretes decrites plus haut.
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2.9 Conditions prealables a chaque utilisation
Lors de toute utilisation des Credits, quel qu'en soit le mode, de meme que lors de toute reutilisation, quel qu'en soit le montant, toutes les declarations faites par l'Emprunteur aux presentes seront reputees reiterees par lui comme etant exactes, les
declarations faites au paragraphe 12.5 etant censees, pour le futur, se referer aux plus recents etats financiers verifies ou, selon le cas, non verifies.
2.10 Au cas de non-disponibilite
Lorsqu'en vertu de l'une ou l'autre des dispositions de cette
convention, l'Emprunteur est avise qu'il ne peut utiliser un mode en
raison de la non-disponibilite des fonds ou de toute autre modalite
souhaitee dans une Demande d'Utilisation, l'Agent avise des que
possible l'Emprunteur lorsque le mode redevient disponible suivant les
modalites souhaitees par l'Emprunteur.
3.- DISPOSITIONS PARTICULIERES AUX AVANCES A TAUX FIXE
3.1 Mecanisme
Les Avances a Taux Fixe, lorsque permises en vertu d'une disposition
de cette convention, sont pour les montants, periodes et taux
d'interet choisis et accceptes par l'Emprunteur suivant les conditions
et modalites prevues au present article 3, prealablement a une
utilisation, une conversion ou un renouvellement en vertu de ce mode.
3.2 Demande d'Utilisation
Au moins trois (3) jours ouvrables avant la date choisie par
l'Emprunteur pour l'utilisation du mode d'Avances a Taux Fixe (ou une
conversion ou un renouvellement en vertu de ce mode), ce dernier
transmet a l'Agent une Demande d'Utilisation.
3.3 Disponibilite des fonds
Des Avances a Taux Fixe peuvent etre offertes a la condition que les
Preteurs aient obtenu ou puissent obtenir des fonds disponibles a
cette fin.
3.4 Periodes et montants
3.4.1 Les Avances a Taux Fixe sont pour des periodes de 1 a 5 ans;
3.4.2 Les periodes et les montants des Avances a Taux Fixe en
vertu du Credit C doivent etre choisis de facon a ce que le
montant global des Avances a Taux Fixe et des Avances sous
d'autres modes faites en vertu du Credit C n'excede jamais
le montant maximum autorise en tenant compte des termes de
remboursement de ce Credit.
3.5 Taux
3.5.1 Le taux d'interet applicable aux Avances a Taux Fixe en
vertu du Credit C est le taux offert par chacun des
Preteurs. L'Agent informe l'Emprunteur du taux offert par
chachun des Preteurs pour la periode et le montant choisis.
L'Emprunteur doit alors accepter ou refuser indivisiblement
le taux offert par chacun des
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Preteurs, mais il doit communiquer son acceptation a l'Agent le meme jour ou celui-ci lui a communique les taux, faute de quoi l'offre devient caduque.
4.- DISPOSITIONS PARTICULIERES AUX AVANCES A TAUX LIBOR
4.1 Mecanisme
Les Avances a Taux LIBOR, lorsque permises en vertu d'une disposition de cette convention, sont pour les montants, periodes et taux d'interet choisis et acceptes par l'Emprunteur suivant les conditions et modalites prevues au present article 4, prealablement a une utilisation, une conversion ou un renouvellement en vertu de ce mode.
4.2 Demande d'Utilisation
Au moins trois (3) jours ouvrables avant la date choisie par l'Emprunteur pour l'utilisation du mode d'Avances a Taux LIBOR (ou une conversion ou un renouvellement en vertu de ce mode), ce dernier transmet a l'Agent une Demande d'Utilisation.
4.3 Disponibilite des fonds
Des Avances a Taux LIBOR peuvent etre offertes a la condition que les Preteurs aient obtenu ou puissent obtenir des fonds disponibles a cette fin.
4.4 Periodes et montants
4.4.1 Les Avances a Taux LIBOR en vertu du Credit A et du Credit B sont
pour des periodes de 30 a 365 jours et pour des tranches de
1 000 000$ US ou de multiples de millions;
4.4.2 Les periodes et les montants des Avances a Taux LIBOR doivent
etre choisis de facon a ce que le montant global des Avances
faites en vertu des divers modes utilises n'excede jamais le
montant maximum prevu ou permis en tenant compte des termes de
remboursement applicables.
4.5 Taux
4.5.1 Toute determination par BNC du Taux LIBOR applicable a une
periode specifiee sera, en l'absence d'erreur manifeste, finale
et concluante. Des qu'un tel Taux LIBOR aura ete etabli a la date
de determination du Taux LIBOR applicable, la Banque devra en
informer l'Emprunteur. Cet interet courra de jour en jour et sera
calcule sur la base du nombre de jours effictivement ecoules
divise par 360. Les taux annuels d'interet auxquels sont
equivalents les taux etablis conformement aux dispositions de la
phrase que precede sont les taux ainsi etablis multiplies par le
nombre de jours dans l'annee (soit 365 ou 366) et divise par 360.
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4.6 Paiement de l'interet
Le Client s'engage a payer a l'Agent, en $US, l'interet sur les Avances a Taux LIBOR a un taux annuel egal au taux applicable le dernier jour de la periode specifiee de l'Avance a Taux LIBOR si l'Avance est pour une periode de moins de trois mois, et trimestriellement si l'Avance est pour une periode de plus de trois mois. Si le Client desire contracter une avance LIBOR, il devra donner a la Banque un avis avant 10h00, heure de Montreal, le troisieme jour ouvrable avant le debut de la premiere periode d'interet LIBOR et indiquer dans cet avis son choix quant a la duree de cette periode. Si le Client desire renouveler cette avance LIBOR il devra, trois jours ouvrables avant l'expiration de cette premiere periode, donner un avis a cet effet a la Banque et indiquer dans cet avis son choix quant a la duree de la periode d'interet LIBOR subsequente, laquelle doit commencer et inclure le jour qui suit l'expiration de la premiere periode. La meme procedure s'appliquera, en tenant compte de toutes les adaptations necessaires, a tout renouvellement subsequent.
4.7 Traitement a echeance
Si a la date d'echeance d'une Avance a Taux LIBOR, l'Emprunteur desire rembourser l'Avance, il devra aviser l'Agent a cet effet trois jours bancaires avant la date d'echeance de cette Avance, et cette Avance a Taux LIBOR sera alors payable a cette date d'echeance.
5.- AVANCES PAR ACCEPTATIONS DE BANQUE
5.1 Mecanisme
Les Avances par Acceptations de Banque, lorsque permises en vertu d'une disposition de cette convention, sont pour les montants, periodes et taux d'interet choisis et acceptes par l'Emprunteur suivant les conditions et modalites prevues au present article 5, prealablement a une utilisation, une conversion ou un renouvellement en vertu de ce mode.
5.2 Demande d'Utilisation
Au moins la veille avant la date choisie par l'Emprunteur pour l'utilisation du mode d'Avances par Acceptation de Banque (ou une conversion ou un renouvellement en vertu de ce mode), ce dernier transmet a l'Agent une Demande d'Utilisation.
5.3 Conditions d'utilisation
L'Emprunteur peut, s'il a soumis une Demande d'Utilisation conforme, emettre des Acceptations de Banque tirees sur chacun des Preteurs, pour des montants egaux, et demander aux Preteurs de les accepter a la condition:
5.3.1 Que l'echeance choisie soit (et qu'elle puisse etre, compte
tenu des modalites de remboursement applicables au Credit vise
et des termes disponibles) d'au moins 30 jours et d'au plus
365 jours;
5.3.2 Que ce soit pour des multiples de 100 000 et d'au moins
500 000$ Can.; et
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5.3.3. Que la somme des Avances par Acceptations de Banque n'excede pas 50% du montant autorise du Credit, ce calcul etant fait une seule fois lors de l'utilisation de ce mode;
5.4 Formules d'Acceptation de Banque et taux d'escompte
Chaque Acceptation de Banque doit etre correctement tiree sur la formule fournie par chacun des Preteurs a cette fin. Le taux d'escompte applicable est celui fourni par chaque Preteur.
5.5 Procuration
Dans la mesure ou il donne suite a une Demande d'Utilisation de l'Emprunteur, chaque Preteur est autorise a signer pour et au nom de l'Emprunteur toute Acceptation de Banque que ce dernier desire voir emettre. Toute Acceptation de Banque ainsi signee engage l'Emprunteur de la meme facon que si elle avait ete signee par un ou plusieurs de ses representants dument autorise(s) de l'Emprunteur.
5.6 Produit de l'Acceptation de Banque
Sur reception par l'Agent du produit escompte de toute Acceptation de Banque, l'Agent credite le Compte d'Operations de l'Emprunteur du produit recu et debite le Compte d'Operations du montant des Frais d'Estampillage applicables.
5.7 Debit du Compte d'Operations a l'echeance
A la date d'echeance de toute Acceptation de Banque, l'Agent debite le Compte d'Operations de l'Emprunteur d'un montant egal a la valeur nominale de telle Acceptation de Banque, peu importe que telle Acceptation de Banque soit ou non detenue par l'un ou l'autre des Preteurs de plein droit a l'echeance.
5.8 Montant non recouvre
Tout montant debite ou devant etre debite par l'Agent en vertu du paragraphe 5.7 et qui n'est pas recouvre a meme le Compte d'Operations de l'Emprunteur est immediatement exigible de l'Emprunteur avec interet comme s'il s'agissait d'une Avance a Taux de Base.
5.9 Acquisition par les Preteurs
Les Preteurs peuvent se porter acquereurs, lors de leur emission, des Accpetations de Banque emises par l'Emprunteur sans affecter d'aucune facon les droits qui leur sont conferes en vertu de l'une ou l'autre des dispositions de cette convention.
5.10 Renonciation
L'Emprunteur renonce a exiger des Preteurs et a ce que l'Agent exige, le cas echeant, d'un detenteur d'une Acceptation de Banque, des jours de grace pour le paiement d'une Acceptation de Banque a son echeance.
6.- LETTRES DE GARANTIE ET LETTRES DE CREDIT COMMERCIAL
6.1 Mecanisme
A l'interieur de limites prevues au sous-paragraphe 2.4.1.5, l'Emprunteur peut soumettre une Demande d'Utilisation a un Preteur pour l'emission, par ce Preteur, d'une lettre de garantie ou d'une lettre de credit commercial. SGC peut emettre directement des lettres de garantie ou des lettres de credits commerciales jusqu'a concurrence d'un montant total n'excedant pas un million de $ Can., ou son equivalent en $ US. Le Preteur qui recoit la Demande d'Utilisation en avise immediatement l'autre Preteur.
6.2 Partage de risques et de commissions
Le Preteur non-emetteur de la lettre de garantie ou de la lettre de credit commercial est repute partage le risque encouru par le Preteur emetteur, en proportion de son Engagement, et a droit de recevoir du Preteur emetteur une portion correspondante a son Engagement des commissions et frais payables au Preteur emetteur, moins une tranche de sept points (.07%) qui est acquise au Preteur emetteur en sus de la portion acquise a ce dernier en proportion de son Engagement.
6.3 Frais et commissions
Prealablement ou concurremment a l'emission d'une lettre de garantie ou d'une lettre de credit commercial, l'Emprunteur doit payer au Preteur emetteur la commission et, selon le cas, les frais exigibles suivant la tarification etablie de temps a autre par le Preteur emetteur.
7.- CONTRATS DE CHANGE
7.1 Mecanisme
A l'interieur des limites prevues au sous-paragraphe 2.4.1.6, l'Emprunteur peut soumettre une Demande d'Utilisation a un Preteur pour l'obtention, par ce Preteur, de contrats de change a terme. Le Preteur qui recoit la Demande d'Utilisation en avise immediatement l'autre Preteur.
7.2 Frais et commissions
Prealablement ou concurremment a l'emission d'un contrat de change, l'Emprunteur doit payer au Preteur emetteur la commission et, selon le cas, les frais exigibles suivant la tarification etablie de temps a autre par le Preteur emetteur.
8.- HONORAIRES D'ATTENTE
8.1 Modalites
L'Emprunteur paiera trimestriellement a l'Agent le dernier jour ouvrable de chaque trimestre, pour le compte des Preteurs, des honoraires d'attente de 1/4% calcule quotidiennement sur toute portion non utilisee du Credit B.
9.- INTERET
9.1 Choix repute
Toute Avance en vertu de l'un ou l'autre des Credits ou pour lequel un mode autre que l'Avance a Taux de Base n'a pas ete choisi est, a compter de la date du debours de telle Avance ou a la date ou un autre mode est applicable, reputee etre une Avance a Taux de Base et porte interet au taux applicable en vertu de ce mode.
9.2 Avance a Taux US
Toute Avance a Taux US porte interet, jusqu'a remboursement ou conversion en vertu d'un autre mode, au taux applicable en vertu de ce mode.
9.3 Avance a Taux Fixe
Toute Avance a Taux Fixe porte interet jusqu'a remboursement, conversion ou renouvellement, au taux convenu conformement au sous-pargraphe 3.5.
9.4 Calcul de l'interet
9.4.1 Sauf pour les Avances a Taux LIBOR, tout interet est calcule
sur le solde quotidien et sur la base d'une annee de 365 jours;
9.4.2 Pour les fins de la Loi sur l'interet, dans le cas d'une annee
bissextile, le taux d'interet annuel auquel equivaut l'interet
calcule sur la base de 365 jours, est egal au taux d'interet
ainsi calcule multiplie par 366 et divise par 365;
9.4.3 Le principe de reinvestissement d'interet presume ne s'applique
pas a la determination de tout taux d'interet.
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9.5 Paiement de l'interet
Sauf pour les Avances a Taux LIBOR, l'interet est payable a l'Agent pour le benefice des Preteurs le 26e jour de chaque mois; l'interet est debite par l'Agent du Compte d'Operations.
9.6 Interet sur arrerages
Toute somme qui n'est pas payee a echeance et qui est due a titre de principal ou d'interet porte interet au meme taux et est payable sur demande. Toute somme qui n'est pas payee a echeance et qui est due a titre de commission, frais d'escompte, ou a tout autre titre en vertu de cette convention, porte interet au Taux de Base majore de 3/4% et est payable sur demande.
9.7 Ecart sur taux de change US
Si a tout moment, en raison de variation du taux de change, les Avances en Dollars Americains excedent le montant autorise en vertu du Credit vise et que l'ecart ainsi cree est d'au moins 3%, l'Emprunteur doit, dans les 2 jours ouvrables suivant une demande de l'Agent, verser a l'Agent la somme requise par lui pour couvrir cet ecart.
10. REMBOURSEMENTS ET REDUCTION DES MONTANTS DISPONIBLES
10.1 Remboursement du Credit A
Les sommes utilisees par l'Emprunteur en vertu du Credit A sont remboursables sur demande. Le Credit A est accorde a l'Emprunteur sur une base annuelle; il sera revise par les Preteurs annuellement a la Date de Revision et ce, a compter du 31 decembre 1996 et les Preteurs pourront alors, a leur entiere discretion, renouveler le Credit A aux memes termes et conditions, en modifier le montant, le taux d'interet ou les autres termes et conditions le regissant ou y mettre fin. De plus, les etats financiers annuels pour l'exercice se terminant le 31 aout 1995 devront confirmer le respect des conditions applicables au Credit A.
10.2 Remboursement du Credit B
Les sommes utilisees par l'Emprunteur en vertu du Credit B sont remboursables au plus tard le dernier jour de la Periode de Conversion a moins que l'Emprunteur ne se prevale a ce moment du droit de les convertir en Credit C. Le Credit B est de plus soumis a la revision annuelle prevue au paragraphe 10.1.
10.3 Remboursement du Credit C
Les Avances en vertu du Credit C sont remboursables sur une base d'amortissement determinee par l'Agent en fonction du type d'actifs acquis par l'Emprunteur a meme le Credit B; elle sera de 7 ans ou de 13 ans selon que les actifs ainsi acquis sont principalement des actifs autres qu'immeubles ou principalement des immeubles. L'Emprunteur doit rembourser les Avances en vertu du Credit C au moyen de versements mensuels, egaux et consecutifs etablis selon la base d'amortissement determinee, commencant le premier jour du mois suivant la Date de Conversion et suivis d'un versement egal au solde du Credit C, a l'echeance choisie par l'Emprunteur a la Date de Conversion et qui peut etre de 1 a 5 ans, de sorte que le solde des Avances en vertu du Credit B converties en Credit C soient entierement remboursees au plus tard cinq (5) ans apres la Date de Conversion.
10.4 Remboursement par anticipation du Credit C
L'Emprunteur peut rembourser en tout tempes par anticipation, en tout ou en partie, les Avances en vertu du Credit C constituees d'Avances a Taux de Base, a la condition que les fonds affectes a tel remboursement proviennent des fonds generes par l'entreprise (a meme ses liquidites au Compte d'Operations ou a meme le Credit A) ou du produit de l'emission de son capital social. Si des fonds affectes a tel remboursement proviennent d'autres sources, des frais de remboursement par anticipation egaux a 3 mois d'interet calcules au taux applicable au moment du remboursement par anticipation sont payables par l'Emprunteur a l'Agent en meme temps que tel remboursement par anticipation qui est impute contre les versements de capital dont l'echeance est la plus eloignee. Aucun remboursement par anticipation n'est permis pour les Avances en vertu d'un autre mode a moins que l'Emprunteur ne paie, en meme temps que tel
remboursement par anticipation, les pertes de toute nature reliees directement ou indirectement a tel remboursement par anticipation, le tout tel que determine par les Preteurs.
11.- LIEU DE PAIEMENT
Tout paiement doit etre effectue a la succursale de l'Agent dont l'adresse est indiquee sur la premiere page de la presente convention, ou a tout autre lieu dont l'Agent notifie l'Emprunteur.
12.- DECLARATIONS
L'Emprunteur declare qu'a la date de signature des presentes:
12.1 Pouvoirs
L'Emprunteur et Exfo USA sont des personnes morales validement
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constituees, sont en regle avec les lois et reglements qui les regissent, detiennent les pouvoirs, permis et autorisations necessaires a l'exploitation de leur entreprise.
12.2 Schema corporatif
Le schema corporatif joint comme Annexe 12.2 est complet et exact.
12.3 Filiale
L'Emprunteur n'a aucune filiale.
12.4 Exercice financier
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L'exercice financier de l'Emprunteur se termine le 31 aout de chaque annee.
12.5 Situation financiere
Il n'y a eu aucun changement defavorable important dans la situation financiere de l'Emprunteur (et l'Emprunteur, en date des presentes, n'anticipe pas un tel changement) depuis la date de ses derniers etats financiers remis a l'Agent.
12.6 Defauts
L'Emprunteur n'est pas en defaut en vertu des contrats qui le lient, des lois et reglements applicables a l'exploitation de son entreprise non plus qu'en vertu des decisions, ordonnances, instructions, directives, licences, permis ou certificats donnes ou emis en vertu de ces lois et reglements dans la mesure ou tel defaut pourrait affecter defavorablement de facon importante sa situation financiere, sa capacite d'exploiter son entreprise ou sa capacite de remplir ses obligations en vertu de la presente convention; le fait de se conformer aux presentes ne creera pas tel defaut; il n'existe aucun motif qui pourrait entrainer la suspension, l'annulation ou la revocation des licences, permis ou certificats ci-dessus.
12.7 Litiges
Il n'existe aucun litige ou aucune procedure judiciaire impliquant
l'Emprunteur qui pourrait affecter defavorablement et de facon importante
sa situation financiere, sa capacite d'exploiter son entreprise ou sa
capacite de remplir ses obligations en vertu de cette convention.
12.8 Titres de propriete
L'Emprunteur est proprietaire absolu des biens et droits, meubles et
immeubles qui font partie de son actif et ceux-ci sont libres de toute
surete ou affectation quelconque autre que les suretes devant etre radiees
concurremment au deboursement du Credit A et/ou du Credit B; il n'a pas
recu d'avis a l'effet que tels biens ou l'usage qui en est fait n'est pas
conforme aux lois et reglements applicables.
12.9 Assurances
Les biens et l'entreprise de l'Emprunteur sont assures comme prevu au
paragraphe 13.8.
12.10 Taxes
L'Emprunteur a paye toutes ses taxes, impots ou impots ayant l'objet
de cotisations ou etabli des reserves suffisantes pour pourvoir a leur
paiement.
12.11 Environnement
12.11.1 L'Emprunteur ne contrevient pas aux lois ayant trait
aux questions d'environnement, vis-a-vis desquelles la
non-conformite aurait, seule ou dans son ensemble, un aspect
negatif important sur les activites, l'actif, le passif, la
situation financiere, les resultats d'exploitation ou
perspectives d'affaires de l'Emprunteur ou sur sa capacite a
exercer ses obligations aux termes de la presente convention
ou des documents auxquels elle refere; la signature, la
livraison, l'execution des obligations et le respect des
dispositions de la presente convention et des documents
auxquels elle refere n'entrainera pas de telles
contraventions, ne constituera pas un defaut et ne viendra
pas en conflit avec de telles dispositions et n'aboutira pas
a la creation d'une hypotheque, d'une affectation ou d'une
charge importante sur quelque propriete ou bien de
l'Emprunteur;
12.11.2 L'Emprunteur n'a pas ete avise du fait que ses operations
contrevenaient a un reglement municipal en matiere
d'environnement, a la Loi sur la qualite de
l'environnement, a la Loi sur les accidents du travail et
les maladies professionnelles ou a la Loi canadienne sur la
protection de l'environnement, ni aux reglements adoptes en
vertu de ces lois;
12.11.3 L'Emprunteur n'a pas ete avise du fait qu'il y a des
contaminants ou des polluants de quelque sorte dans ses
batiments, immeubles, terrains ou equipements dont la
presence
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constituerait une infraction a tout reglement municipal
applicable, a la Loi sur la qualite de l'environnement ou a
la Loi canadienne sur la protection de l'environnement ou
aux reglements adoptes en vertu de ces lois dans la mesure
ou telle infraction pourrait avoir, seule ou dans son
ensemble, un aspect negatif important sur les activities,
l'actif, le passif, la situation financiere, les resultats
d'exploitation ou perspectives d'affaires de l'Emprunteur ou
sur sa capacite a exercer ses obligations aux termes de la
presente convention ou des documents auxquels elle refere;
12.11.4 Les equipements de l'Emprunteur sont en bon etat et il a ete
pourvu a leur entretien afin qu'ils soient conformes aux
normes presentement en vigueur dans les differentes lois et
reglements en matiere d'environnement de telle sorte que
cette non-conformite n'ait pas, seule ou dans son ensemble,
un aspect negatif important sur les activites, l'actif, le
passif, la situation financiere, les resultats
d'exploitation ou perspectives d'affaires de l'Emprunteur
ou sur sa capacite a exercer ses obligations aux termes
de la presente convention ou des documents auxquels elle
refere.
12.12 Place d'affaires
L'Emprunteur et Exfo USA n'ont pas d'autres places d'affaires que
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celles mentionnees a l'Annexe 12.12.
13. ENGAGEMENTS DE L'EMPRUNTEUR
A moins d'avoir obtenu le consentement prealable ecrit des Preteurs a l'effet contraire, l'Emprunteur s'oblige:
13.1 Poursuite de l'entreprise
13.1.1 A maintenir son existence corporative;
13.1.2 A ne pas provoquer sa fusion ou consolidation avec toute
autre societe ou personne morale;
13.1.3 A se conformer aux lois et reglements qui lui sont
applicables de meme qu'aux exigences et conditions des
decisions, ordonnances, instructions, directives, permis,
autorisations ou licences donnes ou emis en vertu de ces
lois et reglements et maintenir en vigueur tels permis,
autorisations ou licences;
13.1.4 A poursuivre son entreprise d'une maniere appropriee et
efficace;
13.1.5 A ne pas changer substantiellement la nature de ses
affaires;
13.1.6 A ne pas changer la date de la fin de son exercise
financier, soit le 31 aout;
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13.1.7 A ne pas creer de filiale.
13.2 Fonds de roulement
13.2.1 A maintenir en tout temps, un ratio de fonds de roulement egal ou superieur a 1.25/1;
13.3 Ratio d'Endettement
A maintenir en tout temps un Ratio d'Endettement egal ou inferieur a 1.75/1 et un Avoir des Actionnaires d'au moins 5 000 000$ Can.
13.4 Etats financiers, certificats et documents
13.4.1 A fournir aux Preteurs, dans un delai de 120 jours de la fin
de chaque exercice financier, deux copies de ses etats
financiers annuels verifies, sur une base consolidee et non
consolidee pour l'Emprunteur et pour Exfo USA (accompagnes
du rapport de verificateurs reconnus), prepares conformement
aux principes comptables generalement reconnus au Canada,
appliques d'une maniere constante;
13.4.2 A fournir a l'Agent deux copies de ses etats financiers
mensuels non verifies sur une base consolidee et non
consolidee et ce, dans un delai de 30 jours de la fin de
chaque mois;
13.4.3 A fournir a l'Agent, s'il le requiert, deux copies de ses
etats financiers trimestriels non verifies, sur une base
consolidee et non consolidee et ce, dans un delai de
30 jours de la fin de chaque trimestre;
13.4.4 A fournir a l'Agent, sur une base mensuelle, dans un delai
de 30 jours suivant la fin de chaque mois, un certificat
du controleur ou d'un dirigeant etablissant:
13.4.4.1 la liste detaillee des inventaires specifiant
notamment les produits finis, les matieres
premieres, les produits en demonstration et les
provisions pour biens desuets ainsi que leur
localisation;
13.4.4.2 la liste de ses comptes a recevoir specifiant
notamment les comptes a recevoir selon leur date
d'echeance (30-60-90 jours), les assurances
applicables le cas echeant, les provisions pour
mauvaises creances, les Comptes Inter-Compagnies
et les Comptes de Contrepartie, le tout classe
selon la place d'affaires d'ou sont percus les
comptes a recevoir;
13.4.4.3 le montant des Creances Prioritaires;
13.4.4.4 le montant maximal pouvant etre utilise en vertu
du Credit A;
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13.4.4.5 que les representations et garanties de l'Emprunteur
contenues aux presentes sont vraies et exactes a la
date dudit certificat; et
13.4.4.6 que l'Emprunteur n'est pas en defaut en vertu de
cette convention.
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13.5 Utilisation des Credits aux fins prevues
A utiliser les Credits aux seules fins permises dans cette convention.
13.6 Livres comptables
A permettre aux representants autorises de l'Agent, sur preavis de quarante-huit (48), heures, aux frais des Preteurs sauf si l'Emprunteur est en defaut, de visiter son entreprise, d'examiner ses livres comptables, d'en extraire des donnees et de discuter de ses affaires avec ses officiers, tous les renseignements obtenus devant etre consideres confidentiels. L'Emprunteur peut exiger des mandataires des Preteurs, autres que des employes des Preteurs, la signature d'un engagement de confidentialite.
13.7 Renseignements
A aviser promptement l'Agent de tout defaut en vertu de la presente convention de meme que de tout fait pouvant affecter de facon importante et defavorable sa situation financiere sur une base consolidee ou non consolidee ou la conduite de son entreprise ou de celle de ses filiales, a fournir a l'Agent tout renseignement disponible que celui-ci peut raisonnablement lui demander relativement a sa situation financiere.
13.8 Assurances
13.8.1 A assurer et maintenir constamment assures au benefice des
Preteurs son entreprise (notamment en responsabilite civile et
interruption des affaires afin de couvrir dans ce dernier cas
les frais supplementaires relies a la survenance d'un sinistre)
et ses biens pour leur pleine valeur de remplacement, contre
toute perte ou dommage cause par incendie ou autre sinistre et
contre tous autres risques et perils pour lesquels des
entreprises semblables a celles de l'Emprunteur s'assurent
habituellement, etant entendu que:
13.8.1.1 ces assurances seront contractees aupres de
compagnies d'assurance de bonne renommee, a la
satisfaction de l'Agent;
13.8.1.2 les primes d'assurances requises seront
ponctuellement payees;
13.8.1.3 periodiquement, a la demande de l'Agent,
l'Emprunteur devra fournir a celui-ci tous
renseignements demandes relativement a son
portefeuille d'assurances;
13.8.1.4 au moins quinze (15) jours avant l'echeance de
chaque police d'assurance, l'Emprunteur devra fournir
ou faire en sorte que soit fournies aux
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Preteurs des preuves de son renouvellement, de sa
prolongation ou de son remplacement faute de quoi
l'Agent pourra, sans avis et sous reserve de ses autres
droits, renouveler ou remplacer, aux frais de
l'Emprunteur la police d'assurances concernee;
13.8.1.5 en cas de perte ou de sinistre, l'Emprunteur devra
aviser ou faire en sorte que soit avise sans delai
l'Agent;
13.8.1.6 les assurances de l'Emprunteur devront contenir une
clause hypothecaire et les pertes seront payables aux
Preteurs.
13.9 Environnement
13.9.1 A constamment detenir les autorisations, permis et
certificats requis par toute loi ou reglemente relatifs a
l'environnement et a en transmettre copie a l'Agent s'il le
requiert;
13.9.2 A respecter et se conformer a toutes les lois et a tous les
reglements relatifs a l'environnement qui lui sont ou lui
seront applicables, incluant toutes decisions, ordonnances,
instructions, directives, licences ou certificats;
13.9.3 A transmettre sans delai a l'Agent tout avis faisant etat
d'une violation a tels lois, reglements, decisions,
ordonnances, instructions, directives, permis, licences ou
certificats;
13.9.4 A prendre tous les moyens necessaires pour exploiter son
entreprise sans nuire a l'environnement ainsi que toutes les
mesures necessaires pour reparer les dommages resultant de la
violation de toute loi, reglement ou norme applicable en
matiere d'environnement, du rejet de substances dangereuses
dans ses proprietes ou de toute autre contamination de
celles-ci.
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13.10 Indemnisation en matiere d'environnement
A indemniser et tenir a couvert en toutes circonstances les Preteurs, leurs administrateurs, officiers, employes, agents, successeurs et ayants droit, contre toute perte, cout, depense, sinistre ou allegation de sinistre resultant d'une reclamation pour des dommages causes a l'environnement par ses activites ou par la contamination de ses biens ou encore par la contamination en provenance de celles-ci. Sans limiter la portee generale de ce qui precede, cet engagement vaudra a l'encontre des demandes, poursuites, jugements, dommages, frais et pertes que pourrait occasionner aux beneficiaires de cette indemnisation l'exercice contre eux des recours prevus par les lois, presentes et futures, applicables en matiere d'environnement, dans les cas suivants:
13.10.1 lors de la decouverte de l'existence certaine ou probable d'un degagement de polluant dans les proprietes de l'Emprunteur, que ce polluant en provienne ou qu'il provienne d'un terrain adjacent, et que la presence confirmee ou presumee du polluant reduise ou non la valeur des proprietes;
13.10.2 en cas de degagement d'un polluant dont l'Emprunteur, ses
predecesseurs ou cedants ont ou ont eu la propriete, la
charge, la gestion ou le controle, ou que ce soit;
13.10.3 si une autorite federale, provinciale, etatique, municipale ou
locale, ou toute autre decoulant de l'existence d'une nuisance
publique ou privee ou de l'exercise d'une activite dangereuse
dans les proprietes de l'Emprunteur ou a son voisinage;
13.10.4 dans toute autre circonstance touchant les proprietes ou les
activites de l'Emprunteur, qu'un organisme federal,
provincial ou local competent jugerait contraire a la
protection de l'environnement.
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L'obligation de l'Emprunteur nait des la decouverte d'un polluant quelconque, qu'un organisme federal, provincial ou local ait ou non adopte ou indique qu'il adopterait des mesures a son egard.
Les obligations resultant de la presente indemnisation sont inconditionnelles et irrevocables; elles ne peuvent etre modifiees par la connaissance de la non-conformite de l'etat des actifs et de l'exploitation de l'entreprise de l'Emprunteur avec les lois et normes applicables en matiere d'environnement qu'aurait l'un ou l'autre des beneficiaires de cette indemnisation ni par aucun acte ni aucune omission ou circonstance, meme si la responsabilite en incombe a l'un ou l'autre des beneficiaires de cette indemnisation, sauf en cas de negligence grave ou d'erreur deliberee de la part de l'un ou l'autre de ces derniers; elles survivront au remboursement des Credits et a la cession partielle ou totale des droits et interets de l'Emprunteur sur ses proprietes a tout tiers ayant ou non des liens avec lui.
13.11 Assurance-vie
A maintenir des assurances sur la vie de monsieur Germain Lamonde et de
monsieur Robert Tremblay pour des montants d'au moins 500 000$ chacun;
13.12 Documents additionnels
A signer tout document et poser tout geste requis pour donner effet aux
presentes et a ce qui y est prevu, a ses frais, notamment tout document
requis pour completer ou parfaire les Suretes.
14.- DEFAUTS
14.1 Cas de defaut
Chacun des cas suivants est un cas de defaut;
14.1.1 si l'Emprunteur est en defaut de payer a echeance toute somme
due, a titre de capital, interet ou autre, en vertu de la
presente convention;
14.1.2 si l'Emprunteur est en defaut en vertu de toute Surete ou de
tout engagement pour le benefice des Preteurs conformement aux
dispositions de la presente convention;
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14.1.3 si l'Emprunteur est en defaut de rembourser tout endettement (sous
quelque forme que ce soit) contracte aupres des Preteurs ou de l'un
d'entre eux;
14.1.4 si l'Emprunteur
14.1.4.1 fait cession de son entreprise ou de la totalite ou d'une
partie substantielle de ses biens au benefice de ses
creanciers en general;
14.1.4.2 autrement que dans le cadre d'une reorganisation corporative
autorisee par les Preteurs, procede a la liquidation de son
entreprise ou de la totalite ou d'une partie substantielle
de ses biens ou a la dissolution de son entite corporative;
14.1.4.3 se prevaut d'une loi visant la protection des insolvables ou
d'une loi relative a la reorganisation, l'arrangement, la
liquidation ou autre loi similaire affectant les droits des
creanciers en general;
14.1.4.4 depose une proposition concordataire aux termes de la Loi
sur la faillite et l'insolvabilite ou ne conteste pas, dans
les delais prescrits par la loi, le depot par une tierce
partie d'une requete en faillite aux termes de cette loi;
14.1.4.5 demande la nomination d'un fiduciaire, liquidateur ou
sequestre pour administrer ou liquider son entreprise ou la
totalite ou une partie substantielle de ses biens ou ne
conteste pas, dans les delais prescrits par la loi, le depot
par une tierce partie d'une requete visant telle nomination;
14.1.4.6 est declare failli ou insolvable par un tribunal competent;
14.1.4.7 son entreprise ou la totalite ou une partie substantielle de
ses biens fait l'objet d'une prise de possession par un
creancier ou sont mis sous sequestre ou un liquidateur est
nomme a son egard, pour administrer ou liquider son
entreprise ou la totalite ou une partie substantielle de ses
biens;
14.1.4.8 si l'Emprunteur est en defaut de payer a tout tiers une
dette de plus de 200 000$ qui est exigible ou non contestee
de bonne foi;
14.1.5 si des biens de l'Emprunteur sont saisis et demeurent sous saisie
durant une periode de dix (10) jours dans le cas de biens meubles et
de vingt (20) jours dans le cas de biens immeubles, sauf si cette
saisie fait l'objet d'une contestation de bonne foi et tant que dure
cette contestation;
14.1.6 si un avis d'hypotheque legale est inscrit contre des biens de
l'Emprunteur dans la mesure ou des procedures ne sont pas entreprises
dans les quinze (15) jours suivant l'inscription de tel
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avis d'hypotheque legale pour le faire radier, pour obtenir
quittance du creancier concerne ou pour contester la creance
donnant lieu a l'inscription de telle hypotheque;
14.1.7 si une des declarations faites par l'Emprunteur dans la presente
convention ou si un document ou un renseignement donne ou
remis en execution de la presente convention ou dans le but
d'obtenir les Credits etait errone ou inexact sous quelque
rapport important, de telle sorte que les Preteurs n'auraient
pas prete les montants, prevus au paragraphe 2.1 ou auraient
prete un montant substantiellement moindre ou auraient prete
suivant des termes et conditions differents;
14.1.8 si un autre engagement ou une autre obligation prevus aux
presentes n'est pas respecte et si ce defaut n'est pas corrige
a l'expiration des trois jours ouvrables apres qu'il ait recu
avis de tel defaut par l'Agent;
14.1.9 si un evenement majeur est survenu ou est sur le point de
survenir devant entrainer une deterioration importante de la
situation financiere de l'Emprunteur.
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14.2 Recours au cas de defaut
14.2.1 Advenant Defaut:
14.2.1.1 l'Agent, a la demande unanime des Preteurs, peut
demander le paiement immediat de la totalite ou de
partie de ce qui est du en vertu des presentes et il
y a perte du benefice du terme et les Preteurs
peuvent alors exercer tous leurs recours en vertu de
la loi ou en vertu des presentes ou des documents
auxquels elles referent; et
14.2.1.2 l'Agent, a la demande unanime des Preteurs, peut
mettre fin a certains modes d'utilisation des Credits
ou au droit de l'Emprunteur d'utiliser les Credits ou
de proceder a des conversions ou renouvellements.
14.2.2 Nonobstant les dispositions du sous-paragraphe 14.2.1, l'Agent,
a la demande unanime des Preteurs, pourra en tout temps, sans
prejudice a la faculte des Preteurs d'exercer ulterieurement le
droit ou le recours a leur portee en ce cas, renoncer a un defaut
ou accorder un delai pour y remedier ou prendre toute autre
mesure qui semble dans l'interet des Preteurs ou dans l'interet
de l'Emprunteur.
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14.3 Emploi des sommes percues
Les Preteurs ne sont pas tenus aux regles de l'imputation legale et peuvent selon ce qu'ils determinent et jugent approprie dans leur interet, imputer a leur convenance tout produit net de realisation.
15.- DISPOSITIONS DIVERSES
15.1 Registres et determination
L'Agent tient un dossier faisant etat des transactions effectuees en
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vertu de la presente convention. Ce dossier et les registres de l'Agent font preuve, prima facie, de ces transactions et de la dette due aux Preteurs.
15.2 Debits
L'Agent est autorise a debiter le Compte d'Operations et tout compte maintenu par l'Emprunteur aupres de l'Agent des montants qu'il doit payer aux termes des presentes a titre de capital, d'interets, de commissions, d'honoraires ou de debourses.
15.3 Prohibition de cession
L'Emprunteur ne peut ceder ses droits en vertu de cette convention sans avoir obtenu au prealable l'accord ecrit des Preteurs.
15.4 Participations
Les Preteurs pourront accorder a d'autres institutions financieres des participations dans les Credits, pour partie ou totalite de ceux-ci, par voie de cession, novation ou autrement et reduire ainsi pour autant ou eteindre leur engagement a l'egard de l'Emprunteur. L'Agent, le cas echeant, devra dans tous les cas aviser l'Emprunteur du nom des institutions pressenties comme participants; l'Emprunteur pourra s'objecter pour des motifs raisonnables (tels la protection de son savoir-faire, de sa propriete intellectuelle, de sa strategie, de la confidentialite de donnees financieres ou autres...) a ce qu'une ou des institutions pressenties acquierent une participation. L'Emprunteur convient de remplir toutes ses obligations en vertu des presentes en faveur des participants agrees, dans la mesure de leurs interets, les engagements et Suretes pris ou promis envers les Preteurs devant leur profiter. L'Agent est autorise a donner aux institutions financieres agreees comme participants, sur une base confidentielle, des renseignements sur les Credits et la situation financiere de l'Emprunteur. Les Pretuers pourront par convention avec ces participants etablir leurs relations en rapport avec les Credits.
15.5 Frais
Que les deboursements aient lieu ou non, l'Emprunteur doit payer les frais encourus par l'Agent au titre des honoraires et debourses de ses conseillers juridiques relativement a la presente convention et aux conventions ou documents qui y sont prevus, aux Suretes et a leur inscription, de meme qu'a l'egard de la mise en application de celle-ci, de l'exercice des droits en resultant avant comme apres defaut (y compris la nomination d'un consultant, le cas echeant).
15.6 Absence de renonciation
Le defaut d'une des parties aux presentes d'exercer l'un ou l'autre de ses droits ne comporte pas renonciation a exercer ulterieurement tel droit.
15.7 Jour non ouvrable
Si un paiement doit etre effectue un jour qui n'est pas un Jour Ouvrable, ce paiement peut valablement etre effectue le Jour Ouvrable suivant; le cas echeant, les interets sont calcules en tenant compte de ce delai.
15.8 Indemnisation
15.8.1 Si une loi, un reglement, une directive ou une politique
d'application generale aux institutions financieres
canadiennes, emanant d'une autorite administrative ou d'une
autre institution, ayant force executoire ou a laquelle un
Preteur est tenu pour s'y etre soumis volontairement ou la
creation d'une taxe ou d'un impot autre que sur les revenus
d'un Preteur en general ou une decision d'un tribunal
competent avait pour effet (i) d'augmenter pour un Preteur
le cout des Avances, ou (ii) de reduire pour un Preteur le
revenu ou le rendement lui resultant de ces Avances, ou
(iii) d'augmenter pour un Preteur le cout de la portion non
utilisee des Credits ou (iv) d'obliger un Preteur a payer ou
a percevoir une taxe ou un impot a l'egard des Credits,
l'Agent peut faire parvenir a l'Emprunteur un certificat
signe par un officier autorise du Preteur indiquant le
montant de ce cout additionnel ou de cette reduction de
revenu ou de rendement, et ce qui en est la cause; ce
certificat fait preuve, prima facie, du montant de ce cout
additionnel ou de cette reduction de revenu ou de rendement,
et l'Emprunteur doit, dans les dix (10) jours de la
reception d'un avis a cet effet, payer ce montant a l'Agent
pour le Preteur concerne;
15.8.2 L'Emprunteur doit sur demande payer a l'Agent le montant de
toute perte (incluant tout manque a gagner, frais et
debours) subie par un Preteur et resultant de ce que, pour
quelque motif que ce soit (y compris une demande de paiement
d'un Preteur), les Avances autres que les Avances a Taux de
Base ont ete remboursees ou payees avant l'echeance de leurs
periodes respectives; l'Agent doit faire parvenir a
l'Emprunteur un certificat signe par un officier autorise du
Preteur indiquant le montant de toute perte ainsi subie et
des explications permettant de connaitre la cause de cette
perte; cet etat est repute etre une preuve prima facie du
montant de cette perte et l'Emprunteur doit sans delai payer
ce montant a l'Agent pour le Preteur concerne;
15.8.3. Lorsqu'une Avance porte interet a Taux de Base plus la
majoration applicable s'il y a lieu en vertu de l'une ou
l'autre des dispositions de cette convention, l'Emprunteur
reconnait et convient, que malgre toutes dispositions
inconciliables de cette convention, les interets payables
par l'Emprunteur sont toujours le plus eleve du Taux de Base
plus la majoration applicable ou du CDOR (Canadian Dealers
Offered Rate) majore de 1%.
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16.- L'AGENT |
16.1 Nomination et autorite de l'Agent
Les Preteurs nomment par les presentes BNC a titre d'Agent. Chaque Preteur autorise l'Agent a exercer toute discretion, tous les pouvoirs, toute l'autorite et tous les devoirs conferes en vertu de la presente convention a l'Agent en sa qualite d'Agent, avec tout pouvoir incident a ce qui precede. L'Agent n'aura aucun devoir ni responsabilite autres que ceux expressement enonces a la presente convention et ne sera pas oblige, notamment, de prendre quelque procedure que ce soit contre l'Emprunteur ou toute autre personne ou corporation en vue du recouvrement de toute somme due aux termes de la presente convention.
16.2 Administration des Credits
16.2.1 A moins de disposition expresse de cette convention a
l'effet contraire, l'Agent agira seul dans la gestion
courante de la convention de credit mais devra informer
promptement les autres Preteurs de tout fait, de toute
demande et de toute question d'importance qui surviendrait
ou surgirait pendant sa duree;
16.2.2 L'Agent est en droit de faire usage de sa discretion eu
egard a l'exercice ou a l'abstention d'exercice de tout
droit qui pourrait lui etre confere par la presente
convention ou les documents accessoires a celle-ci, y
compris tout document relatif aux Suretes, a moins que
l'Agent n'ait recu l'instruction unanime des Preteurs
d'exercer ces droits ou de prendre ou de s'abstenir de
prendre cette mesure; toutefois, l'Agent ne se prevaudra
d'aucun droit confere par le paragraphe 14.2 de la presente
convention, sans d'abord le demander aux Preteurs;
16.2.3 L'Agent est, dans tous les cas, entierement protege
lorsqu'il agit ou s'abstient d'agir en vertu de la presente
convention et des documents accessoires a celle-ci, y
compris tout document relatif aux Suretes, conformement aux
instructions unanimes des Preteurs et toute mesure qu'il
prend ou s'abstient de prendre aux termes de ces
instructions a pour effet de lier tous les Preteurs.
16.3 Faits tenus pour averes
L'Agent a le droit de se fier a toute communication ou document qu'il
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croit etre veritable et exact et avoir ete communique ou signe par la personne qui doit le communiquer ou le signer et l'Agent ne sera pas responsable envers aucune des parties aux presentes de toute consequence decoulant du fait qu'il s'est fie a cette communication ou a ce document.
16.4 Exoneration de l'Agent
Ni l'Agent ni ses administrateurs, employes ou agents ne seront tenus responsables pour avoir pris ou omis de prendre des mesures en vertu de la presente convention ou dans le cadre de celle-ci a moins qu'il ne s'agisse d'une negligence grossiere ou d'une inconduite volontaire de leur part. Sauf en cas de negligence grossiere ou d'inconduite volontaire de sa part, l'Agent ne sera pas responsable a l'egard de toute
declaration, representation ou garantie contenue aux presentes ou a l'egard de toute information fournie ou qui sera fournie ulterieurement a l'un quelconque des Preteurs par l'Agent, relativement a l'Emprunteur ou a tout autre sujet se rapportant a la presente convention ou se rapportant a l'execution, a la veracite, a la validite, au caractere executoire ou a la suffisance de la presente convention ou de tout autre document auquel il est fait reference aux presentes non plus qu'a l'egard du recouvrement des Credits (ou de toute partie de ceux-ci) ou a l'egard de toute autre somme a echoir en vertu de cette convention.
16.5 Mandat
Dans l'execution de ses fonctions et devoirs aux termes de la presente convention, l'Agent n'agira qu'a titre d'agent des Preteurs. Ni l'Agent ni aucun des Preteurs ne sera responsable ni tenu responsable de quelque maniere que ce soit envers l'Emprunteur ou l'un des autres Preteurs en raison ou dans le cadre d'un defaut, d'un bris ou d'un delai dans l'execution des obligations respectives leur incombant en vertu de la presente convention par tout autre Preteur ou, le cas echeant, l'Emprunteur.
16.6 Indemnisation
Les Preteurs conviennent d'indemniser l'Agent (dans la mesure ou il n'est pas rembourse par l'Emprunteur) jusqu'a concurrence de leur participation dans les Credits au titre de toutes responsabilites, toutes obligations, toutes pertes, tous dommages, toutes penalites, toutes actions, tous jugements, toutes poursuites, tous frais, tous depens ou tous debours de toute nature ou type que ce soit qui pourraient etre imposes a l'Agent, subis par lui ou adjuges contre lui ayant trait ou decoulant de quelque maniere de ses fonctions d'agent aux termes de la presente convention ou de tout autre document envisage par celle-ci ou de toute action intentee par l'Agent ou qu'il omet d'intenter aux termes de la presente convention ou de tout autre document envisage par celle-ci, sauf qu'aucun Preteur n'est redevable a l'Agent pour toute tranche de ces responsabilites, obligations, pertes, dommages, penalites, actions, jugements, poursuites, frais, depens ou debours resultant de la faute lourde ou de la mauvaise administration deliberee de l'Agent.
16.7 Declaration des Preteurs
Chaque Preteur declare et garantit a l'Agent qu'en prenant sa decision de conclure la presente convention, il a independamment pris toute mesure qu'il considere necessaire pour evaluer la situation financiere et les affaires de l'Emprunteur et qu'il a effectue une evaluation de credit independante sans s'appuyer sur tout renseignement fourni par l'Agent ou par son entremise; et tant que l'un ou l'autre des Credits demeure en cours, il continuera d'effectuer sa propre evaluation independante de la situation financiere et des affaires de l'Emprunteur.
16.8 Transactions de l'Agent
Dans le cadre de sa propre participation dans les Credits, l'Agent aura les memes droits, responsabilites et pouvoirs en vertu de la presente convention que s'il n'agissait pas egalement comme Agent. L'Agent pourra, sans avoir a rendre compte et tout comme s'il n'etait pas l'Agent des Preteurs en vertu des presentes, accepter des depots de l'Emprunteur, lui consentir des prets et traiter avec lui ou pour lui toutes affaires de nature bancaire, fiduciaire ou autre; il en sera de meme pour chaque Preteur
dans la mesure ou il ne contrevienne pas a une restriction ou une prohibition de cette convention, le cas echeant.
16.9 Remplacement de l'agent
L'Agent peut resigner ses fonctions en tout temps en donnant un preavis ecrit de trente (30) jours a cet effet aux Preteurs et a l'Emprunteur. Sa resignation ne prend effet qu'a compter de l'acceptation d'un agent le remplacant. A compter de la nomination de son remplacant, l'Agent sera libere de toute obligation future en vertu des presentes dans son role d'agent et son successeur et chacune des autres parties aux presentes auront les memes droits et obligations entre eux que ceux qu'ils auraient eus si ce successeur avait ete une partie aux presentes aux lieu et place de l'Agent resignataire. L'Agent resignataire transferera a son successeur tous les registres que ce dernier pourra raisonnablement exiger afin d'executer ses fonctions.
16.10 Modifications
Toute condition, tout engagement, toute convention ou toute modalite contenue dans la presente convention ou dans les documents qui seront signes, le cas echeant, conformement aux dispositions du paragraphe 2.8 peut etre modifie avec le consentement de l'Emprunteur et des Preteurs, et cette modification a pour effet de lier l'Emprunteur et les Preteurs, ou il peut etre renonce au respect de celle-ci (soit de maniere generale ou dans un cas particulier et soit de maniere retroactive ou prospective) du consentement unanime des Preteurs.
16.11 Presomption de paiement
A moins d'avoir recu, un (l) Jour Ouvrable avant la date ou un paiement doit etre effectue, un avis ecrit de l'Emprunteur a l'effet que celui-ci n'effectuera pas tel paiement, l'Agent peut presumer que tel paiement sera effectue et faire remise aux Preteurs, a la date prevue pour le paiement, de la part qui leur revient. Si le paiement prevu n'est pas effectue par l'Emprunteur, les Preteurs devront, immediatement sur demande de l'Agent, rendre a celui-ci ce qui leur a ete ainsi remis, avec interet au taux determine par l'Agent en fonction de ses pratiques bancaires usuelles mais n'excedant pas le taux interbancaire usuel offert pour la vente de depots en Dollars Canadiens ou en Dollars Americains selon le cas.
16.12 Presomption de prestation
A moins d'avoir recu, un (l) Jour Ouvrable avant la date ou un Preteur doit fournir sa prestation, un avis ecrit de ce Preteur a l'effet que celui-ci n'effectuera pas sa prestation aupres de l'Agent, l'Agent peut presumer que telle prestation sera effectuee et, a la date prevue, donner effet a un tirage de l'Emprunteur pour le plein montant requis. Si la prestation concernee n'est pas effectuee par un Preteur, celui-ci devra immediatement sur demande de l'Agent, rendre ou effectuer sa prestation, avec interet au taux determine par l'Agent en fonction de ses pratiques bancaires usuelles mais n'excedant pas le taux interbancaire usuel offert pour la vente de depots en Dollars Canadiens ou en Dollars Americains selon le cas.
17.- MODALITES ENTRE LES PRETEURS
17.1 Rang des Suretes
Les Suretes beneficient aux Preteurs, en proportion de leur
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Engagement, nonobstant toute priorite d'enregistrement, de publication, de date ou resultant de quelque situation de fait ou de droit que ce soit. Aucun Preteur ne peut requerir ni obtenir pour son seul benefice des garanties ni des suretes additionnelles en vue de garantir l'un ou l'autre des Credits.
17.2 Concertation
Au cas de defaut de l'Emprunteur et sur toute question requerant leur consentement, les Preteurs conviennent de se concerter quant a toute mesure et toute decision a prendre.
17.3 Au cas de desaccord
Advenant desaccord entre les Preteurs sur les mesures et les decisions requerant leur consentement respectif, notamment en cas de defaut de l'Emprunteur, un Preteur peut, sans y etre tenu, aviser l'autre Preteur de sa decision de racheter la creance de ce Preteur en vertu des Credits et a defaut par ce Preteur d'aviser dans les cinq (5) Jours Ouvrables le Preteur emetteur de l'avis qu'il entend lui-meme racheter la creance du Preteur emetteur de l'avis et de completer ce rachat dans les trois (3) Jours Ouvrables suivants, il est tenu de vendre sa creance en vertu des Credits au Preteur emetteur de l'avis qui doit completer l'achat et en payer le prix dans les trois (3) Jours Ouvrables suivants. Le rachat d'une creance en vertu de ce paragraphe s'effectue sans escompte ni prime.
18.- AVIS
18.1 Envoi
Sauf indication contraire, tout avis qu'une partie doit donner a une
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autre est donne par ecrit, soit en le livrant, soit en l'expediant par courrier recommande ou en le transmettant par telecopieur a l'adresse mentionnee a la premiere page de cette convention ou a toute autre adresse qui pourrait etre notifiee par une partie a l'autre conformement au present article 18.
18.2 Reception
Un avis est presume avoir ete recu par son destinataire au moment de sa livraison, s'il est livre un Jour Ouvrable, ou le troisieme (3e) Jour Ouvrable apres sa mise a la poste, s'il est expedie par courrier recommande, ou, lorsque livre ou lorsque transmis par telecopieur, le jour de sa livraison ou de sa transmission, s'il est livre ou transmis a compter de 15h00. Si un mode d'envoi etait interrompu par une greve, un ralentissement de travail, une force majeure ou une autre cause (ou etait menace de l'etre), la partie donnant l'avis doit utiliser un mode d'envoi dont les services ne sont pas interrompus ou elle doit faire livrer l'avis en question, le tout de facon a faire en sorte que l'avis puisse etre recu par son destinataire.
19.- PERENNITE DES SURETES
Aucune Surete ni aucun acte constitutif d'une Surete n'est affecte de quelque facon du fait que les Avances en vertu de l'un ou l'autre des Credits fasse l'objet d'un renouvellement, d'une reutilisation ou d'une conversion en vertu de l'un ou l'autre des modes prevus a cette convention ou permis par les Preteurs.
20.- DOCUMENTS ADDITIONNELS
Les parties a cette convention s'engagent les unes envers les autres a poser tout acte, faire toute chose, signer et delivrer tous documents necessaires ou utiles pour donner pleinement effet a cette convention ou pour en respecter un engagement immediat ou a terme.
ET LES PARTIES ONT APPOSE LEUR SIGNATURE:
BANQUE NATIONALE DU CANADA, a titre de Preteur
par: /s/ Gilles Martin
-----------------------------------------
Gilles Martin
|
BANQUE NATIONALE DU CANADA, a titre d'Agent
par: /s/ Pierre Dubreuil
-----------------------------------------
Pierre Dubreuil
|
SOCIETE GENERALE (CANADA)
par: /s/ Jean-Claude Pepin
-----------------------------------------
Jean-Claude Pepin
|
et
par: /s/ Gaetan Gauthier
-----------------------------------------
Gaetan Gauthier
|
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
par: /s/ Germain Lamonde
-----------------------------------------
Germain Lamonde
|
et
par: /s/ Robert Tremblay
-----------------------------------------
Robert Tremblay
|
DEMANDE D'UTILISATION
(Preciser la date de la demande d'utilisation)
A. BANQUE NATIONALE DU CANADA
5800, Boul. des Galeries,
Bureau 2000
Quebec, (Quebec)
G2K 2K7
(a l'attention du directeur de comptes responsable, nommement designe)
OU
(DANS LE CAS SEULEMENT DE DEMANDE D'EMISSION DE CREDITS DOCUMENTAIRES OU DE
CONTRATS DE CHANGE A TERME)
A. SOCIETE GENERALE (CANADA)
401, Grande-Allee est
Quebec, (Quebec)
G1R 2J5
(a l'attention du directeur de comptes responsable, nommement designe)
Nous vous soumettons la demande d'utilisation suivante conformement aux dispositions de la convention de credit intervenue le 6 juillet 1995 entre Banque Nationale du Canada et Societe Generale (Canada) a titre de Preteurs et la soussignee a titre d'Emprunteur (la "Convention de Credit"):
1. Credit vise par cette demande d'utilisation: (preciser s'il s'agit du Credit A, B ou C)
2. Nature de la demande: (preciser s'il s'agit d'un tirage d'Avances, d'une conversion d'Avances deja deboursees, de l'emission d'un credit documentaire ou d'un contrat de change a terme)
3. (selon le cas) - Montant de l'Avance;
- terme souhaite;
- mode souhaite de fixation du taux d'interet;
4. date effective souhaitee: (preciser)
5. (preciser tout autre detail pertinent)
Au meilleur de notre connaissance, la soussignee n'est pas en defaut en vertu de la Convention de Credit.
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par:
CONVENTION DE CESSION ET DE PRISE EN CHARGE
entre
SOCIETE GENERALE (CANADA)
a titre de Cedant
et
BANQUE NATIONALE DE PARIS (CANADA)
a titre de Cessionnaire
et
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
a titre d'Emprunteur
et
BANQUE NATIONALE DU CANADA
a titre d'Agent
En date du 22 decembre 1999
CONVENTION DE CESSION ET DE PRISE EN CHARGE reputee intervenue a Sainte-Foy, province de Quebec, en date du 22 decembre 1999.
ENTRE: SOCIETE GENERALE (CANADA), personne morale regie par la Loi sur les
banques, ayant son siege a Montreal et une place d'affaires au 401,
Grande Allee est, Quebec, province de Quebec, G1R 2J5, ici representee
par monsieur Francis Champigny, directeur principal, et monsieur Real
Pare, directeur principal, dument autorises ainsi qu'ils le declarent;
(A titre de "Cedant")
ET: BANQUE NATIONALE DE PARIS (CANADA)., personne morale regie par la Loi
sur les Banques, ayant son siege a Montreal et une place d'affaires
au 925, Chemin St-Louis, bureau 350, Quebec, province de Quebec, G1S
1C1, ici representee par madame Diane Lapointe, directeur de credit,
et monsieur Bernard Kennepohl, vice-president directeur, dument
autorises ainsi qu'ils le declarent;
(A titre de "Cessionnaire")
ET: EXFO INGENIERIE ELECTRO-OPTIQUE, INC., (anterieurement connue sous la
denomination Ingenierie Electro-Optique Exfo Inc.), personne morale
constituee en vertu de la Loi canadienne sur les societes par
actions, ayant son siege au 465, Avenue Godin, Vanier, province de
Quebec, G1M 3G7, ici representee par monsieur Germain Lamonde,
president, dument autorise ainsi qu'il le declare;
(A titre d' "Emprunteur")
ET: BANQUE NATIONALE DU CANADA, service a la syndication (Canada) ici
representee par madame Myriam Baudot, directrice principale
syndication et madame Martine Coulombe, directrice syndication,
dument autorisees ainsi qu'elles le declarent;
(A titre d' "Agent")
|
ATTESTE CE QUI SUIT:
ATTENDU QU'une convention de credit a ete conclue le 6 juillet 1995 (la "Convention de Credit") entre Exfo Ingenierie Electro-Optique Inc. (alors connue sous la denomination
Ingenierie Electro-Optique Exfo Inc.), a titre d'Emprunteur d'une part, et Banque Nationale du Canada et Societe Generale (Canada) a titre de preteurs (les "Preteurs") et Banque Nationale du Canada, a titre d'Agent, aux termes de laquelle une marge de credit d'exploitation de DIX MILLIONS DE DOLLARS (10 000 000$) et un credit special "Evergreen" de TROIS MILLIONS DE DOLLARS (3 000 000$) (ces credits etant designes collectivement le "Credit Total") ont ete mis a la disposition de l'Emprunteur;
ATTENDU QUE Societe Generale (Canada), a titre de Preteur, detient une participation de 6 500 000$ (le "Pret") dans le Credit Total;
ATTENDU QUE Societe Generale (Canada), en tant que Preteur, desire se prevaloir de ses droits aux termes du paragraphe 15.4 de la Convention de Credit et ainsi vendre, ceder, transporter et transferer en faveur de Banque Nationale de Paris (Canada), a titre de Cessionnaire, la totalite des droits et obligations du Cedant dans le Pret afin que Banque Nationale de Paris (Canada), a titre de Cessionnaire, soit aux droits et aux obligations du Cedant pour la moitie du Credit Total, le tout suivant les conditions enoncees aux presentes.
PAR CONSEQUENT, POUR BONNE ET VALABLE CONSIDERATION, ENTRE LE CEDANT ET LE CESSIONNAIRE, DONT LE CEDANT ACCUSE RECEPTION, LES PARTIES CONTRACTANTES CONVIENNENT DE CE QUI SUIT:
ARTICLE 1
1.1 Integration des definitions se trouvant dans la Convention de Credit. Les expressions et mots utilises dans la presente Convention ou dans tout acte, document ou convention supplementaire ou accessoire aux presentes, a moins d'etre definis autrement dans la presente ou a moins d'incompatibilite avec l'objet ou le contexte, ont la signification qui leur est donnee dans la Convention de Credit.
1.2 Definitions. Les expressions et mots suivants, lorsqu'employes dans la presente Convention ou dans tout acte, document ou convention supplementaire ou accessoire aux presentes, a moins d'incompatibilite avec l'objet ou le contexte, sont definis comme suit:
1.2.1. "Cedant" designe Societe Generale (Canada) et comprend tout successeur ou cessionnaire autorise de celle-ci;
1.2.2. "Cessionnaire" designe Banque Nationale de Paris (Canada) et comprend tout successeur ou cessionnaire autorise de celle-ci;
1.2.3. "Convention de Credit" a le sens qui lui est attribue dans le premier paragraphe du preambule de la presente Convention;
1.2.4. "Date Effective" designe la date qui est mentionnee a l'annexe 4.1 jointe a la presente Convention;
1.2.5. "Documents" a le sens qui lui est attribue au sous-paragraphe 2.1.2;
1.2.6. "Documents de Surete" designe a la fois les suretes et les actes constitutifs des suretes afferentes au Credit Total ou a l'un ou l'autre des credits constituant le Credit Total;
1.2.7. "Elements d'Actif Cedes" renvoie collectivement a tout ce que le Cedant vend, cede, transporte et transfere en faveur du Cessionnaire aux termes du paragraphe 2.1 des presentes;
1.2.8. "la presente Convention", "les presentes", "aux presentes", "par les presentes", "aux termes de la presente", "des presentes" et autres expressions similaires renvoient collectivement a la presente convention de cession et de prise en charge et comprennent tous et chacun des actes ou documents supplementaires ou accessoires aux presentes ou faits pour parfaire les presentes;
1.2.9. "Tranche Cedee" designe 100% du Pret.
1.3. Preambule. Le preambule de la presente Convention en fait partie integrante tout comme s'il y etait enonce au long.
ARTICLE 2
VENTE, CESSION, TRANSPORT ET TRANSFERT
2.1 Vente, Cession, Transport et Transfert par le Cedant. Le Cedant vend, cede, transporte et transfere, a la Date Effective, au Cessionnaire qui l'accepte, ce qui suit:
2.1.1 la Tranche Cedee de meme que tous les droits, titres et interets
du Cedant qui en decoulent, y compris, sans limitation, le droit
actuel et continu de reclamer, recouvrer et recevoir la Tranche
Cedee;
2.1.2 les charges et autres droits, recours et benefices crees et qui
visent a etre crees en faveur du Cedant, que ce soit directement
ou a titre de beneficiaire, aux termes de la Convention de
Credit, des Documents de Surete et des contrats, conventions,
actes et documents afferents (ci-apres designes collectivement
les "Documents"), de meme que tous les droits, titres et interets
du Cedant aux termes de ces charges, droits, recours et
benefices, y compris, sans limitation, le droit actuel et continu
de reclamer, recouvrer et recevoir ces charges, droits, recours
et benefices;
|
2.1.3 tous les avis motives et attestations de conseillers
juridiques, ingenieurs, experts et autres professionels emis
aux termes des ou par ailleurs envisages par les dispositions
des Documents et tous les droits, titres et interets du
Cedant eu egard a ces dits avis motives et attestations;
2.1.4 les produits des polices d'assurance payables au Cedant avant
la date des presentes, en ce qui a trait a tout bien ou actif
de l'Emprunteur qui est greve aux termes des Suretes creees
dans les Documents.
|
2.2 Prix de Vente. La vente qui intervient aux termes du paragraphe 2.1 constitue la contrepartie du prix de vente etabli par le Cedant et le Cessionnaire et verse par le Cessionnaire au Cedant a la Date Effective. Le Cedant et le Cessionnaire reconnaissent que tous les ajustements doivent etre effectues a la Date Effective a leur entiere satisfaction.
2.3 Absence de Garantie. Sous reserve des declarations faites et des garanties donnees par le Cedant au Cessionnaire aux termes de l'Article 4, la vente intervenue aux termes du paragraphe 2.1 n'est assortie d'aucune autre garantie, legale ou contractuelle, quelle qu'elle soit, le Cessionnaire acceptant les Elements d'Actif Cedes a ses propres risques.
2.4 Prise en charge des Obligations par le Cessionnaire. Le Cedant requiert par les presentes que le Cessionnaire prenne en charge, et le Cessionnaire y consent, a l'exoneration entiere du Cedant, la Tranche Cedee et toutes les autres obligations du Cedant aux termes des Documents et le Cessionnaire convient d'etre lie par tous les termes et conditions des Documents aussi pleinement que s'il avait ete partie contractante initiale a la Convention de Credit et a chacun des Documents de Surete auxquels le Cedant est partie, directement ou par l'entremise de l'Agent, ou a l'egard desquels le Cedant s'est engage ou est tenu responsable, directement ou par l'entremise de l'Agent.
2.5 Acceptation et Reconnaissance par l'Emprunteur. L'Emprunteur:
2.5.1 consent a et accepte la vente, cession, transport et transfert
des Elements d'Actif Cedes effectues par le Cedant en faveur
du Cessionnaire aux termes du paragraphe 2.1;
2.5.2 consent a et accepte la prise en charge par le Cessionnaire de
toutes les obligations du Cedant enoncees au paragraphe 2.4,
libere le Cedant et lui donne quittance finale a l'egard de
telles obligations. Cette liberation et quittance prend effet
a la Date Effective;
2.5.3 reconnait et convient expressement que toutes les sommes
d'argent avancees par le Cessionnaire a l'ordre de ou pour le
compte de l'Emprunteur en consequence de la prise en charge
par le Cessionnaire des obligations du Cedant enoncees au
paragraphe 2.4 constituent des Avances aux termes de la
|
Convention de Credit; de plus, le Cessionnaire:
2.5.3.1 a droit aux benefices des dispositions des Documents
tout aussi pleinement que s'il avait ete une partie
contractante initalement a la Convention de Credit et a
chacun des Documents de Surete; et
2.5.3.2 peut exercer, en conformite avec les dispositions de la
Convention de Credit, tous et chacun des droits de
compensation en ce qui a trait a toutes et chacune des
sommes dues par l'Emprunteur au Cessionnaire a titre de
cessionnaire relativement aux Avances prealablement
faites par le Cedant et vendues, cedees, transportees
et transferees aux termes des presentes.
|
2.5.4 accuse reception de la presente Convention.
2.6 Acceptation et reconnaissance par l'Agent. Par les presentes, l'Agent:
2.6.1 consent a et accepte la vente, cession, transport et transfert
des Elements d'Actif Cedes effectue par le Cedant en faveur du
Cessionnaire aux termes du paragraphe 2.1;
2.6.2 se declare satisfait quant a la forme et au fond de la presente
Convention.
|
2.7 Ratification de la nomination de l'Agent par le Cessionnaire. Le Cessionnnaire ratifie la nomination de l'Agent et autorise irrevocablement l'Agent a prendre toute mesure en sa qualite d'Agent pour son compte et a exercer tous les pouvoirs aux termes des Documents et chacun d'eux qui sont delegues a l'Agent suivant les conditions de ceux-ci de meme que les pouvoirs qui sont raisonnablement incidents a ceux-ci.
2.8 Signature de Documents Supplementaires. Les parties aux presentes conviennent de faire et signer ou voir a ce que soient faits et signes a l'occasion et aussi souvent que requis, tout document ou ecrit et de faire et poser ou voir a ce que soient faits et poses tous autres actes ou choses que l'une quelconque des parties peut raisonnablement demander pour donner effect a la presente Convention ou a toutes autres fins.
ARTICLE 3
LES DOCUMENTS
3.1 Dispositions des Documents s'appliquant au Cessionnaire. Sans nullement restreindre la generalite de toute autre disposition des presentes, l'Emprunteur et Banque Nationale du Canada, en sa qualite d'Agent des Preteurs, reconnaissent, declarent et conviennent expressement par les presentes que toutes les dispositions des Documents relatifs aux Preteurs ou a un Preteur et referant a ceux-ci s'appliquent au Cessionnaire de la meme maniere et dans la meme mesure que si le Cessionnaire avait ete une partie contractante initialement. Par sa signature des presentes, le Cessionnaire accepte le benefice de ce qui
precede et reconnait, declare et convient qu'il est lie par toutes les dispositions precitees des Documents et qu'elles s'appliquent a son egard aussi pleinement que s'il avait ete une partie contractante initialement aux Documents.
3.2 Reconnaissances par l'Emprunteur. L'Emprunteur reconnait, declare, convient et confirme expressement que le Cessionnaire, par l'entremise de la designation de l'Agent a titre d'agent des Preteurs dans chacun des Documents de Surete, est, et est reconnu, pour toutes les fins des Documents de Surete comme le beneficiaire et le titulaire des charges y creees pour une somme n'excedant pas la quote-part du Cessionnaire relativement au Credit Total, conjointement avec les Preteurs, aussi pleinement que si le Cessionnaire avait ete une partie contractante initialement a ces Documents de Surete.
ARTICLE 4
DECLARATIONS ET GARANTIES
4.1 Declarations et Garanties du Cedant. Le Cedant declare et garantit au Cessionnaire qu'a la Date Effective, avant de donner effet a la presente cession, le Pret du Cedant aux termes de la Convention de Credit et des autres Documents s'etablit comme detaille a l'Annexe 4.1.
4.2 Declarations Relatives aux Cessions Anterieures. Nonobstant les dispositions du paragraphe 2.3, le Cedant declare et garantit au Cessionnaire qu'il n'a pas conclu de vente, de cession, de transport ou de transfert de l'un ou l'autre des Elements d'Actif Cedes ou de l'un ou l'autre de ses droits, titres ou interets vis-a-vis des Elements d'Actif Cedes, ou de toute partie de ceux-ci. Le Cedant declare et garantit egalement qu'il n'a accorde de participations relativement a toute ou partie des Elements d'Actifs Cedes qui seraient encore en vigueur, ni n'a accompli d'actions ni signe de documents qui pourraient empecher le Cessionnaire d'agir aux termes de la presente Convention ou des Documents.
4.3 Absence de Declarations Supplementaires. Sauf stipulation expresse contraire aux presentes, le Cessionnaire confirme que la presente Convention est conclue par lui sans declarations ou garanties de la part du Cedant, de l'Agent ou de l'Emprunteur sur toute question que ce soit, incluant sans limitation, le caractere effectif, la validite, la legalite, l'opposabilite, la conformite ou l'exhaustivite des Documents ou de tout autre document livre aux termes de l'un ou l'autre d'entre eux ou relativement a l'un ou l'autre des termes, engagements et conditions qui s'y trouvent, ni sur la situation financiere, la solvabilite, l'etat ou les affaires, le statut ou la nature de l'Emprunteur. Le Cessionnaire confirme qu'il ne s'est fonde que sur ses propres recherches et analyses relatives a toutes ces questions et autres questions accessoires a la presente Convention et aux Documents et aux operations envisagees dans l'un ou l'autre d'entre eux et aux presentes et le Cessionnaire confirme qu'il ne s'est nullement fonde, de quelque facon que ce soit, ni ne se fondera ulterieurement, sur le Cedant, l'Agent ou l'Emprunteur relativement a l'une ou l'autre de telles questions.
4.4 Declarations du Cessionnaire. Le Cessionnaire declare de plus et garantit qu'en date des presentes i) il est un resident canadien au sens de la Loi de l'Impot sur le Revenu (Canada) et ii) aux termes des lois applicables, aucun d'entre l'Agent, l'Emprunteur ou le Cedant ne sera oblige de retenir des impots relativement a un paiement a etre fait au Cessionnaire.
ARTICLE 5
GENERALITES
5.1 Droits des autres Preteurs non affectes. Rien dans les presentes ne doit etre interprete comme affectant ou diminuant de quelque facon que ce soit l'un ou l'autre des droits, titres, interets, pouvoirs et recours de l'un ou l'autre des Preteurs autres que le Cedant, relativement au Credit Total ou a tous autres droits, titres, interets, pouvoirs et recours que ces autres Preteurs pourraient detenir aux termes des, ou relativement aux Documents ou de tout autre document qui est mentionne dans l'un ou l'autre d'entre eux: de plus, la vente, cession, transport et transfert des Elements d'Actif Cedes qui est effectue aux termes du paragraphe 2.1 que ce soit directement ou indirectement, ne constitue une vente, une cession, un transport ou un transfert de tout droit, titre, interet que l'un ou l'autre des Preteurs pourrait posseder dans l'un ou l'autre des Elements d'Actif Cedes.
5.2 Exemplaires et predominance du francais. La presente Convention peut etre signee en un nombre indetermine d'exemplaires, dont chacun est repute constituer un original, mais dont la totalite des exemplaires distincts constitue un seul et meme document.
5.3 Lois d'application. La presente Convention, son interpretation et son application sont regies par les lois de la province de Quebec et les lois du Canada qui y sont applicables.
5.4 Disjonction. Toute disposition de la presente Convention qui est interdite ou inoperante dans un terriroire quelconque ne produit pas ses effets dans ce territoire dans la mesure de cette interdiction ou de ce caractere inoperant, sans pour autant invalider les dispositions restantes de la presente Convention pour ce qui est de ce terriroire, ni diminuer la validite ou l'applicabilite de cette disposition dans un autre territoire.
5.5 Novation. La presente Convention ne constitue pas un paiement ni n'opere novation de toutes sommes exigibles aux termes de la Convention de Credit et n'a pas pour effet d'indemniser, de compenser, de creer la confusion ou la consolidation de toute dette ou tout element de passif de l'Emprunteur ou de toute personne ou personnes vis-a-vis du Cessionnaire, aux termes de tout acte, garantie, contrat, lettre de change, billet a ordre, lettre de credit, certificat de depot ou autre effet par lequel ces documents peuvent maintenant ou par la suite en tout temps etre representes ou presentes en preuve.
EN FOI DE QUOI, les parties contractantes ont signe la presente Convention a la date mentionnee en premier lieu dans la presente Convention.
SOCIETE GENERALE (CANADA)
a titre de Cedant
Par:/s/ Francis Champigny
----------------------
Francis CHAMPIGNY
Par:/s/ Real Pare
----------------------
Real PARE
|
BANQUE NATIONALE DE PARIS (CANADA)
a titre de Cessionnaire
Par:/s/ Diane Lapointe
----------------------
Diane LAPOINTE
Par:/s/ Bernard Kennepohl
----------------------
Bernard KENNEPOHL
|
BANQUE NATIONALE DU CANADA
a titre d'Agent
Par:/s/ Myriam Baudot
----------------------
Myriam BAUDOT
Par:/s/ Martine Coulombe
----------------------
Martine COULOMBE
|
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
a titre d'Emprunteur
Par:/s/ Germain Lamonde
----------------------
Germain LAMONDE
|
ANNEXE 4.1
POSITION EN DATE DU : 22 DECEMBRE 1999.
----------------------------------------------------------------------------------------------------------------------------------
CREDIT A
----------------------------------------------------------------------------------------------------------------------------------
AVANCES A TAUX INTERETS SUR AVANCES A TAUX INTERETS SUR LETTRES DE CREDIT
DE BASE CA. AVANCES A TAUX DE BASE US. AVANCES A TAUX ET GARANTIE US.
DE BASE CAN DE BASE US.
----------------------------------------------------------------------------------------------------
SOCIETE GENERALE (CANADA) $910 000,00 CAN. $7 734,98 CAN. $60 000,00 US. $377,25 US. $13 146,90 US.(1)
$242,00 US.(2)
$12 500,00 US.(3)
$1 166,00 US.(4)
$2 182,50 US.(5)
$8 282,41 US.(6)
SOUS TOTAL $37 519,81 US.
----------------------------------------------------------------------------------------------------------------------------------
TOTAL DES PRETEURS $3 000 000,00 CAN. $60 000,00 US. $75 039,63 US.
----------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------
CREDIT B
-------------------------------------------------------------------
UTILISATIONS FRAIS D'ATTENTE
-------------------------------------
SOCIETE GENERALE (CANADA) $0,00 CAN. $852,41 CAN.
-------------------------------------------------------------------
TOTAL DES PRETEURS $0,00 CAN. $1 704,82 CAN.
-------------------------------------------------------------------
|
BENEFICIAIRES DATES D'ECHEANCE MONTANT TOTAL
------------- ---------------- -------------
(1) INTERNATIONAL TENDERING COMPANY OF CHINA NATIONAL INSTRUMENTS IMPORT AND EXPORT 30 DECEMBRE 1999 $26 293,80 US.
(2) OMAN FIBER OPTIC 28 FEVRIER 2000 $484,00 US.
(3) EGYPT TELECOM 20 FEVRIER 2000 $25 000,00 US.
(4) KOREA ELECTRIC POWER (KEPCO) 11 JANVIER 2002 $2 332,00 US.
(5) KOREA ELECTRIC POWER (KEPCO) 12 FEVRIER 2001 $4 365,00 US.
(6) BANCO DE COSTA RICA 1 MAI 2000 $18 564,83 US.
--------------
$75 039,63 US.
|
TAUX DE CHANGE US. DU 22 DECEMBRE 1999: 1.4765.
PREMIER ADDENDUM A LA CONVENTION DE CREDIT DU 6 JUILLET 1995
ENTRE: BANQUE NATIONALE DU CANADA ("BNC"), ayant son siege a Montreal et une
place d'affaires au 5800, Boul, des Galeries, bureau 200, Quebec,
province de Quebec, G2K 2K7, ici representee par monsieur Alain
Gallichan, directeur de comptes, et madame Sylvie Pelletier, agent de
comptes, dument autorises ainsi qu'ils le declarent;
ET: BANQUE NATIONALE DE PARIS (CANADA) ("BNP") personne morale regie par la
Loi sur les Banques, ayant son siege social a Montreal et une place
d'affaires au 925, Chemin St-Louis, bureau 350, Quebec, province de
Quebec, G1S 1C1, ici representee par madame Diane Lapointe, directeur
de credit, et monsieur Bernard Kennepohl, vice-president directeur ,
dument autorises ainsi qu'ils le declarent;
ET: EXFO INGENIERIE ELECTRO-OPTIQUE INC. (anterieurement connue sous la
denomination Ingenierie Electro-Optique Exfo Inc.) (l'"Emprunteur"),
personne morale constituee en vertu de la Loi canadienne sur les
societes par actions, ayant son siege au 465, avenue Godin, Vanier
(Quebec), G1M 3G7, ici representee par monsieur Germain Lamonde,
president, dument autorise en vertu d'une resolution des
administrateurs adoptee en date de ce jour.
ET: BANQUE NATIONALE DU CANADA (a titre d'Agent), ici representee par
madame Myriam Baudot, directrice principale Syndication et madame
Martine Coulombe, directrice Syndication, dument autorisees ainsi
qu'elles le declarent;
|
i) QU'une convention de credit est intervenue le 6 juillet 1995 (la "Convention de Credit") entre d'une part BNC et Societe Generale (Canada) a titre Preteurs et l'Emprunteur prevoyant l'octroi a l'Emprunteur d'une marge de credit d'exploitation jusqu'a hauteur de DIX MILLIONS DE DOLLARS (10 000 000$) et d'un credit special "Evergreen" jusqu'a hauteur de TROIS MILLIONS DE DOLLARS (3 000 000$);
ii) QUE BNP est aux droits et obligations de SGC a titre de preteur a la Convention de Credit en vertu d'une convention de cession et de prise en charge intervenue le 21 decembre 1999; et
iii) QUE les Preteurs et l'Emprunteur desirent par ce premier addendum a la Convention de Credit (le "Premier Addendum") apporter certains amendements a la Convention de Credit.
LES PRETEURS ET L'EMPRUNTEUR CONVIENNENT DE CE QUI SUIT:
1. DISPOSITIONS INTERPRETATIVES
1.1 Sauf derogation expresse ou a moins d'incompatibilite avec le contexte, les mots et les expressions utilises dans ce Premier Addendum ont, lorsque defini dans la Convention de Credit, le sens et la portee que leur donne cette derniere;
1.2 Aucun novation
Ce Premier Addendum n'opere pas novation de quelqu'obligation des Preteurs ou de l'Emprunteur en vertu de la Convention de Credit;
1.3 Validite des obligations executees
Aucune disposition de ce Premier Addendum ne doit etre interpretee comme affectant la validite des obligations executees en conformite de la Convention de Credit avant la signature de ce Premier Addendum;
1.4 Preambule
Le preambule fait partie integrante de ce Premier Addendum.
2. PROLONGATION DE LA PERIODE DE CONVERSION
2.1 Confirmation
Suite aux reconductions accordees a l'Emprunteur depuis la signature de la Convention de Credit, la Periode de Conversion expire le 31 decembre 2000. Le paragraphe 1.1.34 de la Convention de Credit est repute amende an consequence.
3. REDUCTION DU TERME AUTORISE DU CREDIT C
3.1 Modalites
Advenant que l'Emprunteur se prevale du droit de convertir les Avances
en vertu du Credit B en Avances en vertu du Credit C conformement au
paragraphe 10.2 de la Convention de Credit, l'echeance que peut alors
choisir l'Emprunteur peut etre de un (1) a trois (3) ans au lieu de un
(1) a cinq (5) ans tel qu'actuellement prevu au paragraphe 10.3.
Consequemment, le paragraphe 10.3 est amende pour remplacer, a la
neuvieme ligne, le chiffre <<5>> par le chiffre <<3>>, et pour
remplacer, a la onzieme ligne, le chiffre <<cinq (5)>> par le chiffre
trois <<3>>.
4. DISPOSITIONS FINALES
4.1 Portee de ce Premier Addendum
Sous reserve des ajouts et des amendements apportes par ce Premier Addendum ou en decoulant necessairement, toutes les autres dispositions de la Convention de Credit ainsi que les actes constitutifs des Suretes demeurent pleinement en vigueur;
4.2 Engagement a parfaire
Les parties s'engagent les unes envers les autres a consentir tous les actes et a faire toutes les choses necessaires pour donner pleinement effet aux dispositions de ce Premier Addendum.
ET LES PARTIES APPOSENT LEUR SIGNATURE A CE PREMIER ADDENDUM, REPUTE SIGNE A SAINTE-FOY EN DATE DU 22 DECEMBRE 1999.
BANQUE NATIONALE DU CANADA, a titre de Preteur Par:
/s/ Alain Gallichan
----------------------
Alain GALLICHAN
/s/ Sylvie Pelletier
----------------------
Sylvie PELLETIER
|
BANQUE NATIONALE DU CANADA, a titre d'Agent Par:
/s/ Myriam Baudot
----------------------
Myriam BAUDOT
/s/ Martine Coulombe
----------------------
Martine COULOMBE
|
BANQUE NATIONALE DE PARIS (CANADA)
Par:
/s/ Diane Lapointe
----------------------
Diane LAPOINTE
/s/ Bernard Kennepohl
----------------------
Bernard KENNEPOHL
|
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Par:
/s/ Germain Lamonde
----------------------
Germain LAMONDE
|
[BANQUE NATIONALE DU CANADA LOGO]
CREDIT, GARANTIE, HYPOTHEQUE, QUITTANCE
ET AUTRES SUJETS CONNEXES
RESOLUTION No 4 DE LA BANQUE NATIONALE DU CANADA, consituee en vertu de la Loi sur les banques, ayant son siege social au 600, rue de La Gauchetiere Quest, Montreal, H3B 4L2.
Extrait du proces-verbal d'une seance du conseil d'administration de la Banque Nationale du Canada, tenue le 28 octobre 1999.
IL EST UNANIMEMENT RESOLU QUE:
1) Les fondes de pouvoir identifies au paragraphe 3 a) et b) puissent agir seuls pour exercer les pouvoirs conferes par le present paragraphe, a condition que la valeur de la transaction initiale soit inferieure a deux cent cinquante mille dollars (250 000$). Lorsque cette valeur est egale ou superieure a deux cent cinquante mille dollars (250 000$), ou encore en l'absence de valeur determinee, deux des fondes de pouvoir identifies au paragraphe 3 a) ou l'un des fondes de pouvoir identifies au paragraphe 3 b) avec un des fondes de pouvoir identifies au paragrahe 3 a) doivent agir conjointement pour engager valablement la Banque.
Par consequent, et selon les regles etablies ci-dessus, les fondes de pouvoir peuvent et ils sont par les presentes autorises, pour et au norm de la Banque Nationale du Canada, a;
-CONSENTIR, avec ou sans consideration, toute priorite, cession de rang, subrogation, transfert, limitation, liberation, quittance, mainlevee ou radiation d'hypotheque, de droit hypothecaire ou de tout autre droit quelconque, reel ou personnel, mobilier ou immobilier;
-EFFECTUER des compromis et liberer des debiteurs ou cautions;
-CONSENTIR, en autant que la Banque est creanciere hypothecaire, a tout acte constitutif de servitudes ou d'autres droits reels ou personnels, a toute declaration de copropriete ainsi qu'a toute subdivision, annulation, redivision, correction de lots ou autre operation cadastrale;
-ACQUERIR par achat, prise en paiement, ou de toute autre facon, aux charges et conditions jugees appropriees, tout bien meuble ou immeuble en consideration d'une dette due a la Banque;
-VENDRE OU AUTREMENT ALIENER tout bien meuble ou immeuble acquis par la Banque en paiement d'une dette ou a l'occasion de la realisation de ses garanties, recevoir le prix de telle alienation, aux charges et conditions jugees appropriees et, s'il y a lieu, en donner quittance;
-INTERVENIR, au nom de la Banque, a toute convention de credit, a tout acte de prets domestiques ou internationaux et a tout document connexe, en association ou non avec d'autres banques ou organismes financiers, de meme qu'a tout acte de cession totale ou partielle par lequel la Banque cede ou acquiert des participations dans les prets de cette nature;
-INTERVENIR a toute operation sur les prets a risque souverain et sur toute valeur mobiliere s'y rapportant (les titres) et, plus particulierement, mais sans restreindre pour autant la generalite de ce qui precede, a toute convention d'emprunt at de pret de titres, d'echange, de convention de cession, de convention d'achat, de convention de vente, d'option et de convention de participation portant sur des titres;
-INTERVENIR a toute convention de garantie en faveur d'autres banques ou organismes financiers;
-POSER tout geste necessaire conformement aux pouvoirs enonces dans la presente resolution, portant specifiquement sur un navire, ses greements, equipements, accessoires, embarcations et toute piece ou partie de ce navire et ce, conformement aux dispositions prevues dans la Loi sur la marine marchande du Canada.
2. L'un des fondes de pouvoir identifies au paragraphe 3 a) et b) soit et il est par les presentes autorise pour et au nom de la Banque Nationale du Canada, a;
-ETRE PARTIE a un acte hypothecaire garantissant a la Banque le remboursement et l'execution de toute obligation;
-POSER tout geste necessaire a l'enregistrement ou a la publication des droits emanant de tel document, contrat ou acte, le cas echeant.
Confirmation Letter/Lettre de confirmation
Canadian Securities Registration Systems/Systemes d'Enregistrement des Garanties Canadiennes = 180-13571 Commerce Parkway, Richmond, BC V6V 2L1 Authorized Section 427 Bank Act Registrar Bureau d'enregistrement autorise conformement a l'article 427 de la Loi sur les banques.
Montreal, Quebec Ref/Objet: 00349893; 00349894 Kronstrom Desjardins
H3B 4M6
Tel/Tel: 1-514-395-0570
Acct# 9006 Fax/Telecopie: 1-514-395-0571
--------------------------------------------------------------------------------
Dear Sir / Madam Monsieur / Madame
Re: Bank Act Security - Section 427 Objet: GARANTIES DONNEES EN VERTU DE LA
LOI SUR LES BANQUES - ARTICLE 427
We have processed your request(s) Nous avons donne suite a votre (vos)
and hereby confirm the following demande(s) et nous vous faisons part des
results: (*see below) resultats suivants: (*voir ci-dessous).
--------------------------------------------------------------------------------
TYPE REGISTRATION NAME ADDRESS DATE NUMBER BANK
TYPE ENREGISTREMENT ADRESSE DATE NUMERO BANQUE
au nom de
(1) Exfo Ingenierie 465, avenue Godin 2000/02/09 01055562 Banque
Electro-Optique Inc. Vanier PQ G1M3G7 09:14 AM Nationale de
PST Paris (Canada)
--------------------------------------------------------------------------------
REFERENCE REFERENCE
(1) We have entered the above name(s) (1) Nous avons ajoute le(s) nom(s)
on our register of notices of ci-dessus a notre registre de preavis
intention to give security under the se rapportant aux garanties donnees en
Bank Act in the province of Quebec. vertu de la Loi sur les banques dans
la province de: Quebec.
(2) A search has been made of the (2)Nous avons examine a les preavis qui
notices of intention to give security se rapportent aux garanties donnees en
under the Bank Act registered in the vertu de la Loi sur les banques et qui
province of Quebec. As at the date sont enregistres pour la province de:
and time above, our records indicate Quebec. A la date et a l'heure indiquees
the following. ci-dessus.
--------------------------------------------------------------------------------
YOUR SEARCH CRITERIA VOTRE CRITERE DE RECHERCHE
Exfo Ingenierie Electro-Optique Inc. Exfo Ingenierie Electro-Optique Inc.
RETURNS THE FOLLOWING RESULTS: REVELE LES RESULTATS SUIVANTS:
--------------------------------------------------------------------------------
TYPE REGISTRATION NAME ADDRESS DATE NUMBER BANK
TYPE ENREGISTREMENT ADRESSE DATE NUMERO BANQUE
AU NOM DE
(2) Exfo Electro-Optical 465, avenue 1999/12/24 01052275 Banque Nationale
Engineering Inc. Godin Vanier 07:27 AM Du Canada
Exfo Ingenierie PQ G1M3G7 PST
Electro-Optique Inc.
(2) Exfo Engenierie 465, avenue 2000/02/09 01055562 Banque Nationale
Electro-Optique Inc. Godin Vanier 09:14 AM De Paris
PQ G1M3G7 PST (Canada)
--------------------------------------------------------------------------------
|
/s/ R. Conconi
-----------------------------------
For Registrar / Pour le Registraire
|
We acknowledge receipt of fees Nous accusons reception des droits prescrits dont les montants
as follows: s'etablissent comme suit:
------------------------------------------------------------------------------------------------
TYPE FEE GST QUANTITY TOTAL RECEIPT NO.
TYPE TARIF TPS QUANTITE TOTAL NUMERO DU RECU
------ ------- ------ ---------- ------- ---------------------
(1) $8.00 $.00 1 $8.00 00349893 - S-R-RN-O
(2) $4.00 $.00 1 $4.00 00349894 - S-R-PS-O
-------
$12.00
GST/TPS #: 125 614362
|
2 sur 2 00-02-09 12
[BNP LOGO]
DEMANDE DE CREDIT ET PROMESSE DE DONNER DES GARANTIES
EN VERTU DE LA LOI SUR LES BANQUES
|
Le soussigne demande a la Banque Nationale de Paris (Canada) (Ci-apres nommee la <<banque>>) de lui consentir des prets et avances sur la garantie des biens dont il est actuellement ou pourra devenir proprietaire.
Pour assurer la banque du paiement des sommes qui lui seront dues en vertu de ces prets et avances, le soussigne promet de donner a la banque, en vertu de l'article 427 de la Loi sur les banques, des garanties sur lesdits biens.
Pour les memes fins et aussi a titre de garantie de toute autre obligation du soussigne envers la banque, le soussigne promet de plus qu'il cedera en garantie a la banque les connaissements ou les recepisses d'entrepot relatifs a ces biens.
Sauf entente contraire entre la banque et le soussigne, tous les prets et avances qui seront consentis par la banque au soussigne seront reputes avoir ete consentis sur la foi de la presente promesse.
Les garanties consenties a la banque en execution de la presente promesse s'ajouteront, et ne se substitueront pas, a toute autre garantie detenue par la banque.
Pour les fins des presentes et de toute garantie consentie a la banque en vertu de la Loi sur les banques, la banque est reputee consentir un pret ou une avance si elle accepte une lettre de change payable a terme, si elle paie une telle lettre de change ou fournit les fonds necessaires a cette fin, ou si elle emet une garantie ou promet de toute autre facon d'effectuer un paiement.
Signe a VANIER , ce 17e jour de MARS 2000
----------------------------- ------ ------------- -------
Ville Jour Mois Annee
Temoin: EXFO INGENIERIE ELECTRO-
OPTIQUE INC.
Pierre Plamondon /s/ Pierre Plamondon
------------------------------------ ---------------------------------
Nom en lettres moulees et signature Signature
Guy Paul Allard /s/ Guy Paul Allard
------------------------------------ ---------------------------------
Nom en lettres moulees et signature Signature
|
Page 1 de 1
[BNP LOGO]
Pour bonne et valable consideration, le soussigne cede a la Banque Nationale de Paris (Canada) (ci-apres appelee la <<banque>>) en garantie continue du paiemente de tous les prets en avances consentis ou qui puevent etre consentis par la banque au soussigne et du renouvellement de ces prets et avances ou de leur substitution, ainsi que des interets y afferents, les biens suivants, dont le soussigne est actuellement proprietaire ou peut le devenir(1):
DESCRIPTION DES BIENS
Tous les stocks presents et futurs du soussigne et tous les biens presents et futurs servant a l'emballage et a l'expedition de ces stocks, ou que ces stocks et biens puissent se trouver et qui sont actuellement ou peuvent a l'avenir etre a l'endroit ou aux endroits suivants:
DESIGNATION DES LIEUX
465, AVENUE GODIN, VANIER, QUEBEC G1M 3G7 - 436, RUE NOLIN, VANIER, QUEBEC,
G1M 1E7 ou a tout autre endroit ou en transit.
La presente garantie est donnee selon les dispositions de l'article 427 de la Loi sur les banques, de meme que conformement a la promesse de donner des garanties remise par le soussigne a la banque, le 17 e jour de MARS 2000, et a toute autre promesse de meme nature faite par le soussigne a la banque.
Les biens appartenant actuellement au soussigne et cedes par la presente, sont libres de tout privilege, hypotheque ou charge, sauf les cessions anterieures, s'il en est, a la banque, et le soussigne garantit que les biens dont il pourra devenir acquereur et qui sont par la presente cedes, seront libres de tout privilege, hypotheque ou charge, sauf les cessions anterieures, s'il en est, a la banque.
Signe a Vanier, ce 17 e jour de MARS 2000
______ ____ ____ _____
Ville Jour Mois Annee
Temoin: EXFO INGENIERIE ELECTRO-OPTIQUE
INC.
Pierre Plamondon /s/ Pierre Plamondon
_________________________________ _________________________________
Nom en lettres moulees et signature Signature
Guy Paul Allard /s/ Guy Paul Allard
_________________________________ _________________________________
Nom en lettres moulees et signature Signature
_____________
|
(1) La description des biens et la designation des lieux ou ils sont situes peuvent etre enonces dans une annexe a joindre aux presentes et a faire signer.
Page 1 de 1
[LOGO]
CONVENTION RELATIVE AUX GARANTIES DONNEES PAR LE CLIENT
En consideration de fait que la Banque Nationale de Paris (Canada) la <<banque>>) consent a faire affaire avec le soussigne EXFO INGENIERIE ELECTRO-OPTIQUE INC. (le <<client>>), le client convient comme suit:
1. Le client convient avec la banque que les dispositions qui suivent s'appliquent aux garanties consenties ou a etre consenties a la banque par le client en vertu de la Loi sur les banques, et, pour autant que les lois applicables le permettent, a toutes les autres guaranties que le client a consenti ou pourra consentir a la banque.
2. A defaut du paiement par le client de toute somme due par lui a la banque, ou si le client est autrement en defaut envers la banque ou s'il devient insolvable, la banque, sans toutefois y etre tenue, est autorisee a realiser en totalite ou en partie les garanties donnees par le client, a prendre possession et a vendre, en totalite ou en partie, les biens affectes par ces garanties (les <<biens>>). La vente pourra etre faite de la maniere, a l'epoque et a l'endroit que la banque choisira, et ce, sans avis au client (autre qu'un avis requis par la loi), sans formalite et sans obligation d'annoncer ou de vendre aux encheres publiques. La banque aura le choix de l'imputation du produit de la realisation de garanties, et elle pourra deduire de ce produit le montant des frais de realisation des garanties.
3. Dans le cas de vente des biens par le client, en tout ou en partie, le produit de toute vente, y compris les especes, effets de commerce, instruments de paiement et titres remis en contrepartie, de meme que les creances contre les acheteurs appartiendront a la banque a qui ils devront etre verses ou remis et, jusqu'a ce versement ou cette remise, le client les detiendra a titre de fiduciaire et de depositaire pour la banque. L'execution par le client d'une cession ou d'une hypotheque de creances sera censee resulter de la presente convention et ne constituera pas une reconnaissance de la part de la banque que le client a des droits sur ces creances.
4. Si, afin de permettre au client d'entrer en possession des biens, la banque lui remet une des garanties qu'elle detient, il recevra cette garantie et les biens qu'elle vise a titre de fiduciaire et de depositaire pour la banque.
5. Le client doit faire assurer les biens pour leur pleine valeur assurable contre l'incendie et le voi et contre tout autre risque qu'un administrateur prudent protegerait par assurance. La banque est par les presentes designee beneficiaire des indemnites payables en vertu des polices concernant les biens, et le client fera inscrire cette designation sur les polices. Le client remettra a la banque une copie de chaque police; au moins quinze (15) jours avant l'echeance d'une police, le client remettra a la banque une preuve de son renouvellement. A defaut par le client de se conformer a ce qui precede, la banque, sans toutefois y etre tenue, peut faire assurer les biens pour le montant qu'elle jugera a propos, et dans ce cas, les primes payees par la banque seront reputees etre une avance faite au client et remboursable a demande, avec interet au taux preferentiel de la banque, plus trois pour cent (3%).
6. Le client doit acquitter a echeance toute creance pouvant conferer sur les biens des droits prioritaires aux droits de la banque et il doit en fournir la preuve a la banque. La banque peut de temps a autre, aux frais du client, inspecter les biens et les registres comptables et factures du client, et a cette fin, le client doit donner a la banque acces aux lieux ou se trouvent les biens ainsi que ces registres et factures. A la demande de la banque, le client doit, mensuellement, remettre a la banque une declaration de la valeur des biens et fournir a la banque tous autres renseignements demandes par celle-ci au sujet des biens.
7. Dans le but de realiser les garanties consenties par le client, la banque peut, sans, mise en demeure, entrer dans les lieux occupes par le client en rapport avec les biens; elle peut les occuper, a l'exclusion de toute autre personne, y compris le client, et s'en servir sans frais jusqu'a ce qu'elle ait dispose des biens. Elle peut nommer un sequestre ou agent aux fins d'exercer les droits accordes a la banque dans cette convention. Ce sequestre ou agent a de plus le droit d'agir au nom du client, et aux frais de celui-ci, pour completer la fabrication des biens, pour les expedier et pour faire toutes choses necessaires a cette fin.
8. Le client devra signer ou endosser tout document qui, de l'avis de la banque, devrait etre signe ou endosse pour executer la presente convention ou pour completer le titre de la banque sur les biens ou sur leur produit. A cette fin, le client nomme la banque, avec pouvoir de substitution, son mandataire aux fins de signer ou endosser en son nom tout tel document. Ce mandat subsistera nonobstant le deces ou le changement d'etat du client et il ne pourra etre revoque tant que le client restera endette envers la banque.
9. La banque pourra faire des compromis, transiger ou donner quittance relativement aux garanties, aux biens ou a leur produit.
10. Dans cette convention, les mots <<frais de realisation des garanties>> s'entendent notamment de tous les frais, depenses et honoraires payes ou encourus par la banque pour prendre possession des biens, en faire l'inventaire, les proteger, les conserver, en completer la fabrication et les vendre, ainsi que pour percevoir les creances resultant de la vente de ces biens.
11. Les droits accordes a la banque dans cette convention s'ajoutent aux droits qui lui sont accordes par la loi et par toute autre convention. Ces droits s'etendront a tout successeur de la banque, y compris a une entite ayant succede a la Banque par suite d'une fusion ou autrement.
12. Tout avis au client peut lui etre donne par courrier ordinaire a sa derniere adresse connue de la banque.
Signe a VANIER , ce 17e jour de MARS 2000
----------------------- ---- ---------- -------
Ville Jour Mois Annee
|
Temoin: EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Pierre Plamondon /s/ P Plamondon
----------------------------------- --------------------------------
Nom en lettres moulees et signature Signature
Guy Paul Allard /s/ Guy Paul Allard
----------------------------------- ---------------------------------
Nom en lettres moulees et Signature Signature
|
Page 2 de 2
DECLARATION ASSERMENTEE
DU PRESIDENT
DE
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
(L' <<Emprunteur>>)
EN RAPPORT avec la convention de credit du 6 juillet 1995 et le premier addendum a cette convention de credit intervenu le 22 decembre 1999 (collectivement designes la <<Convention de Credit>>) en vertu de laquelle BANQUE NATIONALE DU CANADA et BANQUE NATIONALE DE PARIS (CANADA) (les <<Preteurs>>) consentent a EXFO Ingenierie electro-optique inc. (l' <<Emprunteur>>) une marge de credit d'exploitation jusqu'a hauteur de DIX MILLIONS DE DOLLARS (10 000 000 $) et un credit special <<evergreen>> jusqu'a hauteur de TROIS MILLIONS DE DOLLARS (3 000 000 $) (les <<Credits>>), afin de confirmer aux Preteurs certaines questions de fait, je soussigne, GERMAIN LAMONDE, declare ce qui suit sous serment:
1. Je suis le president de l'Emprunteur;
2. J'ai une connaissance personnelle des transactions, des operations, de l'etat et des affaires de l'Emprunteur;
3. Le siege de l'Emprunteur est situe au 465, avenue Godin, Vanier, province de Quebec, G1M 3G7 et ses seules places d'affaires au Quebec ou ailleurs dans le monde sont entierement et correctement decrites a l'annexe 1 de la presente declaration;
4. Les seuls baux immobiliers auxquels l'Emprunteur est partie sont les suivants et ont trait aux endroits ci-apres mentionnes:
-Canada: 465, ave Godin, Vanier (Quebec) G1M 3G7
436, ave Nolin, Vanier (Quebec) G1M 1E7
400, ave Godin, Vanier (Quebec) G1M 2K2
-Angleterre: Crown House, 28 Winchester Road, Romsey,
Hampshire, S051 8AA
-Etats-Unis: Mission Plaza, 1201 Richardson Drive,
Richardson, TX 75081
-Chine: Suite 18-2, CITIC Building, 19 Jianguomenwai Street,
Beijing 100004
-France: 100, rue Albert Calmette, 78353 Jouy-en-Josas
-Singapour: Canada House Business Center, 7 Amoy Street Far East
Square, #03-02 Canada house, Singapore 049949.
|
5. L'Emprunteur n'est proprietaire d'aucun immeuble;
6. Le schema corporatif du <<Groupe Exfo>> joint comme annexe 2 a la presente declaration est complet et exact en date des presentes;
7. L'Emprunteur vend ses produits et ses services directement a ses clients au Canada ou ailleurs dans le monde, et non par l'intermediaire d'EXFO America, Inc., ni d'EXFO Europe S.A.R.L. ni de quelqu'autre personne morale faisant partie du <<Groupe EXFO>>;
8. L'Emprunteur est toujours proprietaire absolu et sans condition de la propriete intellectuelle utilisee dans l'exploitation de son entreprise, incluant notamment la marque de commerce <<EXFO>>, ainsi que les brevets et les demandes de brevets detailles a l'annexe 3.
ET JE FAIS cette declaration sous serment, la croyant consciencieusement vraie et exacte.
EN FOI DE QUOI, j'ai signe a Vanier, province de Quebec, ce 7e jour de fevrier 2000.
/s/ GERMAIN LAMONDE -------------------------------------- Germain LAMONDE, president |
Declare sous serment devant moi a Vanier, ce 7e jour de fevrier 2000
/s/ GUY PAUL ALLARD ------------------------------------- Guy Paul Allard, Avocat |
GROUPE DE TECHNOLOGIE -- QUEBEC
[BANQUE NATIONALE DU CANADA LOGO]
Quebec, le 28 mars 2000
EXFO INGENIERIE ELECTRO-OPTIQUE INC
465, avenue Godin
Vanier, Quebec
G1M 3G7
A l'attention de Monsieur Germain Lamonde, president
Objet: Renouvellement des credits et offre de financement
Monsieur Lamonde,
Il nous fait plaisir de vous soumettre les termes et conditions de renouvellement sur lesquels la Banque Nationale du Canada renouvelle les credits consentis a Exfo Ingenierie Electro-Optique Inc. <<l'Emprunteur>> par la Banque Nationale du Canada (la <<Banque>>) et la Banque Nationale de Paris (<<BNP>>) (Collectivement les <<Preteurs>>) en vertu d'une convention de credit intervenue entre les Preteurs et l'Emprunteur le 6 juillet 1995 (la <<Convention de Credit>>) et l'Addendum date du 22 decembre 1999
<<A>> $10,000,000 Credit d'exploitation <<B>> $ 3,000,000 Credit special <<evergreen>> < > $ 1,000,000 Marge de credit lettres de credit (nouveau) <<D>> $ 300,000 Financement direct aux employes regime acquisitions actions
(majoration)
<<E>> ($1,000,000) Risque de change a l'interieur de credit d'exploitation
(majoration)
<<F>> $ 350,000 Master card affaires (majoration)
SANS NOVATION
Le present renouvellement est effectue sans novation ni derogation du credit d'exploitation et de tous les droits hypotheques, cautionnements, recours et rangs resultant de la convention de credit du 5 juillet 1995 et de l'addendum du 22 decembre 1999 ainsi que des documents et suretes et des autres ecrits s'y rattachant.
150, boulevard Rene-Levesque Est
Bureau 1910
Quebec (Quebec) G1R 5B1
Telecopieur: (418) 523-5721
RENOUVELLEMENT
FACILITE "A" CREDIT D'EXPLOITATION $10,000,000 et FACILITE "B" FINANCEMENT CREDIT SPECIAL EVERGREEN DE $3,000,000 (LES CREDITS A) ET B) SONT SUJETS A SYNDICATION A RAISON DE 50% DU CREDIT TOTAL AVEC LA BANQUE NATIONALE DE PARIS
Suite a la revision du credit d'exploitation consenti en vertu de la convention de credit du 6 juillet 1995 et l'addendum signe le 22 decembre 1999, la Banque offre par les presentes a l'Emprunteur de renouveler lesdits credits aux memes termes et conditions, sous reserve seulement des modifications suivantes:
- l'Emprunteur devra fournir a la satisfaction de la banque une liste des comptes a recevoir de grandes societes ages de 120 jours et moins.
- pour le credit B):
But du financement inchange sauf que nous incluons le financement des
actions d'entreprises du meme secteur.
REVISION
Les termes et conditions du credit d'exploitation pourront etre revise periodiquement par la Banque, incluant sans limitations, des revisions annuelles dont la prochaine est prevue pour le 31 decembre 2000.
FACILITE "C" MARGE DE CREDIT LETTRES DE CREDIT (NOUVEAU)
- Considere a l'exterieur du financement d'exploitation.
- 20% du montant des lettres de credit seront ajoutes aux calculs des creances prioritaires.
LETTRES DE CREDIT COMMERCIAL
Les lettres de credit commercial emises par la Banque a la demande de l'Emprunteur doivent repondre aux conditions suivantes:
- l'option de tirage sous forme de lettres de credit commercial pourra etre exercee en tout temps moyennant un preavis de 2 jours ouvrables donne a la Banque;
- les lettres de credit commercial seront payables __ a vue ou __ a un terme n'excedant pas 90 jours;
- les lettres de credit commercial payables a vue font partie du montant en principal du present credit pour le montant nominal de celles-ci et deviennent, lors de leur paiement, des avances a
taux variable et porteront des lors interet au taux variable enonce au paragraphe intitule "Avances a taux variable";
- les lettres de credit commercial payables a terme font partie du montant en principal du present credit et sur reception par la Banque des documents requis aux termes de toute lettre de credit commercial a terme, le montant nominal de celles-ci sera ajoute au montant des avances a taux variable pour les fins des conditions de financement enoncees ci-apres; lors de son paiement toute lettre de credit commercial a terme deviendra une avance a taux variable et portera des lors interet au taux variable enonce au paragraphe intitule "Avances a taux variable";
- des frais d'emission etablis selon la tarification en vigueur a la Banque sont percus par la Banque a la date d'emission de toute lettre de credit commercial.
Augmente de $50,000.00 pour se lire $300,000.00
L'Emprunteur utilisera son credit au moyen d'un pret a demande a taux variable comportant un deboursement unique et portant interet a compter du deboursement, jusqu'a parfait paiement, au taux de base canadien de la Banque majore de 0.00% avec interets au meme taux sur toute somme en arrerages.
Les interets seront payables mensuellement le 26e jour de chaque mois.
L'emprunteur remboursera les interets seulement pendant les cinq (5) premieres annees, par la suite 1/3 du capital sera payable dans la sixieme annee, 1/3 du capital sera payable dans la septieme annee et 1/3 du capital sera payable dans la huitieme annee et ce toujours avec les interets payables mensuellement.
Le pret sera remboursable en tout temps si l'employe perd le statut de personne admissible ou que Exfo Ingenierie Electro-Optique Inc ne detient plus de financement d'exploitation a la Banque.
Avant tout deboursement du present credit, les conditions suivantes devront avoir ete remplies a la satisfaction de la Banque a savoir:
- l'Employe devra avoir remis a la banque les formules suivantes dument completees:
- Bilan personnel dument signe;
- Lettre de confirmation de l'octroi du droit de souscrire a des actions indiquant le type de categorie emise par EXFO Ingenierie Electro-Optique Inc;
- Formulaire d'acceptation de souscription du regime d'achat d'actions de EXFO Ingenierie Electro-Optique Inc dument signe;
- Cautionnement de Exfo Ingenierie Electro-Optique Inc pour le montant de chaque financement
FACILITE "E" RISQUE DE CHANGE
A l'interieur du credit d'exploitation augmente de $500,000.00 pour se lire $1,000,000
FACILITE "F" MASTER CARD AFFAIRES
Augmente de $100,000.00 pour se lire $350,000.00
SURETES
A) et B) inchange sauf:
--Cautionnement de Nortech Fibronic Inc au montant de $1,000,000 appuye par:
--Hypotheque mobiliere generale de 1(er) rang sur l'universalite des inventaires presents futurs et creances presentes et futures de Nortech Fibronic Inc au montant de $1,000,000.00 (additionnelle) couvrant le credit A;
--Cession(s) de priorite de rang de la Caisse Desjardins Les Saules sur les creances et stock jusqu'a concurrence de $1,000,000.00
--<<General security agreement>> enregistre en Ontario et grevant l'universalite des biens meubles presents et futurs de l'Emprunteur;
(a renouveler)
--A liberer: Cautionnement d'EXFO USA garanti par un <<security agreement>> en vertu de UCC enregistre aux Etats-Unis et grevant l'universalite des comptes a recevoir presents et futurs d'EXFO USA (Filiale non operante)
REPRESENTATIONS ET GARANTIES
L'emprunteur represente et garantie a la Banque que toutes les representations et garanties faites dans la convention de credit et les documents de suretes demeurent vraies et exactes en date de ce jour.
HONORAIRES
L'Emprunteur devra payer a la Banque, lors de l'acceptation des presentes, des honoraires pour etude de dossier au montant de $15,600.00, lesquels sont non remboursables et pourront etre debites du compte-courant de l'Emprunteur.
Maintenons au statut quo des frais d'agent de syndication annuel $5,000.00.
Une convention de reconduction des avances syndiquees Credit A) et B) sera preparee par une firme d'avocat accreditee et mandate par la Banque aux frais de l'Emprunteur, laquelle devra etre signe par les parties.
Tous les honoraires et frais juridiques pour la preparation et la publication des documents de surete et de toute autre documentation y afferente sont a la charge de l'Emprunteur, que le financement soit complete ou non.
La prise des garanties (Canada et Etats Unis) ainsi que la convention de pret sera effectue par une firme d'avocats accreditee et mandatee par la Banque au frais de l'Emprunteur.
ACCES A L'INFORMATION
L'Emprunteur autorise, par les presentes, tout agent de renseignements personnels, institution financiere, creancier, autorite fiscale, employeur ou toute autre personne, incluant tout organisme public, detenant des renseignements relatifs a l'Emprunteur ou a ses biens, notamment des renseignements d'ordre financier ou relativement a tout engagement ou cautionnement de l'Emprunteur, a fournir ces renseignements a la Banque, afin de verifier l'exactitude de toute information fournie ou qui sera fournie subsequemment a la Banque et s'assurer de la solvabilite de l'Emprunteur.
ACCEPTATION
Si la presente offre de renouvellement ainsi que l'offre additionnel vous conviennent, nous vous prions de bien vouloir nous signifier votre accord en nous retournant la copie jointe a cet effet, dument signee et paraphee a chaque page, avant 17H00 heures le 14 avril 2000, a l'attention de Alain Gallichan, Directeur de comptes. Apres cette date, la Banque se reserve le droit d'annuler ou de modifier la presente offre de renouvellement, sans avis.
Veuillez agreer, Monsieur Lamonde, l'expression de nos salutations distinguees.
[FLAG LOGO] BANQUE NATIONALE DU CANADA
/s/ Alain Gallichan /s/ Yves Lachance ------------------------------------- -------------------------------------- Alain Gallichan Yves Lachance Directeur de comptes senior Directeur de comptes 523-4742 |
ACCEPTATION
Nous declarons avoir pris connaissance de la presente offre de renouvellement et additionnelle datee du 28 mars 2000 et en acceptons les termes, modalites et conditions.
Signe a ___________________, province de Quebec, ce ___________________.
EXFO INGENIERIE ELECTRO-OPTIQUE INC
Par:_____________________________________ Par:________________________________
Le(s) soussigne(s) declare(nt) avoir pris connaissance de la presente offre de financement et en etre entierement satisfait(s). Le(s) soussigne(s) convient(nent) de cautionner jusqu'a concurrence du (des) montant(s) stipule(s) dans la section <<Suretes par la (les) cautions(s)>>, solidairement et inconditionnellement toutes les obligations et engagements, presents et futurs, de l'Emprunteur envers la Banque incluant, sans limitation, les obligations et engagements de l'Emprunteur en vertu de ladite offre de financement, le paiement du capital, des interets, des frais et des accessoires et toute autre somme qui pourrait devenir due aux termes de l'offre de financement et des documents de surete, le cas echeant, jusqu'au remboursement complet de toutes sommes dues a la Banque par l'Emprunteur. Le(s) soussigne(s) renonce(nt) aux benefices de discussion et de division et s'engage(nt) a signer toute documentation qui pourrait lui (leur) etre soumise par la Banque dans le but de donner plein effet a son (leur) cautionnement.
Signe en la Ville de ______________, province de __________________, ce __________________ ieme jour 2000.
NORTECH FIBRONIC INC
Signature Signature
EXHIBIT 10.2
SUMMARY IN ENGLISH
Offer to purchase shares of Nortech Fibronic Inc. dated February 6, 2000 among EXFO Electro-Optical Engineering Inc., Claude-Adrien Noel, 9086-9330 Quebec Inc., Michel Bedard, 9086-9314 Quebec Inc., Christine Bergeron and Societe en commandite Capidem Quebec enr.
TRANSACTION: Offer to purchase all the shares of
Nortech Fibronic Inc. ("Nortech") made
by EXFO Electro-Optical Engineering Inc.
("EXFO") to Claude-Adrien Noel,
9086-9330 Quebec Inc., Michel Bedard,
9086-9314 Quebec Inc., Christine
Bergeron and Societe en commandite
Capidem Quebec Enr. ("Capidem"), as of
February 6, 2000 (the "Agreement").
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PRICE: CDN$3,956,000 payable as follows:
- $2,606,000 in cash;
- issuance to Claude-Adrien Noel and
9086-9330 Quebec Inc., as a group,
of 400,000 Class "G" Shares of
EXFO;
- issuance to Michel Bedard and
9086-9314 Quebec Inc., as a group,
of 400,000 Class "G" Shares of
EXFO;
- issuance of a debenture in the amount of CDN$200,000 payable to Capidem on November 30, without interest;
- the balance of CDN$350,000 is held in escrow by Lavery, de Billy in order to guarantee the representations and warranties of Capidem under this Agreement. Subject to the adjustments to be made, $200,000 are payable on February 1, 2001 and $150,000 on February 1, 2002.
EMPLOYMENT CONTRACT: EXFO undertakes to offer, on the closing
date, to Claude-Adrien Noel and Michel
Bedard, employment contracts for a
period of two (2) years for a total
annual salary of CDN$125,000. Such
employment contracts shall include
non-competition and confidentiality
provisions for a period of two (2) years
from the termination of the employment.
ADJUSTMENT OF PRICE: The offering price was established
according to the financial statements of
Nortech as at September 30, 1999. The
offering price will be adjusted based on
difference between the financial
statements of Nortech for fiscal 2000
and the net assets adjusted as at
September 30, 1999. In addition, the
accounts receivable unpaid ninety (90)
days after the closing will be deducted
from the price.
REPRESENTATIONS AND WARRANTIES The offer contains the usual
OF THE SELLERS: representations and warranties
provisions including regarding: property
of shares, issued and authorized shares,
financial statements, transactions not
in the ordinary course or business,
products, taxes, labour matters,
insurance, environment, subsidiaries,
intellectual property and trademarks.
REPRESENTATIONS AND WARRANTIES OF EXFO: Among other things, EXFO represents and
warrants that the Class "G" Shares to be
issued upon closing will be validly
issued as fully paid and that EXFO will
do the necessary in order to pay to
Claude-Adrien Noel, 9086-9330 Quebec
Inc., Michel Bedard and 9086-9314 Quebec
Inc. a dividend in the amount of
CDN$344,000 declared on January 31,
2000.
OPTION OF EXFO TO CANCEL THE OFFER: If:
- any representations and warranties
made under this offer are false or
not true; or
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- EXFO obtains any information that
can negatively affect Nortech; or
- any conditions precedent is not
fulfilled prior to the closing;
- and the sellers cannot remedy to
such event prior to the closing;
- or if, regardless of any of the
conditions set out hereinabove,
EXFO is not satisfied of the result
of its due diligence,
then:
- EXFO shall have the right, at its
entire discretion, to cancel the
present offer, in which case EXFO
and the sellers will be released of
all their respective obligations.
INDEMNIFICATION: Without any prejudice to any other of
its rights, EXFO has the right to
require the sellers to indemnify it from
any losses, fees or damages it can
suffer from any inexactitude or
violation by the sellers of their
declarations, representations or
warranties contained in the offer.
GOVERNING LAW: Laws of the Province of Quebec,
Canada.
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SUMMARY IN ENGLISH
CERTIFICATE OF CLOSING
DATED FEBRUARY 7, 2000 AMONG
EXFO ELECTRO-OPTICAL ENGINEERING INC.,
CLAUDE-ADRIEN NOEL,9086-9330 QUEBEC INC., MICHEL BEDARD,
9086-9314 QUEBEC INC., CHRISTINE BERGERON AND
SOCIETE EN COMMANDITE CAPIDEM QUEBEC ENR.
Object: The parties confirm that the agreement intervened
between the same parties on February 6, 2000 relating
to the acquisition by EXFO Electro-Optical Engineering
Inc. ("EXFO") of all the shares of Nortech Fibronic
Inc. ("Nortech") is confirmed and ratified. The parties
declare that all the representations and warranties are
still valid and that the conditions precedent to the
transaction are fulfilled.
Date of effect: EXFO has possession of all the shares of Nortech and
is the sole owner of such shares as of February 4,
2000.
Governing Law: Laws of the Province of Quebec, Canada.
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EXFO ingenierie Electro-Optique inc.
et
Monsieur Claude-Adrien Noel
Madame Christine Bergeron
Monsieur Michel Bedard
Societe en commandite Capidem Quebec enr.
9086-9330 Quebec inc.
9086-9314 Quebec inc.
Offre d'achat des actions de
Nortech Fibronic inc.
TABLE DES MATIERES
1. DECLARATIONS..............................................................2
2. OFFRE.....................................................................3
3. PRIX......................................................................3
4. AUTRES CONDITIONS.........................................................4
5. AJUSTEMENT DE PRIX........................................................5
6. REPRESENTATIONS ET GARANTIES DU VENDEUR...................................6
6.1.1 Representations et garanties portant sur les Actions.............6
6.1.2 Representations et garanties portant sur la Societe..............6
7. REPRESENTATIONS ET GARANTIES DE L'ACQUEREUR..............................18
8. AUTRES CONDITIONS PREALABLES A LA CLOTURE................................19
8.1.1 Acces aux livres, registres, informations et documents..........19
8.1.2 Aucun dommage aux biens.........................................19
8.1.3 Procedes corporatifs............................................20
8.1.4 Opinion favorable...............................................20
8.1.5 Lettre de confirmation des verificateurs de l'Acquereur.........21
8.1.6 Lettre de confirmation relative aux prelevements
de taxes de vente americaines...................................21
8.1.7 Engagements de non-concurrence..................................21
8.1.8 Demission des administrateurs et officiers......................22
8.1.9 Renonciation a tous droits et recours...........................22
8.1.10 Actes anterieurs................................................22
8.1.11 Bail commercial.................................................22
9. RESILIATION DE LA PRESENTE OFFRE PAR L'ACQUEREUR.........................23
10. CLOTURE ET DATE EFFECTIVE DE LA VENTE....................................23
11. LIVRAISON DES ACTIONS....................................................23
12. INDEMNISATION............................................................24
13. ENGAGEMENTS DIVERS.......................................................24
14. AVIS.....................................................................24
15. SEULE ENTENTE ET MODIFICATION............................................26
15.1 Entente entiere.................................................26
15.2 Modification....................................................26
16. DOCUMENTS ADDITIONNELS...................................................26
17. LOIS APPLICABLES.........................................................27
18. TITRES...................................................................27
19. NULLITE D'UNE DISPOSITION DE L'OFFRE.....................................27
20. FRAIS ET HONORAIRES PROFESSIONNELS.......................................27
21. ACCEPTATION DE L'OFFRE...................................................27
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LISTE DES ANNEXES
ANNEXE 3.1 ii)
- Description des actions privilegiees categorie "G"
ANNEXE 3.1 in fine
- Ventilation du prix de vente
ANNEXE 4.3
- Clauses de confidentialite et de non-concurrence
ANNEXE 6.1.2 j)
- Transactions hors du cours ordinaire des affaires
ANNEXE 6.1.2 k)
- Paiements hors du cours ordinaire des affaires
ANNEXE 6.1.2 n)
- Demonstrateurs
ANNEXE 6.1.2 s)
- Emissions
ANNEXE 6.1.2 y)
- Dividende et rachat d'actions
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ANNEXE 6.1.2 z)
- Conventions d'emploi et conventions collectives
ANNEXE 6.1.2 aa)
- Assurance collective et plan de pension
ANNEXE 6.1.2 dd)
- Defauts
ANNEXE 6.1.2 gg)
- Environnement
ANNEXE 6.1.2 kk)
- Restrictions
ANNEXE 6.1.2 mm i)A)
- Propriete intellectuelle
ANNEXE 6.1.2 mm)i)B)
- Brevets
ANNEXE 6.1.2 oo) i)
- Certification
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OFFRE D'ACHAT DES ACTIONS
DE NORTECH FIBRONIC INC.
-------------------------------------
A: MONSIEUR CLAUDE-ADRIEN NOEL, homme d'affaires, domicilie au 1119,
du Hibou, Stoneham, Quebec, G0A 4P0;
et: 9086-9330 QUEBEC INC., personne morale legalement constituee en
vertu de la Partie 1A de la Loi sur les compagnies, ayant sa
principale place d'affaires au 1119, du Hibou, Stoneham, Quebec,
G0A 4P0; agissant aux presentes et representee par son
president, Monsieur Claude-Adrien Noel, dument autorise aux fins
des presentes, tel qu'il le declare;
(Ci-apres designes collectivement "Groupe Noel");
et: MONSIEUR MICHEL BEDARD, homme d'affaires domicilie au 3032,
Henri-Bernatchez, Saint-Augustin-de-Desmaures, Quebec, G3A 2Y1;
et: 9086-9314 QUEBEC INC., personne morale legalement constituee en
vertu de la Partie 1A de la Loi sur les compagnies, ayant sa
principale place d'affaires au 3032, Henri-Bernatchez,
Saint-Augustin-de-Desmaures, G3A 2Y1, agissant aux presentes et
representee par son president, Monsieur Michel Bedard, dument
autorise aux fins des presentes, tels qu'il le declare;
(Ci-apres designes collectivement "Groupe Bedard");
et: MADAME CHRISTINE BERGERON, femme d'affaires, domiciliee et
residant au 16, chemin de la Chanterie, Stoneham, Quebec,
G0A 4P0;
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et: SOCIETE EN COMMANDITE CAPIDEM QUEBEC ENR., personne morale
constituee en societe en commandite, ayant sa principale place
d'affaires au 1595, Boul. Hamel Ouest, Quebec, Quebec, G1N 3Y7,
ici agissant et representee par le president de son commandite,
GESTION CAPIDEM INC., Monsieur Pierre Tardif, dument autorise a
agir aux presentes, tel qu'il le declare;
(ci-apres collectivement designes le "VENDEUR")
De: EXFO INGENIERIE ELECTRO-OPTIQUE INC. une societe legalement
constituee en vertu de la Loi canadienne sur les societes par
actions (Canada), ayant sa principale place d'affaires au 465,
avenue Godin, Vanier (Quebec) G1M 3G7, ici agissant et
representee par M. Germain Lamonde, son president, et M. Pierre
Plamondon, son vice-president Finances, dument autorises a agir
aux presentes, tel qu'ils le declarent;
(ci-apres designee l'"ACQUEREUR")
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ATTENDU la lettre d'intention signee le 17 janvier 2000 prevoyant le depot d'une offre d'achat de la totalite des actions du Vendeur.
LES PARTIES CONVIENNENT DE CE QUI SUIT:
1. DECLARATIONS
1.1 Le Vendeur declare que le capital-actions autorise de Nortech Fibronic inc. (la "Societe") est constitue d'un nombre illimite d'actions categorie "A", categorie "B", categorie "C", categorie "D", categorie "E", categorie "F", categorie "G" et categorie "H" toutes sans valeur nominale et que de ce capital-actions autorise, 14 190 actions categorie "D", 9 810 actions categorie "E", 9 000 actions categorie "F", 6 000 actions categorie "G" et 6 000 actions categorie "H" ont ete dument emises et sont presentement en circulation comme entierement acquittees et non cotisables (ci-apres collectivement appelees les "Actions"), aucune autre action n'ayant, a la date des presentes, ete attribuee, repartie ou emise.
1.2 Le Vendeur declare qu'il est actuellement et sera a la Date de cloture proprietaire des Actions et ce, dans les proportions suivantes:
__ Claude-Adrien Noel: 4 905 actions categorie "E"
__ Michel Bedard: 4 905 actions categorie "E"
__ Societe en commandite Capidem
Quebec enr.: 9 000 actions categorie "F"
__ Christine Bergeron: 6 000 actions categorie "H"
__ 9086-9330 Quebec inc.: 7 095 actions categorie "D"
__ 9086-9314 Quebec inc.: 7 095 actions categorie "D"
6 000 actions categorie "G"
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2. OFFRE
2.1 Se fondant sur ce qui precede et sous reserve des termes et conditions ci-apres enonces, l'Acquereur offre, par les presentes, d'acheter du Vendeur les Actions.
3. PRIX
3.1 La presente offre est faite au Vendeur pour un prix de trois millions neuf cent cinquante-six mille dollars (3 956 000,00 $) payable de la facon suivante:
i) 2 606 000,00 $ comptant a la Date de cloture;
ii) par l'emission au Groupe Noel de quatre cent mille (400 000) actions privilegiees categorie "G" de l'acquereur telles que decrites a l'Annexe 3.1 ii) et l'emission au Groupe Bedard de quatre cent mille (400 000) actions privilegiees categorie "G" de l'Acquereur telles que decrites a l'Annexe 3.1 ii) ayant un capital verse de 1,00 $ l'action. L'Acquereur s'engage a faire les choix fiscaux prescrits conjointement avec le Vendeur afin que ce dernier beneficie d'un roulement fiscal a l'egard de la vente de ses actions dans la Societe;
iii) par l'emission d'une debenture de l'Acquereur de 200 000,00 $ remboursable sans interet le 30 novembre 2000 a Societe en commandite Capidem enr.;
iv) sous reserve de la clause d'ajustement de prix qui suit, 200 000,00 $ le 1er fevrier 2001, et 150 000,00 $ le 1er fevrier 2002;
Cette somme de 350 000,00 $ sera remise a Lavery de Billy en fiducie (placee en certificats de depot ou de placement garantis de 3 mois dont
les interets profiteront au Vendeur) et constitue une retenue sur le prix de vente servant a garantir les representations du Vendeur, y compris quant au passif que la Societe pourrait encourir notamment et sans limitation, en raison des taxes de vente americaines non percues et remises et des penalites et interets s'y rattachant.
Le tout, tel que ventile a l'Annexe 3.1 in fine.
4. AUTRES CONDITIONS
4.1 L'Acquereur devra, avec effet a la Date de cloture, offrir a messieurs Claude-Adrien Noel et Michel Bedard des contrats d'emploi pour une duree de deux (2) ans, en contrepartie d'une remuneration totale de 125 000.00 $ par an (incluant le salaire annuel, les bonifications et les avantages sociaux qui ne sont pas generalement assumes par l'Acquereur au benefice de ses employes). Cette remuneration est fixee en tenant compte des fonctions actuelles de messieurs Claude-Adrien Noel et Michel Bedard. Toute affectation hors de la region de Quebec ou a des fonctions mieux remunerees dans la Societe ou chez l'Acquereur devra faire l'objet d'un ajustement a la hausse de la remuneration pour tenir compte de ce demenagement ou de cette nouvelle affectation. A l'expiration de la duree de deux (2) ans des contrats d'emploi ci-haut mentionnes, si et seulement si MM. Claude-Adrien Noel et Michel Bedard sont toujours a l'emploi de la Societe et/ou de l'Acquereur, un boni additionnel de 20 000,00 $ chacun leur sera verse.
4.2 La fin du contrat d'emploi prevu au paragraphe 4.1 n'entrainera aucune obligation d'indemnisation a l'endroit de messieurs Claude-Adrien Noel et Michel Bedard qui renoncent par les presentes a exercer quelconque recours a l'encontre de la Societe, sauf en cas de terminaison anticipee du contrat d'emploi par l'Acquereur, sans cause juste et suffisante, auquel cas le boni de 20 000,00 $ deviendra payable immediatement.
4.3 Les contrats de travail de messieurs Claude-Adrien Noel et Michel Bedard vont egalement prevoir une clause de confidentialite et de non-concurrence (tel que decrit a l'Annexe 4.3) d'une duree de deux (2) ans a compter de la cessation de l'emploi conforme avec les politiques de l'Acquereur en cette matiere.
4.4 L'Acquereur reconnait et reconnaitra l'anciennete de messieurs Claude-Adrien Noel et Michel Bedard, tant chez la Societe qu'eventuellement chez l'acquereur. Les vacances de messieurs claude-Adrien Noel et Michel Bedard seront determinees selon les politiques en vigueur chez l'Acquereur avec un minimum de quatre (4) semaines de vacances.
5. AJUSTEMENT DE PRIX
5.1 i) Le prix ayant ete fixe sur la foi de l'avoir des actionnaires tel
que reflete aux etats financiers consolides de la Societe
verifies au 30 septembre 1999 (ci-apres les "Etats financiers
1999") et en tenant compte du montant de 344 000,00 $ declare par
la Societe a titre de dividende le 31 janvier 2000 et en ne
tenant pas compte des frais de developpements capitalises, ni des
licences apparaissant a l'actif de la Societe, le prix de vente
sera augmente ou reduit selon le cas, par la difference entre
l'actif net ajuste a la Date de cloture tel que reflete aux Etats
financiers 2000 et l'actif net ajuste au 30 septembre 1999. Un
ecart positif representera une augmentation du prix d'achat
tandis qu'un ecart negatif constituera une diminution du prix de
vente devant etre compensee, notamment, par la retenue mentionnee
au paragraphe 3.1 iv). Apres cet ajustement resultant des Etats
financiers 2000, tout autre ajustement a la baisse au-dela
d'une franchise totale et cumulative de 10 000,00 $ sera puise a
meme la retenue decrite au paragraphe 3.1 iv). Pour les fins des
presentes, l'actif net ajuste est defini par le total de l'avoir
des actionnaires en tenant compte du montant de 344 000,00 $
verse par la Societe a titre de dividende le 31 janvier 2000
moins les frais de developpement et les licences apparaissant aux
etats financiers consolides de la Societe a la Date de cloture.
L'actif net ajuste au 30 septembre 1999 s'eleve a la somme de
1 311 259,00 $.
ii) Pour les fins de la presente clause, ne seront pas tenus compte,
tout passif eventuel ou provision determine par les verificateurs
de la Societe relatif aux contrats joints en annexe des presentes
et inclus dans les clauses de representations et garantis par la
clause d'indemnisation.
|
5.2 Si les comptes a recevoir de la Societe refletes aux Etats financiers 1999 ainsi qu'aux Etats financiers 2000 ne peuvent etre percus dans un delai de quatre-vingt-dix (90) jours de la Date de cloture et ne peuvent etre rembourses par la Societe d'Expansion des Exportations (SEE), lesdits comptes a recevoir devront etre consideres a titre de mauvaises creances et faire l'objet d'un ajustement de prix conformement au paragraphe 5.1 ci-avant. Dans un tel cas, le Vendeur se verra retroceder lesdits comptes a recevoir et conservera tout produit resultant de leur perception. Ces comptes a recevoir de la Societe provisionnes dans les Etats financiers 2000 devront etre retrocedes pour une somme de 1,00 $ au Vendeur sans autre ajustement du prix, et ce dernier pourra conserver tout produit resultant de leur perception.
5.3 Dans l'eventualite ou le montant de 350 000,00 $ retenu conformement aux dispositions du paragraphe 3.1 iv) etait insuffisant pour satisfaire aux obligations du Vendeur resultant de ses representations et garanties
contenues a l'article 6 des presentes, le Vendeur accepte que puisse etre compensee, a meme le montant payable en vertu du rachat des actions privilegiees mentionnees aux paragraphes 3.1 ii), toute somme payable en vertu des presentes par le Vendeur que le montant de retenue ne suffit pas a acquitter.
5.4 Les Etats financiers 2000 devront faire l'objet d'une lettre de confirmation des verificateurs de l'Acquereur, aux frais de celui-ci, similaire dans sa teneur a celle prevue au paragraphe 8.1.5.
6. REPRESENTATIONS ET GARANTIES DU VENDEUR
6.1 Par son acceptation de la presente offre, le Vendeur represente et garantit a l'Acquereur ce qui suit et il reconnait que l'Acquereur se fonde sur ces representations et garanties en faisant la presente offre:
6.1.1 Representations et garanties portant sur les Actions
a) Titre de propriete
Les Actions sont detenues ou le seront d'ici la Date de cloture, par bon et valable titre de propriete, libre de toute charge quelconque et, apres leur transfert a l'Acquereur, ce dernier detiendra un titre bon et valable relatif aux Actions, libre de toute charge quelconque.
b) Aucune restriction
La vente et le transfert des Actions ne sont, a la date des presentes, et ne seront, a la Date de cloture, assujettis a aucune option ou affectation en faveur de qui que ce soit et leur transfert n'est, a la date des presentes, et ne sera, a la Date de cloture, assujetti a aucune restriction en vertu des statuts ou des statuts de modification ou reglements de la Societe ou en vertu de toute convention quelconque a laquelle le Vendeur ou la Societe sont parties, ou le cas echeant, il aura ete satisfait aux exigences des dispositions des statuts ou des statuts de modification ou des reglements de la Societe ou des dispositions de toute telle convention de maniere a ce que les Actions puissent etre validement transferees a l'Acquereur.
6.1.2 Representations et garanties portant sur la Societe
a) Statut corporatif
La Societe est presentement et sera a la Date de cloture une societe fermee au sens de la Loi sur les valeurs mobilieres (Quebec); elle est presentement et sera a la Date de cloture une corporation valide et existante dument constituee en corporation et organisee en vertu
de la
Loi canadienne sur les societes par actions, en regle en vertu des lois qui la regissent et possedant tous les pouvoirs corporatifs pour exercer ses activites comme elle les exerce habituellement. La Societe n'a pas ete empechee, ni n'a recu d'avis pour l'empecher de faire affaire dans toutes les juridictions ou elle fait affaires.
b) Capital-actions autorise
Le capital-actions autorise de la Societe est presentement et sera, a la Date de cloture constitue d'un nombre illimite d'actions categorie "A", categorie "B", categorie "C", categorie "D", categorie "E", categorie "F", categorie "G" et categorie "H", toutes sans valeur nominale.
c) Capital-actions emis
Du capital-actions autorise de la societe, 14 190 actions de categorie "D", 9 810 actions de categorie "E", 9 000 actions de categorie "F", 6 000 actions de categorie "G" et 6 000 actions de categorie "H" sont dument emises et en circulation comme entierement acquittees et non cotisables et le compte capital declare afferent a ces actions s'eleve presentement a la somme de 194,35 $ pour les actions de categorie "D", 134,35 $ pour les actions de categorie "E", 300 007,00 $ pour les actions de categorie "F", 145 082,15 $ pour les actions de categorie "G" et 82,15 $ pour les actions de categorie "H".
d) Aucune option
Il n'y a presentement et il n'y aura a la Date de cloture aucune option ni aucun droit de souscription en cours relativement aux actions non emises du capital-actions de la Societe ou relativement a toute autre valeur mobiliere non emise de la Societe.
e) Aucune procuration
La Societe n'a donne aucune procuration irrevocable a quelque personne, firme ou corporation pour quelque fin que ce soit qui pourrait avoir pour effet de la lier sans son assentiment.
f) Livres et registres
Les livres et registres de la Societe revelent et reveleront a la Date de cloture fidelement a tous les egards la situation financiere suivant les principes comptables generalement reconnus et toutes transactions financieres y sont et seront dument inscrites.
g) Documents corporatifs
Les livres de proces-verbaux et les autres documents corporatifs de la Societe contiennent un dossier exact de toutes les reunions, actions et procedures de leurs administrateurs et actionnaires et ne revelent aucune illegalite ou irregularite.
h) Etats financiers de la Societe
i) Les Etats financiers 1999 ont ete prepares conformement aux principes comptables generalement reconnus appliques de la meme maniere qu'au cours de l'exercice financier precedent, representent fidelement et avec exactitude la situation financiere de la Societe a pareille date et demontrent ou refletent tout le passif de la Societe a telle date (incluant, mais sans restriction, toutes dettes resultant de l'impot sur le revenu et toutes autres taxes dues ou echues), y compris son passif eventuel qui, suivant les principes comptables generalement reconnus, doit etre reflete dans des etats financiers, et ils representent fidelement le resultat des operations de la Societe pour l'exercice financier termine a cette date.
ii) Depuis la date a laquelle ont ete arretes les Etats financiers 1999 jusqu'a la Date de cloture, il n'y aura aucun changement dans la methode utilisee par la Societe pour evaluer ou comptabiliser son actif ou son passif.
i) Divulgation aux Etats financiers
Sans limiter la portee du paragraphe h):
i) sous reserve des provisions pour mauvaises creances mentionnees dans les Etats financiers 1999 ou dans les Etats financiers 2000, tous les comptes a recevoir de la Societe refletes aux Etats financiers 1999 et tous les comptes a recevoir de la Societe crees dans le cours normal de ses affaires depuis cette date, jusqu'a la Date de cloture ont ete percus ou pourront etre percus pour leur valeur nominale globale.
ii) les biens en inventaire de la Societe refletes aux Etats financiers 2000 qui n'auront pas fait l'objet d'une provision aux Etats financiers 2000 consistent et
consisteront en des produits d'une qualite requise pour permettre la vente dans le cours normal des affaires.
iii) une provision de desuetude de 115 000.00 $ sera incluse dans les Etats financiers 2000 et aucune autre provision de desuetude ne devra avoir pour effet de reajuster le prix.
j) Aucune transaction hors du cours ordinaire
La Societe n'a depuis la date des Etats financiers 1999, fait aucune transaction en dehors du cours normal et ordinaire de ses affaires, et elle ne fera, sans le consentement ecrit au prealable de l'Acquereur, aucune transaction en dehors du cours normal et ordinaire de ses affaires entre la date de la presente offre et la Date de cloture, ceci comprenant notamment aucune depense d'immobilisation, aucune reparation majeure d'un montant cumulatif de 5 000.00 $ et aucun engagement d'une duree superieure a douze (12) mois, a l'exception de ceux decrits a l'Annexe 6.1.2 j).
k) Pas de paiement hors du cours ordinaire des affaires
Sauf tel que mentionne a l'Annexe 6.1.2 k), entre la date des Etats finnaciers 1999 et la Date de cloture, la Societe:
i) n'aura pas encouru de dettes ou fait de paiements autrement que dans le cours normal de ses affaires;
ii) n'aura pas emprunte d'argent autre que des emprunts de banques canadiennes ou d'institutions preteuses dans le cours normal de ses affaires;
iii) n'aura pas consenti de pret ou d'avance a quelque personne que ce soit;
iv) n'aura consenti aucune augmentation de la remuneration payee ou a payer aux dirigeants, officiers, administrateurs et employes de la Societe et aucune augmentation des avantages sociaux payables a ceux-ci en vertu de caisses de retraite, de regimes d'interessement et autres regimes analogues et n'auront effectue aucun paiement ou autre disposition a titre onereux ou gratuit en leur faveur, autrement que dans le cours normal et habituel de ses affaires; et
v) n'auront paye ou promis de payer aucun boni ou prime aux dirigeants, officiers, administrateurs et employes de la Societe.
l) Pas de changement defavorable
Entre la date des Etats financiers 1999 et la Date de cloture, il n'y aura eu aucun changement substantiel defaborable dans la situation financiere de la Societe.
m) Titre de propriete des biens de la Societe
La Societe est presentement et sera a la Date de cloture proprietaire par titre bon et valable de tous les biens figurant a l'actif de la Societe reflete aux Etats financiers 1999 et aux Etats financiers 2000, a l'exception de ceux qui ont depuis la date de ces etats financiers fait l'objet d'une vente ou d'une disposition dans le cours normal des affaires, libre et quitte de tout privilege, charge ou affectation quelconque, sauf les affectations mentionnees aux Etats financiers 1999 et aux Etats financiers 2000, et sous reserve des charges grevant ces biens et mentionnees aux Etats financiers 1999 et aux Etats financiers 2000.
n) Demonstrateurs
Le Vendeur garantit l'existence physique de tous les demonstrateurs mentionnes a l'annexe 6.1.2 n) qui seront comptabilises aux Etats financiers 2000. Cette existence physique devra etre demontree par l'obtention de confirmations de la part des personnes physiques ou morales ayant possession de cesdits demonstrateurs. Tout demonstrateur perdu ou ne pouvant etre recupere dans un etat de fonctionnement apres la date de cloture dont l'existence physique a ete demontree conformement au present paragraphe, ne sera pas a la charge du Vendeur. Aucun demonstrateur ne concerne de produits discontinues ou n'est utilise que pour des fins de recherche et developpement. Tous les demonstrateurs comptabilises aux Etats financiers 1999 et aux Etats financiers 2000 peuvent etre mis a niveau (derniere version et revision de logiciels et electronique) pour une somme totale n'excedant pas 5 000,00 $. Toute depense additionnelle a 5 000,00 $ a ce chapitre sera a la charge du Vendeur.
o) Biens
Les biens utilises par la Societe pour l'exploitation de son entreprise sont, et seront a la Date de cloture, en bon etat d'entretien et de reparation eu egard a leur age respectif, ces biens sont aptes a l'usage auquel ils sont destines et se conforment en tous points a toutes lois, reglements ou ordonnances applicables.
p) Produits en developpement
Quatre (4) appareils de la version InGaAs 1310 1550 relatifs au projet Beaver (Power Meter & Source) seront presentes a l'OFC 2000 en version Alpha. Les prototypes demo des quatre (4) versions les plus importantes en terme de revenu selon les etats financiers previsionnels de la Societe remis a l'Acquereur prealablement a la Date de cloture des produits en developpement seront disponibles en avril 2000 et seront qualifies et de qualite client pour livraison des le debut mai 2000. Le Vendeur declare et garantit que la Societe aura produit au 1er mai 2000 au total trente (30) unites demonstrateurs de ces produits. Toute semaine de retard pour produire les trente (30) unites demonstrateurs, selon une repartition a etre convenue raisonnablement par l'Acquereur et le Vendeur pour le 30 avril 2000, qualifies et de qualite client emportera une penalite de 10 000,00 $ par semaine complete avec une penalite maximum de 50 000,00 $, dans la mesure ou tel retard ne peut etre attribuable a l'Acquereur ou a une cause exterieure, hors du controle de la Societe et apres que celle-ci ait agit avec competence et diligence afin de remplir son obligation.
q) Passage a l'an 2000
La Societe a pris, en temps opportun, les mesures necessaires relativement au passage de l'an 2000 et tous ses produits et systemes informatises ou automatises sont adaptes au passage de l'an 2000 et seront en tout temps operationnels a cet egard.
r) Exploitation de l'entreprise
A compter de la date des presentes jusqu'a la Date de cloture, la Societe conduira ses affaires avec diligence et de la maniere normale et habituelle en s'abstenant de toutes modifications dans ses pratiques habituelles de vente, de comptabilite et de fonctionnement.
s) Aucune emission
Sauf tel que mentionne a l'Annexe 6.1.2.s), entre la date des Etats financiers 1999 et la Date de cloture, celle-ci n'aura cree ni emis aucune obligation, debenture, hypotheque, charge ou autre obligation semblable.
t) Rapports
Sous reserve des taxes auxquelles il est fait reference au paragraphe 8.1.6, a la Date de cloture, la Societe aura produit, en temps utile, aupres des autorites gouvernementales competentes dans tous territoires ou elle doit les produire, tous rapports d'impot, et autres
rapports et declarations de quelque nature ou espece que ce soit, qu'elle est alors tenue de produire en vertu de toute loi ou de tout reglement auxquels elle est assujettie dans toute juridiction applicable, a l'exception des rapports d'impot que la Societe sera tenue de produire apres la Date de cloture en raison du changement de controle resultant de la presente offre.
u) Impots et taxes
A la connaissance du Vendeur, la Societe ne fait pas l'objet d'une verification par les autorites fiscales de tous territoires dans lesquels elle exerce ses activites et a la Date de cloture, tous les impots, cotisations et autres charges gouvernementales incluant, mais sans restriction tout interet, taxe, penalite et amende, affectant la Societe ou ses biens qui sont dus et exigibles auront ete payes ou des provisions suffisantes pour les acquitter auront ete faites; les charges et provisions apparaissant aux livres de la Societe ou dans les Etats financiers 1999 relativement aux impots pour toutes les annees anterieures sont suffisantes; de plus, aucune autorite ayant juridiction n'aura fait avant la Date de cloture ou ne fera apres cette date de reclamation contre la Societe pour impot, taxe, interet, penalite et amende resultant de toute cotisation nouvelle ou additionnelle ou du defaut de la Societe ou de ses administrateurs ou officiers de remplir quelque formalite ou d'acquitter quelque somme d'argent dont l'accomplissement ou le paiement est prescrit par toute loi ou par tout reglement applicable a l'exception des montants qui seront provisionnes aux Etats financiers 2000.
Le Vendeur garantit a l'Acquereur que tous les credits d'impot a la recherche et au developpement reclames par la Societe au cours des quatre (4) annees, anterieures a la Date de cloture ne feront pas l'objet de recotisation de la part des autorites fiscales et que ceux mentionnes aux Etats financiers 1999 et aux Etats financiers 2000 seront effectivement encaisses par la Societe.
v) Retenues a la source
La Societe ne sera pas en retard a la Date de cloture dans la remise aux autorites gouvernementales concernees des impots ou autres deductions devant faire l'objet de retenues a la source a l'egard de chaque paiement fait a l'un quelconque de ses officiers, administrateurs ou employes.
w) Aucune prolongation de delai
Il n'y a presentement et il n'y aura a la Date de cloture aucune entente, renonciation ou autre arrangement prevoyant des prolongations de delai pour la production de tout rapport d'impot ou pour le paiement de tout impot ou autres charges fiscales par la Societe.
x) Aucune reclamation
Sous reserve des litiges opposant la Societe a l'Acquereur, lesquels ont fait l'objet de declarations de reglements hors cour et de quittances, il n'y a presentement et il n'y aura a la Date de cloture aucune reclamation en cours de quelque nature que ce soit contre la Societe et il n'y aura aucune action, poursuite pour procedure intentee contre la Societe ou a la connaissance du Vendeur, de menace d'action, de poursuite ou de procedure dont la Societe ou ses biens respectifs pourraient etre l'objet et qui pourrait entrainer le paiement de sommes d'argent non entierement couvert par assurances ou a l'egard duquel la Societe n'aurait pas fait de provisions adequates dans les Etats financiers 1999.
y) Aucun dividende ou rachat d'actions
Sauf tel que mentionne a l'Annexe 6.1.2 y), entre la date des Etats financiers 1999 et la Date de cloture, la Societe n'aura declare, paye ni promis aucun dividende ou autre distribution de ses biens a ses actionnaires ni consenti aucun pret a l'un quelconque de ses actionnaires ni rachete ni distribue son capital verse.
z) Conventions d'emploi et conventions collectives
Sauf tel que mentionne a l'Annexe 6.1.2 z), il n'y a presentement et il n'y aura a la Date de cloture aucune convention d'emploi ou de service avec des administrateurs, officiers, agents, conseillers ou autres employes de la Societe, a l'exception des conventions verbales d'emploi d'une duree indeterminee resiliables moyennant les preavis prevus par la Loi sur les normes du travail. En outre, il n'y a aucune convention colletive de travail liant la Societe a ses employes respectifs, et il n'y a presentement et il n'aura a la Date de cloture, aucune requete en accreditation en cours au sein de la Societe.
aa) Assurance collective et plan de pension
Sauf tel que mentionne a l'Annexe 6.1.2 aa), il n'y a presentement et n'y aura, a la Date de cloture, aucun regime de participation differee aux benefices, aucun regime de remuneration differee, aucun plan de pension et de distribution de profits ou de compensation ni aucun autre systeme d'avantages sociaux pour les employes, administrateurs ou officiers de la Societe.
bb) C.S.S.T.
La Societe a paye toutes ses cotisations echues et exigibles a la
Commission de la Sante et Securite du Travail et a l'exception de deux
(2) employes en conge de maternite, le cas echeant, aucun de ses
employes ne retire presentement d'indemnite en vertu de la Loi sur les
accidents de travail et maladies professionnelles (Quebec)
relativement a une lesion professionnelle survenue dans le cadre de
son emploi au sein de la societe. Les couts relatifs a la Commission
de la Sante et securite au Travail ont ete dument enregistres aux
etats financiers 1999.
cc) Non-resident
La Societe n'est pas presentement, et elle ne sera pas a la Date de cloture, un "non-resident" pour les fins de l'application des lois fiscales.
dd) Aucun defaut
La Societe n'est pas presentement et ne sera pas a la Date de cloture en defaut en vertu des contrats ou autres engagements auxquels elle est partie, ni en defaut de payer quelque dette ou reclamation et sauf tel que mentionne a l'Annexe 6.1.2 dd) la Societe ne sera a la Date de cloture liee par aucun engagement de non-concurrence relativement a l'exercice de ses affaires.
ee) Aucun engagement prejudiciable
La Societe n'est presentement et ne sera, a la Date de cloture, partie a aucun contrat ou engagement dont l'execution ou l'accomplissement dans des conditions normales, telles qu'elles existent presentement et existeront a la Date de cloture, ne lui permettront pas de realiser un profit normal selon les previsions raisonnables de la Societe au moment de la signature de tel contrat ou engagement.
ff) Assurances
La Societe maintient et maintiendra jusqu'a la Date de cloture des assurances couvrant tous les risques raisonnables a l'egard de ses biens et de sa responsabilite civile et pour des montants qu'un administrateur prudent exercant une entreprise semblable a son entreprise maintiendrait.
gg) Environnement
i) Sauf tel que mentionne a l'Annexe 6.1.2 gg) la Societe respecte toutes les lois, tous les reglements, toutes les ordonnances, tous les permis ou decisions applicables en matiere d'environnement dans la province de Quebec;
ii) La Societe n'a recu aucun avis de non-conformite et a la connaissance du Vendeur, il n'existe aucun fait pouvant donner lieu a un avis de non-conformite aux lois, reglements, ordonnances, permis ou decisions relatifs a l'environnement dans la province de Quebec;
iii) A la connaissance du Vendeur, il n'a a eu aucune poursuite, reclamation, procedure, enquete, ordonnance ou menace de poursuite, de reclamation, de procedure, d'enquete ou d'ordonnance en matiere d'environnement contre ou concernant la Societe; et
iv) Sauf tel que mentionne a l'Annexe 6.1.2 gg) la Societe n'a a disposer d'aucun produit toxique qui doit etre deplace pour respecter les normes environnementales.
hh) Droits immobiliers
La Societe ne possede aucun droit, titre ou interet dans des proprietes immobilieres, a l'exception de ses droits decoulant du bail pour l'immeuble sis au 500, rue St-Jean Baptiste, Quebec, Qc, G2E 5R9.
II) Filiales et autres interest
La Societe ne possede aucune autre filiale et ne detient aucun autre interet dans une entite apparentee, a l'exception de la detention de toutes les actions du capital-actions de Nortech Fibronic inc. (U.S.A.).
jj) Partenariats ou "Joint Ventures"
La Societe n'est pas un partenaire ou un participant dans quelconque partenariat ou "joint venture", coentreprise ou autre association de tout type ni n'est partie a quelconque entente par laquelle la Societe consent a exercer une certaine partie de l'entreprise ou toute autre activite par laquelle la Societe consent a partager les revenus ou les profits avec toute autre personne ou entite, a l'exception des commissions, bonis et escomptes payables ou consenti a ses employes, agents et distributeurs dans le cours normal des affaires.
kk) Restrictions quant a l'exercice des activites de l'entreprise
Sauf tel que mentionne a l'Annexe 6.1.2 kk), la Societe n'est partie ni liee a aucune entente qui pourrait restreindre ou limiter ses droits d'exercer ses activites dans tout territoire geographique. Il n'y a aucun fait ni circonstance qui pourrait affecter de facon determinante la possibilite pour la Societe de continuer a operer son entreprise tel qu'elle l'opere actuellement.
ll) Aide et subventions gouvernementales
La Societe respecte toutes et chacune de ses obligations en vertu des programmes d'assistance gouvernementaux auxquels elle est partie et, sous reserve des aides du CNRC en vertu du programme PARI, aucune base legale n'existe pour que toute autorite gouvernementale tente de recevoir paiement ou remboursement par la Societe de toute somme ou avantage recu par la Societe en vertu de programmes d'assistance gouvernementaux et/ou fasse valoir des droits dans la propriete intellectuelle ou autre bien en inventaire de la Societe.
mm) Propriete intellectuelle
Sauf tel que mentionne a l'Annexe 6.1.2 mm)i)A)
i) La Societe n'enfreint, n'utilise illegalement, n'a recu d'avis ni de reclamation decoulant d'une pretendue violation de la propriete intellectuelle detenue ou reclamee par un tiers, a la connaissance du Vendeur, la propriete intellectuelle de la Societe (incluant les logiciels, le materiel informatique, les marques de commerce, et les brevets decrits a l'Annexe 6.1.2 mm)ii)B), les secrets de commerce, les inventions, les dessins industriels, les droits d'auteur) ci-apres la "Propriete intellectuelle", n'est actuellement violee par quiconque. La Societe n'est pas partie a quelconque entente de confidentialite a l'exception de celle
contenues aux documents deposes aux annexes jointes a la
presente ainsi que celles qui seront mentionnees a la liste
qui sera remise a l'Acquereur par le Vendeur dans les trente
(30) jours de la Date de Cloture.
ii) Tous les inventeurs mentionnees aux brevets de l'Annexe 6.1.2 mm) ii)B) qui sont egalement employes de la Societe devront avoir renonce, a la Date de cloture au benefice de la Societe, a leurs droits economiques, a titre d'auteurs ou d'inventeurs.
iii) La Propriete intellectuelle de la Societe a ete developpee par des employes de la Societe au moment ou ces derniers etaient employes par la Societe ou acquis a l'occasion de l'acquisition des actifs de Antel Optronics inc.
iv) La Societe n'a aucune obligation de compenser quiconque pour le developpement, l'utilisation, la vente ou l'exploitation de la Propriete intellectuelle ni n'a octroye a d'autres personnes ou entite des licences, options ou autres droits de developper, utiliser, vendre ou exploiter de quelque facon que ce soit la Propriete intellectuelle, sujet ou non au paiement de royautes.
nn) Noms et marques de commerce
Le Vendeur declare et garantit que la Societe est veritable proprietaire au Canada du nom "Nortech Fibronic inc." ainsi que de toutes les marques de commerce relatives aux produits de la Societe mentionnees a l'Annexe 6.1.2 ii)B).
oo) Representations et garanties diverses
i) Tous les troncs communs des produits et instruments decrits a l'Annexe 6.1.2 oo) ii) commercialises par la Societe a la Date de cloture possedent les certificats necessaires selon les normes EC (entre autres IEC 1010) et FDA, tel que stipule a l'Annexe 6.1.2 oo)ii). Tout montant devant etre paye (cout reel) pour l'obtention de telle certification pour les produits commercialises a la Date de cloture, a la suite d'une decision d'un organisme gouvernemental ou de reglementation, sera preleve a meme la retenue prevue au paragraphe 3.1 iv) jusqu'a concurrence de 10 000,00 $ par "tronc commun" d'appareils pour les normes EC et jusqu'a concurrence de 5 000,00 $ par "tronc commun" d'appareils pour les
normes FDA. L'Acquereur convient qu'aucun cout de certification ne sera preleve a l'egard des dossiers deja completes relatifs aux normes FDA mais non encore transmis a la Date de cloture.
ii) La Societe aura acquitte ou provisionne tous les frais de maintien des brevets qu'elle possede et qu'elle entend conserver conformement a l'Annexe 6.1.2.mm)ii)B), a la Date de cloture.
iii) Le Vendeur represente et garantit que le contrat OEM avec Wavetek generera des ventes de 255 000,00 $US pour la periode de janvier 2000 a septembre 2000 inclusivement. Si la Societe realise moins que 255 000,00 $US de vente sans que la perte du chiffre d'affaires ne puisse etre attribuable a une action ou une decision de l'Acquereur, un ajustement a la baisse du prix d'achat egal a 15% de la difference entre le montant reel des ventes et 255 000,00 $US sera effectue et les sommes seront prelevees a meme la retenue prevue au paragraphe 3.1 iv) jusuq'a concurrence de 15 000,00 $US. Si la Societe realise plus de 340 000,00 $US de ventes, un ajustement a la hausse du prix d'achat egal a 15% de la difference, entre 340 000,00 $US et le montant reel de la vente sera effectue jusqu'a concurrence de 15 000,00 $US payable au Vendeur sur encaissement.
pp) Veracite et duree des representations a l'egard de la Societe et sa filiale
Les representations et garanties enumerees au present article 6 sont, et seront vraies et exactes a la Date de cloture, tant a l'egard de la Societe qu'a l'egard de sa filiale. A l'egard de sa filiale, toutes les representations et garanties de la Societe s'appliquent et sont effectuees par la filiale, mutatis mutandis lorsqu'applicable et en y apportant les adaptations necessaires. Toutes les representations et garanties survivront pour une periode de trois (3) ans de la Date de cloture, a l'exception des representations et garanties relatives aux impots, taxes et taxes de vente lesquelles survivront pour une periode de quatre (4) ans a compter de la Date de cloture.
7. REPRESENTATIONS ET GARANTIES DE L'ACQUEREUR
7.1 Pour sa part, l'Acquereur represente et garantit par les presentes ce qui suit:
7.1.1 L'Acquereur a obtenu toutes les autorisations requises pour soumettre
la presente offre au Vendeur et pour conclure toutes les transactions
decoulant de son acceptation.
7.1.2 L'Acquereur n'est pas un "non-canadien" au sens de la Loi concernant
l'investissement au Canada.
7.1.3 L'Acquereur est resident du Canada aux fins de la Partie I de la Loi
de l'impot sur le revenu (Canada).
7.1.4 L'Acquereur garantit au Vendeur que les actions de categorie "G" qui
seront emises en faveur du Vendeur en paiement du prix de vente et
remises a la seance de cloture auront ete validement emises comme
entierement liberees du capital-actions de l'Acquereur et toutes les
autorisations requises pour l'emission desdites actions de categorie
"G" auront ete validement obtenues.
7.1.5 L'Acquereur garantit au Vendeur et s'engage envers Groupe Noel et
Groupe Bedard a voter et agir de maniere a ce que le dividende declare
en date du 31 janvier 2000 de 344 000,00 $ soit paye simultanement a
la seance de cloture.
8. AUTRES CONDITIONS PREALABLES A LA CLOTURE
8.1 L'obligation de l'Acquereur d'acheter et de payer les Actions
conformement aux presentes est assujettie a l'exactitude des
representations et garanties contenues a l'article 6 et suivants et a
l'accomplissement des conditions additionnelles qui suivent:
8.1.1 Acces aux livres, registres, informations et documents
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La Societe devra, en tout temps raisonnable entre la date d'acceptation de la presente offre et la Date de cloture, permettre aux representants et employes de l'Acquereur ainsi qu'a PricewaterhouseCoopers et a Lavery, de Billy libre acces a tous ses livres, registres et documents dans le but de les examiner et devra fournir auxdits representants, employes, verificateurs et avocats tous les renseignements qu'ils pourront raisonnablement demander relativement aux affaires, operations et biens de la Societe.
8.1.2 Aucun dommage aux biens
Entre la date de la presente offre et la Date de cloture, les biens de la Societe n'auront subi aucun dommage ou perte susceptible d'affecter d'une maniere prejudiciable ses operations.
8.1.3 Procedes corporatifs
Entre la date d'acceptation de la presente offre et la Date de cloture, tous les actes et procedes corporatifs juges necessaires par Lavery, de Billy seront accomplis pour permettre, a la Date de cloture, le transfert valide en faveur de l'Acquereur des Actions et, a la Date de cloture, tous les consentements necessaires des administrateurs, actionnaires ou autres qui peuvent etre requis en vertu des statuts, statuts de modification ou reglements de la Societe ou en vertu de toute convention a laquelle la Societe ou le Vendeur est partie, ou en vertu de toute loi ou reglement applicable seront obtenus de facon a ce que les Actions soient transferees a l'Acquereur.
8.1.4 Opinion favorable
i) A la Date de cloture, l'Acquereur devra recevoir une opinion favorable de Desjardins, Ducharme, Stein, Monast, dans une forme et une teneur acceptables a Lavery, de Billy, relativement a:
a) la constitution en corporation, l'organisation et le statut corporatif de la Societe;
b) le capital-actions autorise et emis de la Societe;
c) la capacite et les pouvoirs de 9086-9330 Quebec inc. et de 9085-9314 Quebec inc. de s'engager aux termes de la presente offre et aux termes des transactions qui en decoulent, et;
d) tout autre opinion que Lavery de Billy pourra raisonnablement demander.
ii) A la Date de cloture, le Vendeur devra recevoir une opinion favorable de Lavery, de Billy, dans une forme et une teneur acceptables a Desjardins, Ducharme, Stein, Monast, relativement a:
a) la constitution en corporation, l'organisation et le statut corporatif de l'Acquereur;
b) le capital-actions autorise et emis de l'Acquereur;
c) la capacite et les pouvoirs de l'Acquereur de s'engager aux termes de la presente offre et aux termes des transactions qui en decoulent, et;
d) tout autre opinion que Desjardins Ducharme Stein Monast pourra raisonnablement demander.
8.1.5 Lettre de confirmation des verificateurs de l'Acquereur
L'Acquereur devra avoir recu une lettre de PricewaterhouseCoopers, comptables agrees, a l'effet qu'ils ont examine les documents de travail et procedes de verification utilises aux fins de la preparation des Etats financiers 1999 et qu'ils ont obtenu des officiers de la Societe tous les renseignements qu'ils ont juge necessaires de demander dans les circonstances et qu'ils n'ont rien constate qui pourrait laisser croire que:
a) lesdits Etats financiers 1999 n'ont pas ete etablis conformement aux principes comptables generalement reconnus appliques de la meme maniere qu'au cours des exercices anterieurs;
b) la verification desdits Etats financiers 1999 n'a pas ete effectuee selon les methodes de verification generalement reconnus et selon les normes prescrites ou recommandees par l'Institut Canadien des Comptables Agrees; ou
c) des faits pertinents existent et ne sont pas divulgues dans lesdits Etats financiers 1999.
8.1.6 Lettre de confirmation relative aux prelevements de taxes de vente americaines
L'Acquereur devra avoir recu une lettre de confirmation de Ernst & Young, comptables agrees dans les soixante (60) jours de la Date de cloture a l'effet qu'ils ont examine de facon detaillee les implications potentielles du paiement des taxes de vente americaines a etre effectue par la Societe. Tout paiement devant etre effectue a cet egard sera preleve a meme la retenue prevue au paragraphe 3.1 iv), etant entendu que monsieur Michel Bedard sera responsable pour la Societe de travailler en collaboration avec Ernst & Young afin de determiner telles implications potentielles.
8.1.7 Engagement de non-concurrence
A la Date de cloture, l'Acquereur devra avoir recu du Groupe Noel et du Groupe Bedard, en sus de tous autres engagements de meme nature contenus dans le contrat d'emploi mentionne a l'article 4, un engagement ecrit de non-concurrence aux termes duquel le Vendeur s'engagera, a compter de la Date de cloture, a ne pas, directement ou indirectement faire concurrence a l'Acquereur et a la Societe en oeuvrant dans le meme domaine que la Societe ou que l'Acquereur (soit les appareils de mesure et de performance de fibre optique) dans tous territoires desservis par la Societe et l'Acquereur, pendant une periode de quatre (4) ans a
compter de la Date de cloture. Le Groupe Noel et le Groupe Bedard s'engagent egalement a ne pas solliciter les clients (sauf si telle sollicitation ne constitue pas une concurrence prohibee en vertu du present article) ou employes de la Societe, personnellement ou par l'intermediaire d'une autre entite dont il serait actionnaire, amener ou inciter toute personne, corporation ou organisme a mettre fin a ses relations d'affaires ou d'emploi avec la Societe, ou a poser tout acte de nature a faire concurrence a la Societe. Toute contravention aux dispositions ci-dessus entrainera pour le Vendeur le paiement en faveur de l'Acquereur, a titre de dommages-interets liquides, d'une penalite de 1 2000,00 $ par jour tant que persistera la contravention, tels dommages pouvant etre compenses avec tout solde de prix de vente demeurant impaye au Vendeur et sans prejudice a toute procedure d'injonction pour faire cesser telle contravention.
8.1.8 Demission des administrateurs et officiers
A la Date de cloture, le Vendeur fera en sorte qu'une assemblee du conseil d'administration de la Societe soit tenue, a laquelle les administrateurs de la Societe demissionneront respectivement a tour de role pour etre remplaces par des personnes designees par l'Acquereur et a laquelle les officiers de la Societe offriront respectivement leur demission, pour prendre effet seance tenante.
8.1.9 Renonciation a tous droits et recours
A la Date de cloture, le Vendeur ainsi que tous les administrateurs et officiers de la Societe fourniront respectivement une renonciation, en la forme prescrite par Lavery, de Billy, a tous les droits et recours qu'ils ont ou pourraient alors avoir contre la Societe, a quelque titre, pour quelque periode, et pour quelque raison que ce soit a l'exception de tout recours eventuel concernant les elements provisionnes aux Etats financiers 2000 relatifs aux salaires courus, aux remboursements de frais de representation courus, aux vacances et au paiement des dividendes au 31 janvier 2000, qui ne seraient pas payes a echeance.
8.1.10 Actes anterieurs
A la date de cloture, le Vendeur confirmera et ratifiera, en tant qu'actionnaire de la Societe, en la forme qui sera prescrite par Lavery, de Billy, tous les actes poses par la Societe depuis sa constitution en corporation jusqu'a la Date de cloture.
8.1.11 Bail commercial
A la Date de cloture, le Vendeur aura fourni a l'Acquereur une confirmation ecrite du proprietaire, en la forme prescrite par Lavery, de Billy, que le bail servant a l'exploitation de l'entreprise de la Societe sise au 500, rue St-Jean Baptiste, Quebec, Qc, G2E 5R9 pourra etre cede ou transfere a l'Acquereur au moment ou ce dernier le jugera opportun, sans la necessite d'obtenir toute autre autorisation prealable.
9. RESILIATION DE LA PRESENTE OFFRE PAR L'ACQUEREUR
9.1 Advenant:
i) que l'une ou plusieurs des representations et garanties contenues a l'article 6 et suivants des presentes se revelent substantiellement fausses ou erronees; ou
ii) que l'Acquereur apprenne un fait ou obtienne un renseignement ou une information veridique qui est de nature a affecter de facon substantiellement defavorable l'entreprise, les biens, les revenus ou la situation (financiere ou autre) de la Societe ou la valeur ou l'existance de celle-ci; ou
iii) que l'une des conditions prealables a la realisation de la transaction faisant l'objet de la presente offre ne soit pas remplie;
iv) et que le Vendeur ne puisse y remedier ou n'y remedie pas avant la Date de cloture.
9.2 Advenant :
i) que l'Acquereur soit insatisfait du resultat de la verification diligente effectuee conformement aux dispositions de l'article 8.
9.3 Dans le cas vises au present article 9, l'Acquereur aura alors droit, a sa seule discretion, de denoncer et resilier la presente offre, auquel cas l'Acquereur et le Vendeur seront liberes de toutes leurs obligations en vertu de la presente offre sans encourir aucune responsabilite.
10. CLOTURE ET DATE EFFECTIVE DE LA VENTE
10.1 La transaction envisagee aux termes de la presente offre devra etre
conclue comme en date du 4 fevrier 2000, au plus tard le 7 fevrier
2000, telle date etant designee aux presentes la "Date de cloture", a
16:00 heures au
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cabinet de Lavery, de Billy, sis au 925, chemin Saint-Louis, bureau
500, a Quebec, province de Quebec, G1S 1C1.
11. LIVRAISON DES ACTIONS
11.1 A la Date de cloture, le Vendeur devra livrer, les certificats
representant les Actions dument endosses pour en permettre le
transfert dans les registres de la Societe.
12. INDEMNISATION
12.1 Sans prejudice a tout autre recours de l'Acquereur, et apres
reception d'un avis prealable de quarante-cinq (45) jours et du droit
du Vendeur dans ce delai de remedier a tel defaut, de prendre fait et
cause pour l'Acquereur ou de contester toute reclamation, le Vendeur
s'engage a indemniser l'Acquereur en excedent de la franchise de
l'article 5.1 de toute pertes, de tous frais ou de tous dommages que
ce dernier pourrait subir ou encourir par suite de toute
inexactitude, violation ou contravention par le Vendeur a ses
declarations, garanties et engagements contenus aux presentes ou par
suite de toutes reclamations dirigees contre la Societe ou
l'Acquereur resultant du defaut ou du pretendu defaut de la Societe
(anterieurement a la Date de cloture) ou du Vendeur, de remplir ses
obligations.
12.2 Le Vendeur aura en outre, le droit de contester, a ses frais, au nom
de l'Acquereur, tout passif, toute dette, tout contrat, tout
engagement, toute cotisation ou toute reclamation pour lesquels le
Vendeur pourrait etre tenu responsable comme susdit. L'Acquereur et
la Societe conviennent d'offrir leur entiere collaboration a toute
demarche entreprise par le Vendeur ou ses conseillers juridiques en
vue de la contestation de tels passif, dette, contrat, engagement,
cotisation ou reclamation.
13. ENGAGEMENTS DIVERS
13.1 Le Vendeur s'engage a deposer aupres d'un fiduciaire designe par
l'Acquereur, les actions categorie "A" resultant de la conversion
des actions de categorie "G" qui pourraient etre emises conformement
au paragraphe 3.1 ii) et ce, jusqu'au 30 novembre 2002. Pendant cette
periode, le Vendeur pourra exercer tous les droits rattaches a ses
actions sans toutefois pouvoir en disposer avant le 30 novembre 2002.
13.2 Le Vendeur s'engage a faire verifier les Etats financiers 2000 au
plus tard le 6 mars 2000.
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13.3 La Societe devra ceder au Vendeur concerne, les polices
d'assurance-vie detenues par la Societe sur sa vie, a sa demande, pour
un prix egal au plus eleve de i) sa valeur de rachat ou ii) 1,00 $.
14. AVIS
14.1 Tout avis requis en vertu de la presente offre doit etre communique
par ecrit. Tout avis est valablement donne par sa livraison a son
destinataire, soit personnellement, soit par telecopieur, soit par
courrier recommande. Tout avis est repute avoir ete recu lors de sa
livraison, si livre personnellement, le jour suivant son envoi, si
donne par telecopieur, ou le troisieme (3e) jour suivant sa mise a la
poste, si donne par courrier recommande. Cependant, si le service de
la poste est interrompu par une greve, un ralentissement, un cas de
force majeure ou toute autre cause susceptible d'affecter la livraison
de l'avis par la poste, l'avis ne prendra alors effet que s'il est
livre personnellement ou envoye par telecopieur.
14.2 Tel avis doit etre adresse a la partie concernee a l'adresse figurant
ci-dessous ou a la derniere adresse que la partie concernee aura
communiquee a l'autre partie de la facon prevue ci-dessus a compter de
la date des presentes, soit:
Dans le cas du Vendeur:
Monsieur Claude-Adrien Noel et 9086-9330 Quebec inc.:
1119, du Hibou, Stoneham, Quebec, G0A 4P0
Madame Christine Bergeron
16, Chemin de la Chanterie, Stoneham, Quebec, G0A 4P0
Telecopieur : (418) 872-2894
Monsieur Michel Bedard et 9086-9314 Quebec inc.:
3032, Henri-Berntachez, St-Augustin-de-Desmaures, Quebec, G3A 2Y1
Societe en commandite Capidem enr.
1595, Boul. Hamel Ouest, Quebec, Quebec, G1N 3Y7
a/s Monsieur Pierre Tardif
Telecopieur: (418) 682-2376
avec copie a:
Me Jean Brunet
Desjardins Ducharme Stein Monast
1150, rue de Claire-Fontaine, bureau 300, Quebec, Quebec, G1R 5G4
Telecopieur: (418) 523-5391
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Dans le cas de l'Acquereur:
EXFO Ingenierie Electro-Optique inc.
465, avenue Godin
Vanier (Quebec) G1M 3G7
A l'attention de monsieur Germain Lamonde, president Telecopieur: (418) 683-9839
avec copie a:
Me Louis Rochette
Lavery, de Billy
915, chemin Saint-Louis, bureau 500, Quebec, Quebec, G1S 1C1
Telecopieur: (418) 688-3458
15. SEULE ENTENTE ET MODIFICATION
15.1 Entente entiere
i) La presente offre, lorsque acceptee par toutes les parties constituera l'entente entiere et la seule entente entre le Vendeur et l'Acquereur relativement a la transaction faisant l'objet des presentes et remplacera toutes les ententes, conventions et engagements anterieurs, verbaux ou ecrits.
15.2 Modification
i) Toute modification a la presente offre ou renonciation a un droit en decoulant sera sans effet si elle n'est explicite et constatee par un ecrit dument signes par toutes les parties.
16. DOCUMENTS ADDITIONNELS
16.1 Par son acceptation de la presente offre, le Vendeur convient de faire
et signer ou voir a ce que soient faits et signes, a l'occasion et
aussi souvent que requis, tous autres actes, documents ou ecrits et de
faire ou poser ou voir a ce que soient faits ou poses tous autres
actes ou choses que l'Acquereur pourrait raisonnablement demander,
soit aux fins de plus effectivement et completement donner effet a la
presente offre.
16.2 Les annonces publiques de la transaction constatee aux presentes sont
la seule prerogative de l'Acquereur. Elles devront cependant etre
precedees d'une communication prealable au Vendeur du communique de
presse pour fins de consultation.
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17. LOIS APPLICABLES
17.1 La presente offre est regie par les lois de la Province de Quebec.
18. TITRES
18.1 Les titres des articles, paragraphes et alineas aux presentes n'y
sont inseres que pour en facilier la consultation et n'affectent
aucunement leur interpretation.
19. NULLITE D'UNE DISPOSITION DE L'OFFRE
19.1 Toute decision d'un tribunal a l'effet que l'une quelconque des
dispositions des presentes est nulle ou non executoire n'affectera
aucunement les autres dispositions des presentes ou leur validite ou
force executoire.
20. FRAIS ET HONORAIRES PROFESSIONNELS
20.1 Tous les frais, meme indirects, encourus par le Vendeur et decoulant
de la presente offre sont a sa charge, a l'exception des honoraires
professionnels de preparation des Etats financiers 2000 dont un
montant maximal de 7 500,00 $ sera assume par l'Acquereur sur
presentation de pieces justificatives.
20.2 Tous les frais, meme indirects, encourus par l'Acquereur et decoulant
de la presente offre sont a sa charge.
21. ACCEPTATION DE L'OFFRE
21.1 Advenant votre accord avec la presente offre, veuillez confirmer
a l'Acquereur votre acceptation en signant la copie ci-jointe, a
l'endroit ci-apres indique, apres en avoir paraphe chaque page ainsi
que les annexes et en la retournant a l'Acquereur au plus tard
a 15:00 heures le 7 fevrier 2000. A defaut de ce faire, la presente
offre sera nulle et de nul effet a toutes fins que de droit.
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DATEE ET SIGNEE aux endroits et aux dates mentionnees.
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Par : s/s Germain Lamonde
-----------------------------------------
Germain Lamonde, president Quebec, le 7 fevrier 2000
Par : s/s Pierre Plamondon
-----------------------------------------
Pierre Plamondon, vice-president Finances Quebec, le 6 fevrier 2000
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ACCEPTATION
s/s Claude-Adrien Noel ----------------------------------------- Claude-Adrien Noel Quebec, le 6 fevrier 2000 s/s Michel Bedard ----------------------------------------- Michel Bedard Quebec, le 6 fevrier 2000 s/s Christine Bergeron ----------------------------------------- Christine Bergeron Quebec, le 6 fevrier 2000 |
9086-9330 QUEBEC INC.
Par : s/s Claude-Adrien Noel
-----------------------------------------
Claude-Adrien Noel Quebec, le 6 fevrier 2000
Par : s/s Miche Bedard
-----------------------------------------
Michel Bedard Quebec, le 6 fevrier 2000
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SOCIETE EN COMMANDITE CAPIDEM ENR.
/s/ Pierre Tardif -------------------------------- Pierre Tardif, president du Quebec, le 7 fevrier 2000 commandite, Gestion Capidem inc. |
INTERVENTION
Aux presentes intervient la societe, laquelle se declare liee aux dispositions contenues dans la presente offre par l'acceptation de ses actionnaires, lesquels l'ont acceptee le 6e jour de fevrier 2000.
NORTECH FIBRONIC INC
/s/ Claude-Adrien Noel -------------------------------- Claude-Adrien Noel /s/ Michel Bedard -------------------------------- Michel Bedard |
Certificat de cloture
ATTESTE a Quebec, province de Quebec, le 7 fevrier 2000;
A. MONSIEUR CLAUDE-ADRIEN NOEL, homme d'affaires, domicilie au
1119, du Hibou, Stoneham, Quebec, G0A 4P0;
et: 9086-9330 QUEBEC INC., personne morale legalement constituee en
vertu de la Partie 1A de la Loi sur les compagnies, ayant sa
principale place d'affaires au 1119, du Hibou, Stoneham, Quebec
G0A 4P0; agissant aux presentes et representee par son president
Monsieur Claude-Adrien Noel, dument autorise aux fins des
presentes, tel qu'il le declare;
(Ci-apres designes collectivement "Groupe Noel");
et: MONSIEUR MICHEL BEDARD, homme d'affaires domicilie au 3032,
Henri-Bernatchez, Saint-Augustin-de-Desmaures, Quebec, G3A 2Y1;
et: 9086-9314 QUEBEC INC., personne morale legalement constituee en
vertu de la Partie 1A de la Loi sur les compagnies, ayant sa
principale place d'affaires au 3032, Henri-Bernatchez,
Saint-Augustin-de-Desmaures, G3A 2Y1, agissant aux presentes et
representee par son president, Monsieur Michel Bedard, dument
autorise aux fins des presentes, tel qu'il le declare;
(Ci-apres designes collectivement "Groupe Bedard")
et: MADAME CHRISTINE BERGERON, femme d'affaires, domiciliee et
residant au 16, chemin de la Chanterie, Stoneham, Quebec,
G0A 4P0;
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et: SOCIETE EN COMMANDITE CAPIDEM QUEBEC ENR., personne morale
constituee en societe en commandite, ayant sa principale place
d'affaires au 1595, Boul. Hamel Ouest, Quebec, Quebec, G1N 3Y7,
ici agissant et representee par le president de son commandite,
Gestion Capidem inc., Monsieur Pierre Tardif, dument autorise a
agir aux presentes, tel qu'il le declare;
(ci-apres collectivement designes le "VENDEUR")
De: EXFO INGENIERIE ELECTRO-OPTIQUE INC. une societe legalement
constituee en vertu de la Loi canadienne sur les societes par
actions (Canada), ayant sa principale place d'affaires au 465,
avenue Godin, Vanier (Quebec) G1M 3G7, ici agissant et
representee par M. Germain Lamonde, son president, et M. Pierre
Plamondon, son vice-president Finances, dument autorises a agir
aux presentes, tel qu'ils le declarent;
(ci-apres designee l'"ACQUEREUR")
(ci-apres collectivement les "Parties")
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LESQUELLES DECLARENT CE QUI SUIT:
ATTENDU que le Vendeur detient la totalite des actions de Nortech Fibronic inc., personne morale constituee en vertu de la Loi sur les societes par actions, sise, au 500, rue St-Jean Baptiste, Quebec, G2E 5R9 (la "Societe");
ATTENDU que l'Acquereur a presente au Vendeur une offre d'achat portant sur la totalite des actions de la Societe, offre qui fut acceptee par le Vendeur les 6 et 7 fevrier 2000, dont copie est jointe aux presentes a titre d'Annexe 1 (ci-apres l'"Offre");
ATTENDU que l'Offre etait conditionnelle au respect de certains engagements et obligations et a l'accomplissement, avant ou lors de la Date de cloture, de certaines conditions prealables ou suspensives;
ATTENDU que le Vendeur et l'Acquereur entendent, au moyen des presentes, confirmer et concretiser la transaction intervenue entre eux, pour que celle-ci prenne effet comme en date du 4 fevrier 2000;
EN CONSEQUENCE, LES PARTIES CONVIENNENT DE CE QUI SUIT:
ARTICLE 1
OBJET
1.1 OBJET - Le present certificat de cloture confirme et certifie que l'entente intervenue entre les Parties quant a l'acquisition par l'Acquereur de la totalite des actions de la Societe, detenues par le Vendeur est consignee a l'Offre et ses annexes et reference est ici faite a l'Offre pour valoir comme si ici au long recitee.
ARTICLE 2
DEFINITIONS ET INTERPRETATION
2.1 DEFINITIONS - Les mots et expressions utilises a ce certificat de cloture ont les memes sens et significations que ceux prevus a l'Offre.
2.2 INTERPRETATION - Les parties reconnaissent que les presentes constituent une reproduction complete, fidele et entiere de l'entente intervenue entre elles relativement a la vente de la totalite des actions de la Societe. Elles renoncent formellement a se prevaloir de toutes les discussions et negociations qui en ont precede la signature et annulent toute entente anterieure au meme effet; toutefois, ce certificat de cloture n'a pas pour effet d'abroger ou de remplacer l'engagement de confidentialite souscrit par le Vendeur et l'Acquereur, signe le 17 janvier 2000, et les dispositions de celle-ci sont incorporees a ce certificat de cloture pour en faire partie integrante, comme si ici au long recitees; toutefois, en cas d'incompatibilite ou de contradiction entre les termes de ce certificat de cloture et ceux de l'Offre, les dispositions de l'Offre auront preseance sauf quant aux paragraphes 6.1 et 7.1 du present certificat.
ARTICLE 3
ACHAT ET VENTE DE LA TOTALITE DES ACTIONS DE LA SOCIETE
3.1 ACHAT ET VENTE DE LA TOTALITE DES ACTIONS DE LA SOCIETE - Par les presentes, le Vendeur vend, cede et transporte a l'Acquereur, qui accepte, avec effet au moment indique a l'article 12 ci-apres, pour le prix et aux conditions arretes aux presentes, la totalite des actions de la Societe ainsi que tous ses droits, titres et interets dans celles-ci.
ARTICLE 4
PRIX DE VENTE ET MODALITES DE PAIEMENT
4.1 PRIX DE VENTE - La presente vente est faite pour un prix de trois millions neuf cent cinquante-six mille dollars (3 956 000,00 $) payable de la facon indiquee a l'article 3 de l'Offre et telle que ventilee a l'Annexe 3.1 in fine de l'Offre.
ARTICLE 5
AUTRES CONDITIONS
5.1 AUTRES CONDITIONS - La vente est egalement faite en consideration de l'octroi de contrats d'emploi a MM. Noel et Bedard, selon les termes et conditions stipules a l'article 4 de l'Offre.
ARTICLE 6
AJUSTEMENT DE PRIX
6.1 AJUSTEMENT DE PRIX - La vente de la totalite des actions est sujette a un ajustement de prix selon les termes et conditions stipules a l'article 5 de l'Offre. Il est cependant convenu qu'aucune provision raisonnable qui serait incluse dans les Etats financiers 2000 concernant les licences de logiciels utilisees par la Societe ni aux garanties relatives aux produits de la Societe ne devra avoir pour effet de reajuster le prix de vente des actions. De plus, tout ajustement n'est imputable qu'au prix de vente des actions du Groupe Noel et du Groupe Bedard, a l'exclusion du prix de vente des actions de Christine Bergeron et de Societe en Commandite Capidem Quebec enr.
ARTICLE 7
DECLARATIONS ET GARANTIES DU VENDEUR
7.1 DECLARATIONS ET GARANTIES DE CERTAINS VENDEURS - Par les presentes, chacun du Groupe Noel et du Groupe Bedard, a l'exclusion de Christine Bergeron et de Societe en commandite Capidem Quebec enr. declarent, certifient et confirment a l'Acquereur que toutes et chacune de ses declarations et garanties contenues a l'article 6 de l'Offre etaient vraies et exactes aux dates respectives de presentation et d'acceptation de l'Offre, ont continue d'etre vraies et le sont toujours a la date des presentes.
ARTICLE 8
DECLARATIONS ET GARANTIES DE L'ACQUEREUR
8.1 DECLARATIONS ET GARANTIES DE L'ACQUEREUR - L'Acquereur declare, certifie et confirme, par les presentes, au Vendeur que toutes et chacune de ses declarations et garanties contenues a l'article 7 de l'Offre etaient vraies et exactes aux dates respectives de presentation et d'acceptation de l'Offre, ont continue d'etre vraies et le sont toujours a la date des presentes.
ARTICLE 9
CONDITIONS GENERALES PREALABLES ET
OBTENTION DES CONSENTEMENTS REQUIS A LA TRANSACTION
9.1 CONDITIONS GENERALES PREALABLES - Le Vendeur certifie et confirme, par les presentes, que tous les engagements auxquels il a souscrit lors de l'acceptation de l'Offre ont ete dument remplis jusqu'a ce jour; tous les actes poses et les autorisations ou consentements obtenus dans l'accomplissement de ses engagements sont integralement en vigueur en date des presentes sous reserve des delais prevus dans l'offre et du consentement requis du bailleur relativement au bail de la Societe.
ARTICLE 10
CONDITIONS DE CLOTURE
10.1 CONDITIONS AU BENEFICE DE L'ACQUEREUR - L'Acquereur declare, par les
presentes, etre satisfait des conditions prealables a la cloture
indiquees a l'article 8 de l'Offre.
10.2 CONDITIONS AU BENEFICE DU VENDEUR - Le Vendeur declare, par les
presentes, etre satisfait des conditions de cloture.
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ARTICLE 11
NON-CONCURRENCE ET NON-SOLLICITATION
11.1 NON-CONCURRENCE ET NON-SOLLICITATION - Groupe Noel et Groupe Bedard
conviennent et s'engagent, par les presentes, a respecter
integralement l'engagement de non-concurrence et de non-sollicitation
indique au paragraphe 8.1.7 de l'Offre comme si ici au long recite.
11.2 CLAUSE RAISONNABLE - Groupe Noel et Groupe Bedard reconnaissent que
cet engagement est raisonnable quant a sa duree, son objet et le
territoire qu'il vise, compte tenu de la contrepartie prevue aux
presentes et compte tenu des activites de la Societe.
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ARTICLE 12
CLOTURE DE LA TRANSACTION
12.1 CLOTURE DE LA TRANSACTION - Les parties declarent que la cloture de
cette transaction a lieu ce jour, aux bureaux de Lavery, de Billy,
925, chemin St-Louis, Quebec, province de Quebec, a 16 h 00. Elles
procedent, lors de cette cloture, a la signature et a la production
des documents enumeres a l'ordre du jour de la seance de cloture.
12.2 PRISE DE POSSESSION ET TRANSFERT DU DROIT DE PROPRIETE - L'Acquereur
prend possession utile de la totalite des actions de la Societe et en
obtient egalement le droit de propriete a l'expiration de la seance de
cloture indiquee au paragraphe 12.1 comme en date du 4 fevrier 2000.
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ARTICLE 13
AJUSTEMENTS ET COLLABORATION
13.1 AJUSTEMENTS - Groupe Noel, Groupe Bedard et l'Acquereur s'engagent
reciproquement a effectuer entre eux, a la date des presentes, ou
aussitot que possible, les ajustements d'usage qui pourront etre
requis aux fins de donner suite a l'Offre.
13.2 COLLABORATION - Chacun du Groupe Noel et du Groupe Bedard s'engagent
de plus a collaborer etroitement avec l'Acquereur et ses
representants designes afin d'assurer, dans les semaines qui
viennent, une transition harmonieuse des activites de la Societe.
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ARTICLE 14
DISPOSITIONS FINALES
14.1 EXECUTION ADDITIONNELLE - Les parties conviennent de faire, signer et
executer et de voir a ce que soient faits, signes et executes, de
temps a autre et aussi souvent que necessaire, tous autres ecrits,
actes ou documents (notaries, sous seing prive ou autrement), et de
realiser toutes demarches et formalites que l'une ou l'autre des
parties pourrait raisonnablement demander pour les fins de donner
effet aux dispositions de ce certificat de cloture.
14.2 BENEFICE - Ce certificat de cloture lie les parties aux presentes
ainsi que leurs heritiers, mandataires, representants legaux,
successeurs et ayants droit.
14.3 AVIS - Tout avis en vertu des presentes doit etre transmis
conformement a l'article 14 de l'Offre.
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EN FOI DE QUOI, les parties ont signe ce certificat de cloture a l'endroit et a la date officielle en premier lieu mentionnes.
EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Par: /s/ Germain Lamonde
________________________________
Germain Lamonde, president
Par: /s/ Pierre Plamondon
_________________________________________
Pierre Plamondon, vice-president Finance
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/s/ Claude-Adrien Noel ---------------------------------------- Claude-Adrien Noel /s/ Michel Bedard ---------------------------------------- Michel Bedard /s/ Christine Bergeron ---------------------------------------- Christine Bergeron |
9086-9330 QUEBEC INC.
Par: /s/ Claude-Adrien Noel ---------------------------------------- Claude-Adrien Noel |
9086-9314 QUEBEC INC.
Par: /s/ Michel Bedard ---------------------------------------- Michel Bedard |
SOCIETE EN COMMANDITE CAPIDEM QUEBEC ENR.
Par: /s/ Pierre Tardif ---------------------------------------- Pierre Tardif, president du commandite, Gestion Capidem inc. |
INTERVENTION
Aux presentes intervient la Societe, laquelle se declare liee aux dispositions contenues dans le present certificat de cloture par l'acceptation de ses actionnaires, lesquels l'ont acceptee le 7e jour de fevrier 2000.
NORTECH FIBRONIC INC.
Par: /s/ Claude-Adrien Noel ---------------------------------------- Claude-Adrien Noel Par: /s/ Michel Bedard ---------------------------------------- Michel Bedard |
EXHIBIT 10.3
SUMMARY IN ENGLISH
Offer to acquire a building, dated February 23, 2000, between EXFO Electro-Optical Engineering Inc. ("EXFO") and Groupe Mirabau inc. ("Mirabau"), as accepted by Mirabau on February 24,2000.
BUYER: EXFO
SELLER: Mirabau
IMMOVABLE: Immovable property known as the lot 5,727 of the
cadastre for the parish of St-Sauveur and the
lot 5,728 of the cadastre of the parish of
St-Sauveur, registration division of Quebec,
including the land and building, situated at 400,
Godin Avenue, Vanier, district of Quebec, province
of Quebec, Canada, G1M 2K2.
PRICE: C$ 4,900,000
ADJUSTMENTS: EXFO and Mirabau shall proceed with all
adjustments regarding the taxes and other costs
before the closing.
TITLE TO IMMOVABLE: Mirabau is the sole, beneficial and absolute owner
of the immovable, free and clear of any
undertaking, right or any mortgage, pledge,
hypothec, privilege and any other security.
INSURANCES: The immovable is insured for its total value
insurable and Mirabau shall maintain a
C$5,000,000 general public responsibility
insurance and such policy insurance shall stay in
force until the closing.
ASSIGNMENT: EXFO may assign all of its rights in the offer in
favour of one of its affiliates, in such case EXFO
shall stay solidarily responsible with the
assignee.
CLOSING: No further than May 31, 2000.
ACCEPTANCE: Offer accepted by Mirabau on February 24, 2000.
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OFFRE D'ACHAT D'IMMEUBLE soumise le 23 fevrier 2000 a Quebec, district judiciaire de Quebec.
DE: EXFO INGENIERIE ELECTRO-OPTIQUE INC., personne
morale legalement constituee sous l'autorite de la
Loi canadienne sur les societes par actions, ayant
son siege au 465, avenue Godin, Vanier, district
et province de Quebec, G1M 3G7, ici representee
par monsieur Germain Lamonde, son president,
dument autorise aux fins des presentes, tel qu'il
le declare ;
CI-APRES DENOMMEE "EXFO";
A: GROUPE MIRABAU INC., personne morale legalement
constituee sous l'autorite de la Partie 1A de la
Loi sur les compagnies (Quebec), ayant son siege
au 400, avenue Godin, Vanier, district et province
de Quebec, G1M 2K2, ici representee par monsieur
Michel Bouchard, son president, dument autorise
aux fins des presentes tel qu'il le declare ;
CI-APRES DENOMEE "MIRABAU";
PREAMBULE
EXFO DECLARE CE QUI SUIT :
MIRABAU est proprietaire d'un immeuble connu et
designe comme etant forme des lots CINQ MILLE SEPT
CENT VINGT-SEPT (5727) du cadastre de la paroisse
de Saint-Sauveur et CINQ MILLE SEPT CENT
VINGT-HUIT (5728) du cadastre de la paroisse de
Saint-Sauveur, circonscription fonciere de Quebec
avec batisse dessus construite, situe au 400,
avenue Godin, a Vanier, district et province de
Quebec, G1M 2K2
EXFO est interessee a faire l'acquisition de
l'immeuble mentionne ci-devant, dans l'etat ou il
se trouve et se declare satisfait pour l'avoir
visite a plusieures reprises;
EXFO desire stipuler par ecrit les diverses
modalites d'une offre d'achat qu'elle desire
faire sur l'immeuble vise par les presentes;
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1. INTERPRETATION
1.1 TERMINOLOGIE
Les mots et expressions qui suivent, lorsqu'ils apparaissent dans la
presente offre ou dans toute documentation subordonnee a celle-ci,
s'interpretent, a moins d'une derogation implicite ou explicite dans
le texte, en fonction des definitions qui leur sont attribuees
ci-apres :
1.1.1 CHARGE
designe une cause legitime de preference, un demembrement du droit de
propriete, une modalite de la propriete, une restriction a l'exercice
du droit de disposer et une surete conventionnelle.
1.1.2 IMMEUBLE
designe l'edifice ainsi que tous les immeubles qui servent a
l'exploitation de l'edifice.
1.1.3 OFFRE
designe la presente offre, incluant les preambules et ses annexes,
toute documentation subordonnee a celle-ci, ainsi que toutes les
modifications qui peuvent lui etre apportees a l'occasion par les
parties; les expressions "des presentes", "aux presentes", "en vertu
des presentes" et "par les presentes" et toute autre expression
semblable, lorsqu'elles sont utilisees dans l'offre, font
generalement reference a l'ensemble de l'offre plutot qu'a une partie
de celle-ci a moins d'indication contraire dans le texte.
1.1.4 REPRESENTANTS LEGAUX
Designe, pour chaque partie a l'offre, eu egard a son etat et a son
organisation, les liquidateurs de sa succession, ses heritiers ou
legataires, ses mandataires ou preposes.
1.1.5 SEANCE DE CLOTURE
Designe, pour les fins de la presente offre, la plus rapprochee des
dates suivantes: la date a laquelle toutes les parties impliquees
dans la presente offre ont adhere a la documentation finale
constatant l'execution complete de celle-ci et au plus tard le 31 mai
2000.
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1.2 PRESEANCE
Le Contrat constitue la totalite et l'integralite de l'entente
intervenue entre les parties a l'exclusion de tout autre document,
contrat ou promesse verbale anterieur ou concomitant qui peut etre
intervenu, dans le cadre des negociations qui ont precede l'execution
complete du Contrat, que les parties declarent inadmissible en tant
qu'element de preuve susceptible de modifier ou d'affecter de quelque
facon que ce soit l'une ou l'autre des dispositions du Contrat.
1.3 JURIDICTION
1.3.1 ASSUJETTISSEMENT
Ce Contrat, son interpretation, son execution, son application, sa
validite et ses effets sont assujettis aux lois applicables qui sont
en vigueur dans la province de Quebec et au Canada, qui regissent en
partie ou en totalite l'ensemble des dispositions qu'il contient.
1.3.2 PRESOMPTION
Toute disposition de ce Contrat, non conforme aux lois applicables,
est presumee sans effet dans la mesure ou elle est prohibee par l'une
desdites lois. Il en va de meme pour toutes les clauses subordonnees
ou liees a une telle disposition dans la mesure ou leur applicabilite
depend de ladite disposition.
1.3.3 ADAPTATION
Si une disposition contrevient a une loi applicable, elle doit
s'interpreter, le cas echeant, de facon a la rendre conforme a la loi
applicable ou, a defaut, de la facon la plus susceptible de respecter
l'intention des parties sans deroger aux prescriptions des lois
applicables auxquelles les parties ne desirent pas contrevenir.
1.3.4 CONTINUATION OU ANNULATION
Lorsque le Contrat contient une disposition prohibee, toutes les
autres dispositions du Contrat demeurent en vigueur et continuent de
lier les parties a moins que la disposition qui deroge aux lois
applicables ne soit essentielle au bon fonctionnement du Contrat ou a
l'equilibre des prestations respectives des parties et qu'une
interpretation compatible avec les lois applicables ne puisse corriger
cette deficience, auquel cas le Contrat doit etre declare nul ab
initio et les parties remises en etat dans la mesure ou il est
possible de le faire et en
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tenant compte de l'evolution de leur situation depuis l'entree en
vigueur du Contrat pour en arriver a une equivalence de remise en
etat, le cas echeant.
1.4 GENERALITES
1.4.1 DELAIS
Tous les delais indiques dans le Contrat sont de rigueur a moins
d'indication contraire dans le texte.
1.4.2 CUMUL
Tous les droits mentionnes dans le Contrat sont cumulatifs et non
alternatifs. La renonciation a l'exercice d'un droit consenti par
l'une des parties en faveur de l'autre partie au Contrat ne doit
jamais s'interpreter comme une renonciation a l'exercice de tout autre
droit, ici consenti, a moins que le texte d'une disposition du Contrat
n'indique exceptionnellement la necessite d'un tel choix.
1.4.3 DEVISES CANADIENNES
Toutes les sommes d'argent prevues dans le Contrat concernent des
devises canadiennes.
1.4.4 GENRE ET NOMBRE
Dans la mesure ou la comprehension du texte le requiert, un mot
exprime avec le genre masculin comprend le feminin et vice versa; il
en va de meme pour un mot exprimant un nombre en ce qui le singulier
comprend le pluriel et vice versa. Toute phrase contenant des mots
polyvalents de cette nature doit se lire, lorsque le sens du texte
l'exige, de facon a accommoder la version appropriee d'un tel mot avec
les changements grammaticaux qui s'imposent pour donner une
signification logique a la phrase concernee.
1.4.5 TITRES
Les titres utilises dans le Contrat n'ont aucune valeur
interpretative; ils servent uniquement comme element de classification
et d'identification des dispositions constitutives de l'entente entre
les parties qui sont consignees dans le Contrat et, en raison de cette
fonction, ils ne peuvent se voir attribuer de signification ni
influencer l'interpretation d'une disposition.
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2. OFFRE D'ACHAT
Sous reserve des termes, conditions et stipulations de l'Offre, EXFO offre par les presentes a MIRABAU d'acquerir de ce dernier l'Immeuble decrit au preambule et dont la designation cadastrale est reproduite a l'annexe "A" des presentes.
3. CONTREPARTIE
3.1 PRIX OFFERT
Le prix offert pour l'Immeuble est de QUATRE MILLIONS NEUF CENT MILLE dollars (4 900 000 $).
3.2 AJUSTEMENTS
Le cas echeant, tous les ajustements relatifs aux diverses taxes et autres frais, seront effectues a la date prevue pour la Seance de cloture.
4. MODALITES DE PAIEMENT
4.1 PAIEMENT
A la date prevue pour la seance de cloture, le prix offert sera versee a MIRABAU par EXFO au moyen d'un cheque vise de QUATRE MILLIONS NEUF CENT MILLE (4 900 000 $).
5. ATTESTATIONS DE MIRABAU
L'Offre n'est valide que si MIRABAU peut declarer, au moment de l'acceptation de l'Offre et lors de la cloture definitive de la vente, les faits enumeres ci-apres, lesquels constituent pour EXFO l'ensemble des attestations sur lesquelles il base son consentement.
5.1 STATUT
MIRABAU est une societe par actions dument constituee et organisee en vertu des lois du Quebec; il est en regle a l'egard des lois du Canada et du Quebec qui le regissent; il est resident canadien au sens de la Loi de l'impot sur le revenu (Canada) et il a les qualites requises pour posseder l'Immeuble et pour accepter l'Offre et en remplir les conditions et obligations.
5.2 DROIT DE PROPRIETE
MIRABAU est le seul et unique proprietaire de l'Immeuble, a l'exclusion de toute autre personne et il n'existe a sa connaissance aucun obstacle ni aucune restriction d'ordre legal ou contractuel a la libre disposition de l'Immeuble par suite de mise sous sequestre, de mise en curatelle ou en tutelle, de faillite, de cession de biens, de reglement judiciaire, de confiscation totale ou partielle de l'Immeuble, ou d'existence d'un droit de preemption ou de toute autre raison.
5.3 QUALITE DES TITRES
Le titre de propriete de MIRABAU est bon, valable et de valeur marchande, libre et quitte de tous privileges, hypotheques, Charges, lignes homologuees, cotisations d'eglise, servitudes (a l'exception de celles consenties aux fins des services publics) et autres Charges, a l'exception des hypotheques et autres Charges decrites a l'annexe "B" des presentes.
5.4 ETATS DE L'IMMEUBLE
Sous reserve du bail presentement en vigueur et de celui a intervenir entre EXFO et MIRABAU, l'immeuble n'est et ne sera pas l'objet d'un droit de location, d'usufruit, d'emphyteose ou de tout autre droit comportant un demembrement du droit de propriete empechant le transfert d'un droit de propriete integral a EXFO.
Il n'y a et il n'y aura lors de la Seance de cloture, aucun avis, directive ou exigence en suspens emanant d'une autorite publique, informant MIRABAU de defauts ou vices a l'egard de la construction ou de l'etat d'entretien de l'immeuble ou l'avisant de l'inobservance de certains reglements relativement a celui-ci.
5.5 ETATS DES PERMIS
Les permis rattaches a l'Immeuble et necessaires a son utilisation sont et seront en vigueur, ne sont ni ne seront entaches de defauts a la date de cloture definitive de la vente, et le maintien de tels permis ne sera pas affecte par la dite vente.
5.6 PROCEDURE JUDICIAIRE
En date des presentes, l'Immeuble n'est l'objet ou n'est implique dans aucune procedure judiciaire. De plus, MIRABAU declare qu'a sa connaissance, il n'existe aucune menace d'une telle procedure, ni aucune situation susceptible d'y donner lieu.
5.7 TAXES DIVERSES
A la date prevue pour la Seance de cloture, une preuve satisfaisante sera fournie a EXFO du paiement de toutes les taxes se rapportant a l'immeuble.
5.8 ASSURANCES
L'Immeuble est assure pour sa pleine valeur assurable et MIRABAU detient actuellement une assurance responsabilite publique generale d'au moins cinq MILLIONS DE dollars (5 000 000 $) par sinistre et cette situation sera inchangee au jour de la Seance de cloture.
5.9 DIVULGATION
MIRABAU n'a pas omis de divulguer a EXFO quelque fait important que ce soit dont la connaissance aurait eu pour effet de desinteresser EXFO ou de diminuer le prix offert s'il en avait eu connaissance.
6. OBLIGATIONS DE MIRABAU
6.1 INFORMATIONS
Suivant l'acceptation de l'Offre, MIRABAU fournira les copies d'actes, de certificats de recherche et de localisation, de documents ou de titres qui sont en sa possession et a jour en vue de faciliter la recherche de titres de EXFO.
6.2 LIVRAISON
A la date prevue pour la Seance de cloture, MIRABAU procedera a tous les actes requis pour effectuer la livraison a EXFO de l'Immeuble franc et quitte de toutes Charges et hypotheques.
6.3 TRANSFERT DES PERMIS
MIRABAU s'engage a assister EXFO aupres des autorites publiques concernees, et de faire toute chose en son pouvoir afin de faciliter le transfert des permis et licences en faveur de EXFO ou de toute personne designee par celui-ci.
6.4 INSPECTION ET VERIFICATION
MIRABAU s'engage a donner a EXFO, ou a ses representants dument autorises, acces aux divers documents afferents a l'immeuble juges pertinents par EXFO et sur lequel il se sera entendu avec MIRABAU afin de proceder aux diverses verifications requises par EXFO.
7. DISPOSITIONS PARTICULIERES
7.1 CONDITION
L'acceptation de la presente offre par MIRABAU est conditionnelle a ce que le bail joint a la presente a l'annexe "C" soit accepte et signe par EXFO et MIRABAU et ce, a l'interieur du delai mentionne a l'article 11 de l'offre.
7.2 EQUIPEMENTS EXCLUS DE LA VENTE
Tous les equipements utilises par MIRABAU pour ses operations
commerciales sont exclus de l'offre d'achat et devront etre retires
aux frais de MIRABAU et l'immeuble devra etre remis en bon etat au
plus tard pour le 31 decembre 2000.
Concernant les biens mentionnes a 7.2.1.a 7.2.9, MIRABAU aura la
faculte d'abandonner l'un ou plusieurs de ses biens a EXFO sans aucune
autre obligation de sa part.
7.2.1 Compacteur;
7.2.2 Compresseur a air;
7.2.4 Boite electrique de 600 V pour les presses;
7.2.5 Ventilation speciale pour les presses;
7.2.6 Systeme: - de ventilation et de deshumidification (section drapeau)
- d'air make up (rue Nolin)
- d'evacuation d'air aux presses
7.2.7 Drapeaux;
7.2.8 Systeme telephonique et appareils;
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7.2.9 Poignees de portes avec le M de Mirabau.
7.3 FRAIS
Tous les frais de preparation de l'Offre, d'acte de vente, de
recherches et examens de titres, d'enregistrement ainsi que les frais
d'avocat et de notaire relatifs a la preparation, a la modification
et a l'approbation de tout autre document echange entre les parties
sont a la charge de EXFO.
7.4 CESSION
EXFO se reserve, par la presente, le droit de ceder tous les droits
issus de l'Offre a une societe affiliee ou associee, constituee ou
non au moment de la soumission de l'Offre, auquel cas EXFO demeure
toutefois solidairement responsable des obligations en vertu des
presentes sans benefice de division ou de discussion.
7.5 RESIDENCE CANADIENNE
EXFO declare qu'il est, et sera a la date de la Seance de cloture, un
resident canadien au sens de la Loi de l'impot sur le revenu (Canada)
et qu'il fournira a ladite date une declaration assermentee dument
signee par l'un de ses representants autorises, confirmant le tout a
MIRABAU.
8. DISPOSITIONS GENERALES
8.1 LOIS APPLICABLES
L'interpretation, l'accomplissement, l'entree en vigueur, la validite
et les effets de l'Offre sont assujettis aux lois en vigueur dans la
province de Quebec.
8.2 ELECTION
Sous reserve de la section 8.4 de l'Offre, les parties aux presentes
conviennent expressement que toute procedure judiciaire ou quasi
judiciaire pouvant etre instituee par l'une d'entre elles en relation
avec l'Offre, doit l'etre devant l'instance ayant competence dans le
district judiciaire de Quebec, province de Quebec.
8.3 AVIS
Exception faite des dispositions ou il est autrement prevu, tout avis
destine a une partie est suffisant s'il est donne par ecrit, dans une
enveloppe scellee, suffisamment affranchie et postee a telle partie a
l'adresse indiquee au debut de
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l'Offre d'achat d'Immeuble ou a toute autre adresse que chaque partie
concernee peut faire connaitre a l'autre partie.
8.4 ARBITRAGE
Toute reclamation issue de l'Offre faisant l'objet d'une contestation,
tout differend concernant l'execution de celle-ci, y compris son
annulation, ainsi que tout litige issu d'un probleme d'interpretation
de l'Offre doit etre soumis a l'arbitrage, et ce, a l'exclusion des
tribunaux de droit commun.
Les parties aux presentes conviennent que les dispositions
actuellement en vigueur des articles 940 et suiv. du Code de procedure
civile du Quebec doivent regir tout arbitrage tenu en vertu de la
presente section.
9. PORTEE DE L'OFFRE
9.1 Si elle est dument approuvee, l'Offre lie et est executoire non
seulement a l'egard des parties contractantes mais aussi a l'egard de
leurs Representants legaux, successeurs et ayants droit et sera a
leur benefice.
9.2 Tous et chacun des items de la presente offre devront etre produits
dans l'acte de vente.
10. SEANCE DE CLOTURE
La cloture de la vente de l'Immeuble, a la suite de l'acceptation de
l'offre aura lieu au plus tard le 31 mai 2000.
11. DATE LIMITE DE L'ACCEPTATION
L'Offre, pour etre valide, doit etre acceptee, de meme que les
annexes en tout temps avant 17 heures le 24 fevrier 2000, par la
signature d'un des deux exemplaires de l'Offre et par leur remise a
EXFO, a l'adresse mentionnee au debut de l'Offre.
Si l'Offre et les annexes ne sont pas ainsi acceptes avant l'heure et
la date susmentionnees, elle devient nulle et sans effet.
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EN FOI DE QUOI, EXFO A SIGNE EN DEUX (2) EXEMPLAIRES A VANIER, CE 23e JOUR DU MOIS DE FEVRIER 2000.
EXFO Ingenierie Electro-Optique Inc.
Par: /s/ Germain Lamonde
____________________________________
Germain Lamonde
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ACCEPTATION
MIRABAU, par l'entremise de son representant soussigne, dument autorise a cette fin ainsi qu'il appert d'une resolution du conseil d'administration de MIRABAU en date du 24 fevrier 2000, accepte l'Offre ce 24e jour du mois de fevrier 2000.
Par: /s/ Michel Bouchard
__________________________________ ________________________________
Temoin Michel Bouchard
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ADDENDUM
A
L'OFFRE D'ACHAT
7.1 Les parties conviennent d'ajouter ce qui suit:
7.1.1 L'offre est faite conditionnellement a ce que EXFO ne divulgue aucun
des termes de la presente et qu'elle fasse le necessaire pour garder
confidentiel la presente offre jusqu'au 20 mars 2000 a 17 heures
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Signe ce 24 fevrier 2000 a Vanier
EXFO Ingenierie Electro-Optique Inc. Groupe Mirabau Inc. /s/ Germain Lamonde /s/ Michel Bouchard ------------------------------------ ----------------------------------- Germain Lamonde Michel Bouchard President President |
Offre d'achat de la batisse de Groupe Mirabau Inc.
Il est convenu entre les parties que le tuyau principal pour l'air restera en place alors que Mirabau pourra enlever les tuyaux secondaires.
EXFO Ingenierie Electro-Optique Inc Groupe Mirabau Inc.
EXHIBIT 10.4
Summary in English
Lease Agreement, dated December 1, 1996, between EXFO Electro-Optical Engineering Inc. and GEXFO Investissements Technologiques inc., as assigned to 9080-9823 Quebec inc. on September 1, 1999
LANDLORD: 9080-9823 Quebec inc. following the Assignment
Agreement dated as of September 1, 1999 and
executed by 9080-9823 Quebec inc., GEXFO
Investissements Technologiques inc. and EXFO
Electro-Optical Engineering Inc.
TENANT: EXFO Electro-Optical Engineering Inc.
PREMISES: 24,000 square feet situated at 465 Godin Avenue,
Vanier, province of Quebec, Canada.
TERM: Five (5) years, commencing on December 1, 1996,
and terminating on November 30, 2001. The landlord
has the option to renew the lease for and
additional term of five (5) years, subject to the
same terms and conditions, to the exception of the
rent that could be adjusted according to the
market at the time of renewal. Pursuant to the
Addendum executed on August 27, 1999, the tenant
has the right to terminate the Lease by giving a
prior written notice of six (6) months if the
tenant decides to move its operations out of its
current locations at 436, Nolin Street in Vanier,
and 465 Godin Avenue in Vanier.
RENT AND OPERATING
EXPENSES: The total minimum rent is of six dollars ($6.00)
per square feet, payable in advance on a first day
of each month by equal and consecutive
installements of $12,000.00. The tenant shall also
pay, when due and during the term of the Lease,
the various taxes, duties, imposition and fees
imposed on the business carried on in the leased
premises or by reason of the use or occupation of
the leased premises.
ASSIGNMENT: The tenant shall not assign or otherwise dispose
of the Lease or sublet the leased premises without
the prior
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written consent of the landlord, which consent
shall not be unreasonably withheld.
COVENANTS OF TENANT: - Pay the rent and the operating expenses
mentioned in section 6 of the Lease
Agreement.
- Pay the taxes and duties.
- Pay the cleaning expenses as well as the
maintenance and repairs of the heating and
air conditioning systems used in the leased
premises.
- Pay the regular maintenance expenses related
to the leased premises, to the exception of
expenses resulting from normal wear and tear
of the leased premises, from a force majeure
or from damages covered by a fire insurance
of the building, in which cases the said
expenses would be to borne by the landlord.
- Maintain the leased premises in a sanitary
condition, free of garbage, snow or ice.
- Make the regular and necessary repairs to
the building and to the land where the
leased premises are situated.
- Maintain and keep in force (i) a liability
insurance covering the activities carried on
from the leased premises or with respect to
the leased premises, (ii) an occupational
and use insurance including coverage for
property damage, injuries and death in the
minimum of 2 million dollars ($ 2,000,000)
per occurrence, and (iii) an all risk and
fire insurance including coverage against
leakage, earthquakes, collapses and floods
covering the movables effects, fixtures and
leasehold improvements located in the leased
premises.
LIMITED LIABILITY AND The tenant shall not hold the landlord liable for
INDEMNIFICATION: any material or bodily damages suffered by
itself, its employees or its mandatories and
which occurred in the leased premises or
elsewhere in the building, except when such
damages result from the fault of the landlord or
of any person over whom the landlord has control.
In addition, the tenant undertakes to hold the
landlord harmless against claims resulting from
a fault of the tenant or from any person over
whom the tenant has control or following any
failure to perform any obligations stipulated in
the Lease Agreement.
DEFAULT: The tenant shall be in default if he fails to
perform any obligation stipulated in the Lease
Agreement. In the event of such failure, the
tenant shall be entitled to a written notice
giving him a period of time to remedy any default,
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which period of time shall be of 10 days in the case of non payment of the rent, and 30 days in the other cases.
GOVERNING LAW: Laws of Province of Quebec, Canada.
BAIL
ENTRE
GEXFO INVESTISSEMENTS TECHNOLOGIES INC.
ET
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
BAIL
ENTRE:
GEXFO INVESTISSEMENTS TECHNOLOGIQUES, INC. societe legalement constituee ayant son siege social au 465 GODIN VANIER (QUEBEC) G1M 3G7 ici representee par GERMAIN LAMONDE et ROBERT TREMBLAY, ses mandataires, dument autorises pour agir aux fins des presentes ainsi qu'ils le declarent.
Ci-apres nommee LE LOCATEUR
ET:
INGENIERIE ELECTRO-OPTIQUE EXFO INC., corporation legalement constituee, ayant son siege social au 465, GODIN VANIER (QUEBEC) ici representee par Messieurs GERMAIN LAMONDE et ROBERT TREMBLAY, ses mandataires, dument autorises pour agir aux fins des presentes ainsi qu'ils le declarent.
Ci-apres nommee LE LOCATAIRE
LES PARTIES ONT CONVENU DE CE QUI SUIT:
1. LIEUX LOUES
Le locateur loue au locataire des locaux ayant une superficie approximative de 24,000 pieds carres (les "Lieux loues") dans un edifice situe au 465, RUE GODIN, VANIER (QUEBEC) (l'"Edifice").
2. TERME
Ce bail est consenti pour un terme de cinq (5) ans commencant le 1er decembre 1996 et se terminant le 30 novembre 2001 (le "Terme").
Le locateur beneficie d'un droit de renouveler le bail a son expiration, pour un terme additionel de 5 ans, aux memes terme et conditions, a l'exception du loyer qui sera ajuste en fonction du marche a la date de renouvellement.
3. LOYER ANNUEL
Durant le Terme, le Locataire paiera au Locateur un loyer de 720,000 $, soit 6,00 $ le pied carre par annee, payable d'avance le premier jour de chaque mois en versements egaux et consecutifs de 12,000 $ chacun, a la place d'affaires du Locateur ou a tout autre endroit que le Locateur pourra indiquer par ecrit au Locataire.
4. TAXES PERSONNELLES
Le "Locataire" consent et s'engage a payer au fur et a mesure de leur echeance, les taxes d'eau, d'affaires et autres taxes, charges, contributions, droits et cotisations similaires imposes relativement a l'occupation des Lieux loues par le Locataire ou a tout commerce ou activite pratiques par le Locataire dans les Lieux loues.
5. TAXES FONCIERES
Aux fins du present article, l'expression "taxes foncieres" signifie toutes les taxes, impositions et cotisations generales et speciales, percues ou imposees a l'egard de l'Edifice et du Terrain, y compris, le cas echeant, toutes les taxes, cotisations et impositions generales et speciales percues pour les ecoles, les biens publics et les ameliorations generales et locales.
Le Locataire consent et s'engage a payer au fur et a mesure de leur echeance tous les comptes relatifs aux taxes foncieres de l'Edifice et du Terrain.
Le Locataire aura le droit de contester toute evaluation, imposition, taux ou montant de taxes foncieres.
6. FRAIS D'EXPLOITATION
Aux fins du present article, on entend par l'expression "frais d'exploitation" le total de toutes les depenses encourues par le Locateur et mentionnees ci-apres en (a), (b), (c) et (d):
(a) le cout des primes d'assurance-incendie, d'assurance-loyer, d'assurance-bouilloire et de responsabilite civile;
(b) le cout de l'eclairage et/ou de l'entretien de l'Edifice, des enseignes publicitaires, des systemes d'alarme, des extincteurs automatiques et autres appareils inherents a la securite de l'Edifice;
(c) les depenses encourues pour les frais de chauffage et de climatisation des Lieux loues, ainsi que pour l'entretien et la reparation des systemes de chauffage et de climatisation desservant le Lieux loues, le tout tel que prevu au parargraphe intitule "Services" des presentes;
(d) les depenses relatives au deneigement du terrain de stationnement;
Nonobstant ce qui precede, les frais d'exploitation ne comprennent pas:
(1) le remplacement et les reparations a la structure, aux fondations, au revetement exterieur et au toit de l'Edifice rendus necessaires par defaut d'entretien, par vetuste ou suite a des lacunes de conception;
(2) les reparations ou remplacement necessites par des causes contre lesquelles sont normalement assures les edifices semblables;
(3) les reparations ou remplacement de l'Edifice et de ses accessoires dus a des vices de construction;
(4) les couts d'emprunt et de remboursement de capital, principal et interets, a moins de dispositions explicites au contraire de ce bail;
(5) les impots sur le revenu et la taxe sur le capital verse du Locateur, l'amortissement du cout de construction de l'Edifice et autres types d'amortissement, sauf ce qui a ete mentionne plus haut;
(6) d'une maniere generale, les depenses qui, en termes comptables, selon les criteres etablies par le Ministere du Revenu (Quebec), sont condiderees comme des depense de capital, a moins de dispositions explicites ou contraire dans le bail.
L'annee d'exploitation est la periode de douze (12) mois allant du 1er decembre au 30 novembre suivant, etant entendu que le Locateur peut, a son gre, changer ces dates pourvu qu'il ne cause pas ainsi au Locataire un prejudice indu.
Au plus tard au debut de chaque annee d'exploitation, le Locateur estimera le montant payable par le Locataire quant aux frais d'exploitation et pourra facturer le Locataire a l'avance a cet egard en mensualites egales que le Locataire convient de payer le premier jour de chaque mois civil de l'annee d'exploitation.
A la fin de chaque annee d'exploitation en cours de ce bail, le Locateur fournira au Locataire un etat du montant des frais d'exploitation de l'annee d'exploitation ecoulee comprenant des renseignements detailles sur le mode de calcul et de determination de ce montant. Si ce montant differe du total verse par accomptes par le Locataire en application du present article, les regularisations appropriees seront faites dans les trente (30) jours suivant la remise dudit etat.
L'obligation pour les parties de proceder a cette regularisation conformement au present article survivra a l'expiration du Terme.
Le Locataire aura le droit d'examiner les registres et les factures du Locateur et d'obtenir de ce dernier toutes les informations necessaires afin de lui permettre de s'assurer que les frais d'exploitation ne comprennent que les sommes mentionnees ci-dessus et de les contester le cas echeant.
Nonobstant ce qui est prevu precedemment, le Locateur pourra transmettre les factures concernees directement au Locataire pour paiement par ce dernier.
7. SERVICES
(a) Le nettoyage des Lieux loues sera a la charge du Locataire;
(b) le Locataire sera responsable de l'entretien et de la reparation des systemes de chauffage et de climatisation qui deservent les Lieux loues.
8. USAGE DES LIEUX LOUES
Le Locataire utilisera les Lieux loues comme bureaux, laboratoires, ateliers de production, entrepots, salle a diner, ateliers et de facon generale aux operations normales et courantes du locataire sous reserve de son droit de sous-louer, qui peut etre pour d'autres fins.
9. JOUISSANCE PAISIBLE
Le Locataire, en payant son loyer, doit pouvoir jouir paisiblement des Lieux loues pendant le Terme, sans etre derange ni interrompu par le Locateur ou toute autre personne pouvant legalement se reclamer de lui, directement ou indirectement.
Le Locateur atteste qu'il a pleinement droit de souscrire ce bail et que la nature de sa possession de l'Edifice et du Terrain l'autorise a louer les lieux loues aux conditions de ce bail.
10. CESSION, SOUS-LOCATION
Le Locataire ne peut ceder le present bail ni sous-louer les Lieux loues, sauf a une compagnie liee, sans le consentement prealable ecrit du Locateur. Ledit consentement ne devra pas etre indument differe ou retenu.
11. ENSEIGNES
Le Locataire aura le droit de poser, de fixer et d'entretenir a ses frais, a l'interieur comme a l'exterieur des Lieux loues et de l'entablement de facade, des enseignes de toutes sortes en saillie ou en projection, y compris (mais non limitativement) des enseignes lumineuses au neon ou autres. Il est entendu que le logo, le style, les couleurs, la forme (lettres individuelles ou boite) des enseignes seront a la discretion du locataire selon sa politique.
Toute enseigne devra etre conforme aux reglements municipaux en vigueur dans la municipalite ou est situe l'Edifice, et les dimensions de telle enseigne devront etre proportionnelle aux dimensions de l'Edifice. La dimension des enseignes du locataire telle qu'autorisee par lesdits reglements municipaux ne pourra etre limitee ou diminuee par le Locateur.
Nonobstant ce qui precede, le Locataire s'engage a soumettre au Locateur, pour approbation par celui-ci, les plans de toute enseigne qu'il entend poser a l'interieur ou a l'exterieur des Lieux loues, telle approbation ne devant etre refusee ou retenue sans motifs valables.
12. STATIONNEMENT
Le Locataire prendra, a ses frais, toutes les dispositions necessaires pour assurer constamment et aussi souvent qu'il sera necessaire au Locataire, a ses clients, mandataires et invites, le libre usage du terrain de stationnement dans les limites indiquees.
13. REPARATIONS, AMELIORATIONS ET ENLEVEMENT D'OBJETS FIXES AUX LIEUX LOUES
Le Locataire assumera toutes les reparations locatives normales dans les Lieux loues sauf si elles resultent du vieillissement normal des Lieux loues, d'un cas fortuit ou d'une force majeure, des dommages devant etre couverts par l'assurance incendie de l'Edifice, auxquels cas elles seront a la charge du Locateur. Dans le cas de vitres brisees dans les portes, les murs ou les vitrines exterieures des Lieux loues (sauf si ces bris sont imputables au Locataire, a ses employes, agents ou clients), le Locateur devra les remplacer immediatement, a ses frais.
Le Locataire aura le droit, n'importe quand et de temps a autre durant le terme, et sans devoir payer un supplement de loyer, pourvu que la superficie des Lieux loues n'en soit pas augmentee, d'effectuer toutes reparations, modifications ou annexes aux Lieux loues qu'il jugera necessaire a la poursuite de ses activites. Cependant, le locataire s'engage a:
(a) ne rien entreprendre qui puisse affaiblir l'Edifice.
(b) reparer les dommages causes aux Lieux loues par ces travaux.
(c) montrer au prealable au Locateur les plans relatifs aux modifications de la charpente de l'Edifice requises par lesdits travaux.
Le Locataire ne sera pas tenu de remettre ou replacer les Lieux loues dans leur etat primitif et, sous reserve des dispositions qui suivent, le Locateur devra les reprendre tels qu'ainsi transformes par le Locataire.
De plus, a n'importe quel moment avant l'expiration du Terme, ou dans les dix (10) jours suivants, le Locataire pourra, mais n'y sera pas tenu, enlever et emporter des Lieux loues les objets de toutes sortes apportes, installes et fixes par lui ou a ses frais avant ou apres le debut du terme. De facon generale mais non limitative, ces objets incluent tous les appareils et accessoires d'eclairage, outillage, machines, ustensiles, etageres, comptoirs, cloisons, coffres-forts, equipement de securite et tout objet place ou fixe dans les Lieux loues, ainsi que toute amelioration ou annexe aux Lieux loues, meme si ces objets, ameliorations ou annexes ou une partie d'entre eux ont ete fixes ou incorpores a l'Edifice de quelque facon que ce soit. Le Locataire s'engage cependant a reparer tout dommage qui resulterait de ce qui precede, sauf les dommages resultant d'usure normale, cas fortuits, force majeure et ceux qui auraient du etre couverts par l'assurance du Locateur.
14. REPARATIONS ET TRAVAUX DU LOCATEUR
Sous reserve de l'article intitule "Frais d'exploitation", le locataire devra, en tout temps, prendre soin des lieux loues et les tenir en ordre et en bon etat et libres de dechets, de neige et de glace; il s'occupera du nettoyage desdits endroits chaque fois que cela sera juge raisonnablement necessaire.
Le Locataire effectuera a ses frais toutes les reparations a l'Edifice et a ses composantes, et au Terrain. Il procedera a ces reparations en toute diligence raisonnable et selon les standards d'edifice de premiere classe et, quant aux Lieux loues, en observant constamment toutes les mesures de securite appropriees, compte tenu de ses activites propres.
Le Locataire avisera promptement le Locateur, par ecrit, de tout accident ou defectuosite dont il aurait connaissance, affectant les canalisations d'eau ou de gaz, les circuits et les appareils electriques, la tuyauterie ou les appareils de chauffage ou de climatisation. Le Locateur devra y remedier en toute diligence raisonnable.
Le Locateur, ses representants et ses employes auront le droit de penetrer dans les Lieux loues afin de les inspecter ou d'y faire des reparations urgentes et necessaires, pourvu que ces visites aient lieu a des heures convenables pour le Locataire et que les reparations soient effectuees avec toute la diligence necessaire et en prenant constamment toutes les mesures de securite requises, compte tenu du genre d'activites du Locataire.
15. DESTRUCTION DES LIEUX LOUES
Si, a une epoque quelconque du Terme, les Lieux loues etaient detruits ou endommages, les dispositions ci-apres devront s'appliquer:
(a) si la destruction ou les dommages sont tels que plus de cinquante pour cent (50 %) de la superficie des Lieux loues est inutilisable par le Locataire, ou s'il est impossible, dangereux ou inapproprie d'utiliser ou d'occuper ladite superficie, ou si, dans l'un ou l'autre cas, de l'avis du Locateur, la destruction ou les dommages subis par les Lieux loues sont tels que les reparations necessaires ne puissent etre effectuees en toute
diligence raisonnable dans les quatre-vingt-dix (90) jours du sinistre (avis en ce sens devant etre donne par ecrit au Locataire par le Locateur dans les trente (30 jours du sinistre), dans ces conditions, le Locateur ou le Locataire peut, dans les trente (30) jours suivant l'avis donne par le Locateur de la facon susdite, resilier le present bail en avisant par ecrit l'autre partie de sa decision. Dans ce cas, le bail sera cense prendre fin a compter du jour du sinistre. Le loyer et tous les autres paiements incombant au Locataire en vertu des presentes seront calcules au prorata et verses entierement jusqu'a la date dudit sinistre. Dans le cas ou ni le Locateur ni le Locataire ne mettraient fin au bail, le Locateur devra reparer les Lieux loues en toute diligence raisonnable et le paiement du loyer sera suspendu a compter de la date du sinistre jusqu'a la fin des reparations.
(b) si la destruction ou les dommages sont tels que moins de 50 % de la superficie des Lieux loues est inutilisable, les reparations devraient etre effectues avec diligence raisonnable et le paiement du loyer sera suspendu a compter de la date du sinistre jusqu'a la fin des reparations, dans une proportion equivalante a la partie des Lieux loues jugee inutilisable, comme il est indique plus haut.
16. DESISTEMENT DE PRESOMPTION
Par les presentes, le Locateur renonce a la presomption legale creee en sa faveur par l'article 1621 du Code civil du Bas Canada.
17. ASSURANCES DU LOCATEUR
Le Locateur souscrira et conservera:
(a) pour l'ensemble de son exploitation, une assurance globale de responsabilite generale couvrant entre autres les dommages corporels et materiels ainsi que la responsabilite contractuelle, pour une valeur minimum de DEUX MILLION DE DOLLARS (2 000 000.00 $) par sinistre avec clause de responsabilite reciproque;
(b) une assurance tous risque de dommages materiels directes, notamment attribuables a une inondation ou un tremblement de terre, pour la valeur de remplacement integrale de l'Edifice et de ses ameliorations et installations, a l'exclusion des ameliorations locatives et autres installations fixes du Locataire;
(c) une assurance globale de dommages directs et de pertes d'exploitation par le fait d'une chaudiere ou d'une machine, applicable a toutes les chaudieres, canalisations sous pression, climatisateurs d'air et appareil electriques divers; et
Les polices mentionnees aux paragraphes (a), (b) et (c) ci-dessus devront renfermer une clause de renonciation a tous droit de subrogation contre le Locataire.
A la demande du Locataire, le Locateur devra lui remettre un releve des risques et montants assures a l'egard de L'Edifice et de ses ameliorations et installations, et le Locataire pourra, a intervalles raisonnables et moyennant un preavis raisonnable au Locateur, examiner des copies des parties pertinentes de toutes les polices d'assurance en vigueur et une copie de tous les avis pertinents des conseillers en assurance du Locateur.
18. ASSURANCE DU LOCATAIRE
Le Locataire souscrira et conservera :
(a) pour les activites menees a l'interieur ou a partir des Lieux loues et pour l'utilisation ou occupation des Lieux loues et de toutes autres parties de l'Edifice, une assurance globale de responsabilite generale couvrant entre autres les dommages corporels et materiels ainsi que la responsabilite contractuelle ; une assurance de responsabilite eivile en cas d'incendie ; et une assurance de responsabilite couvrant les automobiles ne lui appartenant pas, pour une valeur minimum de DEUX MILLION DE DOLLARS (2 000 000.00 $) par sinistre, L'assurance devra nommer le Locateur comme assure additionnel et contenir une clause de responsabilite reciproque; et
(b) une assurance tous risques de dommages materiels directs, notamment attribuables a une inondation ou un tremblement de terre, pour la valeur de remplacement integrale de ses ameliorations locatives, installations fixes et contenu de toute nature. Cette assurance devra comporter une clause de renonciation aux droits de subrogation contre le Locateur et stipuler que les sommes versees en cas de sinistre aux ameliorations locatives le seront au Locataire (le Locataire autorisant toutefois l'affectation de ces sommes a la reparation ou au remplacement des biens assures, sauf resiliation de ce bail en vertu d'une autre clause).
Le Locateur convient que le Locataire aura un interet assurable dans les modifications, ameliorations et ajouts effectues par lui ou a ses frais aux lieux loues avant comme apres le Terme et que la Locataire aura le droit d'assurer ces modifications, ameliorations et ajouts a leur pleine valeur, sans egard au fait qu'ils soient fixes ou integres a l'Edifice et que, au cas ou elles seraient totalement ou partiellement detruites, le Locataire ait le droit de percevoir et de conserver les indemnites payable aux termes de ladite assurance, le Locateur assurera le cout integral de tout sinistre en deca des differentes franchises.
A la demande du Locateur, le Locataire lui remettra une attestion des assurances qu'il aura souscrite, annulee ou renouvelee. S'il constate par cette attestation que le Locataire n'a pas assure les Lieux loues conformement a la presente clause, le Locateur peut lui faire part par ecrit de ses divers manquements a cet egard et le mettre en demeure de corriger la situation. Le Locataire dispose alors d'un delai de trente (30) jours pour obtemperer, a defaut de quoi le Locateur peut souscrire toute assurance additionnelle ou suppleante qu'il juge a propos, sous reserve de tous ses autres droits prevus a ce bail ou ailleurs, les primes et autres debourses etant a la charge du Locataire.
Les parties conviennent qu'ils pourront souscrire une police d'assurance conjointe a l'egard des couvertures exigees en vertu des articles 17 et 18 des presentes.
19. RESPONSABILITE LIMITEE ET INDEMNISATIONS
Le Locataire ne tiendra pas le Locateur responsable des dommages corporels (deces compris) ou materiels a lui-meme, a ses employes, a ses mandataires, survenus dans les Lieux loues ou ailleurs dans l'Edifice, sauf dans la mesure ou ses dommanges sont causes par la faute du Locateur ou de toute personne dont il a le controle ou sont causes par les choses qu'il a sous sa garde ou s'ils resultent de la contravention ou de l'inexecution par le Locateur de ses obligations en vertu de ce bail ou de la loi.
Le Locataire tiendra le Locateur a couvert de tous dommages, responsabilites, reclamation, pertes ou depenses resultant de la faute de Locataire ou de toute personne dont il a le controle ou par suite de tout manquement du Locataire a une clause du present bail, sauf dans la mesure ou ses dommages sont
causes par la faute du Locateur ou de toute personne dont il a le controle ou causes par les choses qu'il a sous sa garde ou s'ils resultent de la contravention ou de l'inexecution par le Locateur de ses obligations en vertu de ce bail ou de la loi.
Le Locateur tiendra le Locataire a couvert de tous dommages, responsabilites, reclamations, pertes ou depenses resultant de la faute du Locateur ou de toute personne dont il a le controle ou resultant des choses qu'il a sous sa garde ou par suite de tout manquement du Locateur a ses obligations en vertu de ce bail ou de la loi, sauf dans la mesure ou ils sont causes par la faute du Locataire ou de toute personne dont il a le controle ou s'ils resultent de la contravention ou de l'inexecution par le Locataire de ses obligations en vertu de ce bail.
20. DEFAUT
Dans le cas de contravention par le Locataire de ses obligations le Locataire aura droit a un delai lui permettant de remedier au defaut. Ce delai sera de dix (10) jours dans le cas de non paiement du loyer, et de trente (30) jours dans les autres cas. Lesdits delais courront a compter de la reception d'un avis ecrit du Locateur, precisant la nature du defaut.
Dans le cas de contravention par le Locateur de ses obligations en vertu de ce bail ou de la loi, le Locateur aura droit a un delai lui permettant de remedier au defaut. Ce delai sera de trente (30) jours a compter de la reception d'un avis ecrit du Locataire, precisant la nature du defaut.
21. DESISTEMENT
Au cas ou le Locateur ou le Locataire, selon le cas, aurait omis de respecter rigoureusement l'une ou l'autre clause ou condition du present bail ou d'exercer quelque droit ou option lui revenant aux termes dudit bail, cette omission ne saurait etre interpretee comme un desistement ou un abandon de ces clauses, conditions, droits ou options, tous ceux-ci restant pleinement en vigueur, selon leur teneur.
22. RECOURS
Tous les recours et droits du Locateur et du Locataire sont cumulatifs et non alternatifs.
23. EXPROPRIATION
Dans le cas ou l'Edifice et le Terrain ("l'Immeuble") ou les Lieux loues seraient, en totalite ou en partie, soustraits au Locateur par droit de domaine eminent, expropriation, condamnation ou autre action similaire, ou dans le cas ou le Canada, une de ses provinces ou une municipalite exerceraient un droit quelconque les autorisant a exproprier tout ou partie de l'immeuble ou des Lieux loues, pendant le Terme, le Locateur et le Locataire consentent et s'engagent a ce qui suit:
(a) si la totalite de l'immeuble ou des Lieux loues selon le cas est soustraite et exproprie, le bail sera resilie a la date d'expropriation et le loyer cessera d'etre du a la date de la prise de possession des Lieux loues;
(b) si seulement une partie des Lieux loues est soustraite ou expropriee de la maniere enoncee, le paiement du loyer sera interrompu a la date de la prise de possession, au prorata de la partie des Lieux loues dont le Locataire se verra prive. Cependant, si le reste des Lieux loues etait juge insuffisant par le Locataire pour la pousuite de ses activites, ce dernier aura le privilege de resilier immediatement le present bail, en ce qui concerne la
totalite des Lieux loues, en envoyant un preavis ecrit au Locateur dans les trois (3) mois apres qu'on aura reclame la possession de ladite partie des Lieux loues, et le loyer et tout autre paiement dont le Locataire est tenu responsable en vertu des presentes devra etre calcule au prorata de la periode ecoulee a la date dudit avis et paye integralement;
(c) dans le cas ou plus de quarante pour cent (40 %) de l'Immeuble serait soustrait ou exproprie de la maniere enoncee, meme sans affecter les Lieux loues, le Locateur ou le Locataire aura le privilege de resilier immediatement le present bail en ce qui concerne la totalite des Lieux loues en envoyant a l'autre partie un preavis par ecrit, dans les trois (3) mois apres qu'on aura reclame la possession de ladite partie de l'immeuble; et le loyer et tout paiement dont le Locataire est tenu responsable en vertu des presentes devra etre calcule au prorata de la periode ecoulee a la date dudit avis et paye integralement; et
(d) nonobstant le fait que le present bail peut etre resilie par l'une ou l'autre des parties, tel que prevu aux paragraphes qui precedent, le Locataire aura droit de reclamer de la partie expropriante une indemnite ou des dommages-interets en prouvant qu'en raison de cette expropriation, il a subi une perte de clientele, une depreciation, des frais de demenagement de meubles et accessoires et/ou toute autre perte.
24. AVIS
Tout avis exige ou autorise aux termes du present bail doit etre envoye par Porteur ou par cable ou telegramme, ou par la poste certifiee ou recommandee dument affranchie, a l'autre partie a l'adresse indiquee ci-dessous ou a tout autre adresse que l'une ou l'autre partie pourra indiquer par courrier. Tout avis ainsi envoye sera repute avoir ete donne et recu le jour de la remise s'il est expedie par porteur, ou le jour ouvrable suivant son expedition s'il est transmis par cable ou telegramme, ou le troisieme jour ouvrable suivant la mise a la poste dans le cas d'envoi par la poste recommandee ou certifiee; toutefois, si le service des postes ou du cablogramme ou telegramme est interrompu par une greve, un ralentissement, un cas de force majeure ou toute autre cause, la partie expediant l'avis devra utiliser l'un desdits services qui n'est pas interrompu ou devra livrer l'avis de facon a ce qu'il soit recue le plus tot possible.
Les adresses des parties aux fins d'avis sont les suivantes:
le Locateur: 465 Godin
Ville Vanier (Quebec)
le Locataire: 465 Godin
Ville Vanier (Quebec)
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Si durant le Terme, il y a plus d'un locateur, tout avis sera cense validement donne et recu s'il est transmis a l'endroit prevu pour le paiement du loyer.
25. ENREGISTREMENT
Il sera loisible au Locataire d'enregistrer le present bail, a ses frais, par depot ou par bordereau, et le locateur convient qu'il en sera de meme pour tout document le modifiant ou constatant tout renouvellement.
26. INTEGRALITE DE L'ENTENTE
Le present bail contient integralement l'entente entre les parties a l'egard des conventions prevues aux presentes et ne pourra etre modifie que par une convention ecrite subsequente intervenant entre les parties.
SIGNE le 30e jour de novembre 1996, a Vanier
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
---------------------------- ----------------------------
Germain Lamonde Robert Tremblay
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INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
---------------------------- ----------------------------
Germain Lamonde Robert Tremblay
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ADDENDUM
ENTRE : GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
(le "Locateur");
ET : EXFO INGENIERIE ELECTRO-OPTIQUE INC.
(le "Locataire");
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ATTENDU QUE le Locataire et le Locateur ont conclu un bail en date du 1er decembre 1996 pour des locaux dans un edifice situe au 465, Godin, Vanier (Quebec) (le "Bail");
ATTENDU QUE le Locateur et le Locataire desirent modifier le Bail afin de permettre sa resiliation par le Locataire conformement aux dispositions prevues aux presentes;
LES PARTIES ONT CONVENU DE CE QUI SUIT :
1. Le Bail est modifie en ajoutant le texte suivant en tant que paragraphe 27:
"Le Locataire pourra resilier le Bail unilateralement en donnant un preavis
ecrit de six (6) mois au Locateur advenant sa decision de demenager de
l'Edifice et de l'autre edifice propriete de Locateur situe a 436, avenue
Nolin, Vanier, Quebec et dans laquelle le Locataire loue des locaux."
2. Sauf en ce qui concerne les modifications prevues au present Addendum, le Bail demeure pleinement en vigueur et est, pas les presentes, ratifie et confirme et lie les parties aux presentes.
3. Tous les termes definis dans le Bail auront le meme sens dans le present Addendum a moins d'une disposition explicite a l'effet contraire.
EN FOI DE QUOI les parties ont signe a Vanier, Quebec, comme en date du 27e jour d'aout 1999.
GEXFO INVESTISSEMENTS EXFO INGENIERIE
TECHNOLOGIQUES INC. ELECTRO-OPTIQUE INC.
Par : /s/ Germain Lamonde Par : /s/ Germain Lamonde
------------------------ ------------------------
Germain Lamonde Germain Lamonde
Par : /s/ Robert Tremblay Par : /s/ Robert Tremblay
------------------------ ------------------------
Robert Tremblay Robert Tremblay
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CESSION DE BAIL
Intervenue a Quebec, en date effective du 1er septembre 1999
ENTRE : 9080-9823 QUEBEC INC., personne morale legalement constituee en
vertu de la Loi sur les compagnies (Quebec), ayant son siege
social au 465, rue Godin, Vanier (Quebec), G1M 3G7, agissant et
representee aux presentes par messieurs Germain Lamonde et Robert
Tremblay, dument autorises tel qu'ils le declarent;
(ci-apres designee la "Cessionnaire")
ET : GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., personne morale
legalement constituee en vertu de la Loi sur les compagnies
(Quebec), ayant son siege social au 465, rue Godin, Vanier
(Quebec), G1M 3G7, agissant et representes aux presentes par
messieurs Germain Lamonde et Robert Tremblay, dument autorises
tel qu'ils le declarent;
(ci-apres designee la "Cedante")
ET : EXFO INGENIERIE ELECTRO-OPTIQUE INC., personne morale legalement
constituee en vertu de la Loi canadienne sur les societes par
actions, ayant son siege social au 465, rue Godin, Vanier
(Quebec), G1M 3G7, agissant et representee aux presentes par
messieurs Germain Lamonde et Robert Tremblay, dument autorises
tel qu'ils le declarent;
(ci-apres designee "EXFO")
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ATTENDU qu'un bail est intervenue le 1er decembre 1996 entre la Cedante et EXFO en vertu duquel EXFO loue des locaux ayant une superficie approximative de vingt-quatre mille pieds carres (24 000 pi2) dans un immeuble situe au 465, avenue Godin, Vanier (Quebec) (l'"Immeuble") (le "Bail");
1.
ATTENDU qu'en date du 27 aout 1999, la Cedante et EXFO ont conclu un addendum au Bail afin de modifier les modalites de resiliation du Bail (l'"Addendum");
ATTENDU que le 1er septembre 1999, la Cedante a vendu, cede et transfere a la Cessionnaire, l'Immeuble ci-haut mentionne aux termes d'un contrat de vente intervenu entre elles;
ATTENDU qu'il etait de l'intention des parties qu'une cession du Bail et de l'Addendum intervienne entre la Cedante et la Cessionnaire lors de la cession de l'Immeuble et que la Cessionnaire et EXFO desiraient reconduire le Bail et l'Addendum aux memes termes, modalites et conditions;
EN CONSEQUENCE, LES PARTIES CONVIENNENT DE CE QUI SUIT:
1. La Cedante cede et transfere a la Cessionnaire, qui accepte, le Bail et l'Addendum ainsi que tous les droits, interets, responsabilites et obligations y afferents, incluant notamment le droit de EXFO de mettre fin au Bail sur un preavis ecrit de six (6) mois de la part de EXFO advenant un eventuel demenagement de EXFO hors l'Immeuble tel que stipule a l'Addendum et a l'article 16.1 de la convention du 26 aout 1999 a laquelle sont parties la Cedante et EXFO, et ce, en date effective au 1er septembre 1999, liberant la Cedante de toute obligation et responsabilite decoulant au Bail a compter de cette date.
2. La Cessionnaire et EXFO conviennent et reconnaissent que le Bail et l'Addendum sont reconduit entre elles aux memes prix, termes, conditions et modalites a compter du 1er septembre 1999.
3. La Cedante, la Cessionnaire et EXFO conviennent de faire, signer et executer et voir a ce que soit fait, signe et execute tout autre ecrit, acte ou document et realiser toute autre demarche et formalite que l'une ou l'autre des parties pourrait raisonnablement demander aux fins de donner effet a la presente cession.
EN FOI DE QUOI, LES PARTIES ONT SIGNE LA PRESENTE CESSION.
9080-9823 QUEBEC INC. GEXFO INVESTISSEMENTS
TECHNOLOGIQUES INC.
Par : /s/ Germain Lamonde Par : /s/ Germain Lamonde
------------------- -------------------
Germain Lamonde Germain Lamonde
Par : /s/ Robert Tremblay Par : /s/ Robert Tremblay
------------------- -------------------
Robert Tremblay Robert Tremblay
2
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EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Par : /s/ Germain Lamonde
------------------------------
Germain Lamonde
Par : /s/ Robert Tremblay
------------------------------
Robert Tremblay
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EXHIBIT 10.5
Summary in English
Lease Agreement, dated March 1, 1996, between EXFO Electro-Optical Engineering Inc. and GEXFO Investissements Technologiques inc., as assigned to 9080-9823
Quebec inc. on September 1, 1999
LANDLORD: 9080-9823 Quebec inc. following the Assignment
Agreement executed by 9080-9823 Quebec inc,
GEXFO Investissements Technologiques inc. and
EXFO Electro-Optical Engineering Inc.
TENANT: EXFO Electro-Optical Engineering Inc.
PREMISES: 44,164 square feet situated at 436 Nolin Street,
Vanier, province of Quebec, Canada.
TERM: Five (5) years, commencing on March 1, 1996, and
terminating on February 28, 2001. The landlord has the
option to renew the lease for an additional term of
five (5) years, subject to the same terms and
conditions, to the exception of the rent that could be
adjusted according to the market at the time of
renewal. Pursuant to the Addendum-2 executed on
August 27, 1999, the tenant has the right to terminate
the Lease by giving a prior written notice of six (6)
months if the tenant decides to move its operations out
of its current locations at 436 Nolin Street in Vanier,
and 465 Godin Avenue in Vanier.
RENT AND OPERATING The total minimum rent is of five dollars ($5.00)
EXPENSES: per square feet, payable on advance on the
first day of each month by equal and consecutive
installments of $ 18,401.67. The tenant shall also pay,
when due and during the term of the Lease, the various
taxes, duties, imposition and fees imposed on the
business carried on in the leased premises or by reason
of the use or occupation of the leased premises.
ASSIGNMENT: The tenant shall not assign or otherwise dispose of the
Lease or sublet the leased premises without the prior
written consent of the landlord, which consent shall
not be unreasonably withheld.
COVENANTS OF THE TENANT: - Pay the rent and the operating expenses mentioned
in section 6 of the Lease Agreement.
- Pay the taxes and duties.
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- Pay the cleaning expenses as well as the
maintenance and repair of the heating and air
conditioning systems used in the leased premises.
- Pay the regular maintenance and repair expenses
related to the leased premises, to the exception
of expenses resulting from normal wear and tear of
the leased premises, from a force majeure or from
damages covered by a fire insurance of the
building, in which cases the said expenses would
be borne by the landlord.
- Maintain the leased premises in a sanitary
condition, free of garbage, snow or ice.
- Make the regular and necessary repairs to the
building and to the land where the leased premises
are situated.
- Maintain and keep in force (i) a liability
insurance covering the activities carried on from
the leased premises or with respect to the leased
premises, (ii) an occupational and use insurance
including coverage for property damage, injuries
and death in the minimum of 2 million dollars
($2,000,000) per occurrence, and (iii) an all risk
and fire insurance including coverage against
leakage, earthquakes, collapses and floods
covering the movables effects, fixtures and
leasehold improvements located in the leased
premises.
LIMITED LIABILITY AND The tenant shall not hold the landlord liable for
INDEMNIFICATION: any material or bodily damages suffered by itself, its
employees or its representatives and which occurred in
the leased premises or elsewhere in the building,
except when such damages result from the fault of the
landlord or of any person over whom the landlord has
control. In addition, the tenant undertakes to hold the
landlord harmless against claims resulting from a fault
of the tenant or from any person over whom the tenant
has control or following any failure by the tenant to
perform any obligations stipulated in the Lease
Agreement.
DEFAULT: The tenant shall be in default if he fails to perform
any obligation stipulated in the Lease Agreement. In
the event of such failure, the tenant shall be entitled
to a written notice giving him a period of time to
remedy any default, which period of time shall be of
10 days in the case of non payment of the rent, and
30 days in the other cases.
GOVERNING LAW: Laws of the Province of Quebec, Canada.
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BAIL
ENTRE
GEXFO INVESTISSEMENTS TECHNOLOGIES INC.
ET
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
BAIL
ENTRE:
GEXFO INVESTISSEMENTS TECHNOLOGIQUES, INC. societe legalement constituee ayant son siege social au 465 GODIN VANIER (QUEBEC) G1M 3G7 ici representee par GERMAIN LAMONDE et ROBERT TREMBLAY, ses mandataires, dument autorises pour agir aux fins des presentes ainsi qu'ils le declarent.
Ci-apres nommee LE LOCATEUR
ET:
INGENIERIE ELECTRO-OPTIQUE EXFO INC., corporation legalement constituee, ayant son siege social au 465, GODIN VANIER (QUEBEC) ici representee par Messieurs GERMAIN LAMONDE et ROBERT TREMBLAY, ses mandataires, dument autorises pour agir aux fins des presentes ainsi qu'ils le declarent.
Ci-apres nommee LE LOCATAIRE
LES PARTIES ONT CONVENU DE CE QUI SUIT:
1. LIEUX LOUES
Le locateur loue au locataire des locaux ayant une superficie approximative de 30,500 pieds carres (les "Lieux loues") dans un edifice situe au 436, NOLIN, VANIER (QUEBEC) (l'"Edifice").
2. TERME
Ce bail est consenti pour un terme de cinq (5) ans commencant le 1er mars 1996 et se terminant le 28 fevrier 2001 (le "Terme").
Le locateur beneficie d'un droit de renouveler le bail a son expiration, pour un terme additionel de 5 ans, aux memes terme et conditions, a l'exception du loyer qui sera ajuste en fonction du marche a la date de renouvellement.
3. LOYER ANNUEL
Durant le Terme, le Locataire paiera au Locateur un loyer de 915,000 $, soit 6.00 $ le pied carre par annee, payable d'avance le premier jour de chaque mois en versements egaux et consecutifs de 15,250 $ chacun, a la place d'affaires du Locateur ou a tout autre endroit que le Locateur pourra indiquer par ecrit au Locataire.
4. TAXES PERSONNELLES
Le "Locataire" consent et s'engage a payer au fur et a mesure de leur echeance, les taxes d'eau, d'affaires et autres taxes, charges, contributions, droits et cotisations similaires imposes relativement a l'occupation des Lieux loues par le Locataire ou a tout commerce ou activite pratiques par le Locataire dans les Lieux loues.
5. TAXES FONCIERES
Aux fins du present article, l'expression "taxes foncieres" signifie toutes les taxes, impositions et cotisations generales et speciales, percues ou imposees a l'egard de l'Edifice et du Terrain, y compris, le cas echeant, toutes les taxes, cotisations et impositions generales et speciales percues pour les ecoles, les biens publics et les ameliorations generales et locales.
Le Locataire consent et s'engage a payer au fur et a mesure de leur echeance tous les comptes relatifs aux taxes foncieres de l'Edifice et du Terrain.
Le Locataire aura le droit de contester toute evaluation, imposition, taux ou montant de taxes foncieres.
6. FRAIS D'EXPLOITATION
Aux fins du present article, on entend par l'expression "frais d'exploitation" le total de toutes les depenses encourues par le Locateur et mentionnees ci-apres en (a), (b), (c) et (d);
(a) le cout des primes d'assurance-incendie, d'assurance-loyer, d'assurance-bouilloire et de responsabilite civile;
(b) le cout de l'eclairage et/ou de l'entretien de l'Edifice, des enseignes publicitaires, des systemes d'alarme, des extincteurs automatiques et autres appareils inherents a la securite de l'Edifice;
(c) les depenses encourues pour les frais de chauffage et de climatisation des Lieux loues, ainsi que pour l'entretien et la reparation des systemes de chauffage et de climatisation desservant les Lieux loues, le tout tel que prevu au paragraphe intitule "Services" des presentes;
(d) les depenses relatives au deneigement du terrain de stationnement.
Nonobstant ce qui precede, les frais d'exploitation ne comprennent pas:
(1) le remplacement et les reparations a la structure, aux fondations, au revetement exterieur et au toit de l'Edifice rendus necessaires par defaut d'entretien, par vetuste ou suite a des lacunes de conception;
(2) les reparations ou remplacement necessites par des causes contre lesquelles sont normalement assures les edifices semblables;
(3) les reparations ou remplacement de l'Edifice et de ses accessoires dus a des vices de construction;
(4) les couts d'emprunt et de remboursement de capital, principal et interets, a moins de dispositions explicites au contraire de ce bail;
(5) les impots sur le revenu et la taxe sur le capital verse du Locateur, l'amortissement du cout de construction de l'Edifice et autres types d'amortissement, sauf ce qui a ete mentionne plus haut:
(6) d'une maniere generale, les depenses qui, en termes comptables, selon les criteres etablis par le Ministere du Revenu (Quebec) sont considerees comme des depense de capital, a moins de dispositions explicites au contraire dans le bail.
L'"annee d'exploitation" est la periode de douze (12) mois allant du 1er mars au 28 fevrier suivant, etant entendu que le Locateur peut, a son gre, changer ces dates pourvu qu'il ne cause pas ainsi au Locataire un prejudice indu.
Au plus tard au debut de chaque annee d'exploitation, le Locateur estimera le montant payable par le Locataire quant aux frais d'exploitation et pourra facturer le Locataire a l'avance a cet egard en mensualites egales que le Locataire convient de payer le premier jour de chaque mois civil de l'annee d'exploitation.
A la fin de chaque annee d'exploitation en cours de ce bail, le Locateur fournira au Locataire un etat du montant des frais d'exploitation de l'annee d'exploitation ecoulee comprenant des renseignements detailles sur le mode de calcul et de determination de ce montant. Si ce montant differe du total verse par accomptes par le Locataire en application du present article, les regularisations appropriees seront faites dans les trente (30) jours suivant la remise dudit etat.
L'obligation pour les parties de proceder a cette regularisation conformement au present article survivra a l'expiration du Terme.
Le Locataire aura le droit d'examiner les registres et les factures du Locateur et d'obtenir de ce dernier toutes les informations necessaires afin de lui permettre de s'assurer que les frais d'exploitation ne comprennent que les sommes mentionnees ci-dessus et de les contester le cas echeant.
Nonobstant ce qui est prevu precedemment, le Locateur pourra transmettre les factures concernees directement au Locataire pour paiement par ce demier.
7. Services
(a) le nettoyage des Lieux loues sera a la charge du Locataire:
(b) le Locataire sera responsable de l'entretien et de la reparation des systemes de chauffage et de climitasation qui deservent les Lieux loues.
8. Usage des Lieux loues
Le Locataire utilisera les Lieux loues comme bureaux, laboratoires, ateliers de production, entrepots, salle a diner, ateliers et de facon generale aux operations normales et courantes du locataire sous reserve de son droit de sous-louer, qui peut etre pour d'autres fins.
9. Jouissance paisible
9. Le Locataire, en payant son loyer, doit pouvoir jouir paisiblement des Lieux loues pendant le Terme, sans etre derange ni interrompu par le Locateur ou toute autre personne pouvant legalement se reclamer de lui, directement ou indirectement.
Le Locateur atteste qu'il a pleinement droit de souscrire ce bail et que la nature de sa possession de l'Edifice et du Terrain l'autorise a louer les Lieux loues aux conditions de ce bail.
10. CESSION, SOUS-LOCATION
Le Locataire ne peut ceder le present bail ni sous-louer les Lieux loues, sauf a une compagnie liee, sans le consentement prealable ecrit du Locateur. Ledit consentement ne devra pas etre indument differe ou retenu.
11. ENSEIGNES
Le Locataire aura le droit de poser, de fixer et d'entretenir a ses frais, a l'interieur comme a l'exterieur des Lieux loues et de l'entablement de facade, des enseignes de toutes sortes en saillie ou en projection, y compris (mais non limitativement) des enseignes lumineuses au neon ou autres. Il est entendu que le logo, le style, les couleurs, la forme (lettres individuelles ou boite) des enseignes seront a la discretion du locataire selon sa politique.
Toute enseigne devra etre conforme aux reglements municipaux en vigueur dans la municipalite ou est situe l'Edifice, et les dimensions de telle enseigne devront etre proportionnelle aux dimensions de l'Edifice. La dimension des enseignes du Locataire telle qu'autorisee par lesdits reglements municipaux ne pourra etre limitee ou diminuee par le Locateur.
Nonobstant ce qui precede, le Locataire s'engage a soumettre au Locateur, pour approbation par celui-ci, les plans de toute enseigne qu'il entend poser a l'interieur ou a l'exterieur des Lieux loues, telle approbation ne devant etre refusee ou retenue sans motifs valables.
12. STATIONNEMENT
Le Locataire prendra, a ses frais, toutes les dispositions necessaires pour assurer constamment et aussi souvent qu'il sera necessaire au Locataire, a ses clients, mandataires et invites, le libre usage du terrain de stationnement dans les limites indiquees.
13. REPARATIONS, AMELIORATIONS ET ENLEVEMENT D'OBJETS FIXES AUX LIEUX LOUES
Le Locataire assumera toutes les reparations locatives normales dans les Lieux loues sauf si elles resultent du vieillissement normal des Lieux loues, d'un cas fortuit ou d'une force majeure, des dommages devant etre couverts par l'assurance incendie de l'Edifice, auxquels cas elles seront a la charge du Locateur. Dans le cas de vitres brisees dans les portes, les murs ou les vitrines exterieurs des Lieux loues (sauf si ces bris sont imputables au Locataire, a ses employes, agents ou clients), le Locateur devra les remplacer immediatement, a ses frais.
Le Locataire aura le droit, n'importe quand et de temps a autre durant le Terme, et sans devoir payer un supplement de loyer, pourvu que la superficie des Lieux loues n'en soit pas augmentee, d'effectuer toutes reparations, modifications ou annexes aux Lieux loues qu'il jugera necessaires a la poursuite de ses activites. Cependant, le Locataire s'engage a:
(a) ne rien entreprendre qui puisse affaiblir l'Edifice;
(b) reparer les dommages causes aux Lieux loues par ces travaux;
(c) montrer au prealable au Locateur les plans relatifs aux modifications de la charpente de l'Edifice requises par lesdits travaux.
Le Locataire ne sera pas tenu de remettre ou replacer les Lieux loues dans leur etat primitif et, sous reserve des dispositions qui suivent, le Locateur devra les reprendre tels qu'ainsi transformes par le Locataire.
De plus, a n'importe quel moment avant l'expiration du Terme, ou dans les dix (10) jours suivants, le Locataire pourra, mais n'y sera pas tenu, enlever et emporter des Lieux loues les objets de toutes sortes apportes, installes et fixes par lui ou a ses frais avant ou apres le debut du terme. De facon generale mais non limitative, ces objets incluent tous les appareils et accessoires d'eclairage, outillage, machines, ustensiles, etageres, comptoirs, cloisons, coffres-forts, equipement de securite et tout objet place ou fixe dans les Lieux loues, ainsi que toute amelioration ou annexe aux Lieux loues, meme si ces objets, ameliorations ou annexes ou une partie d'entre eux ont ete fixes ou incorpores a l'Edifice de quelque facon que ce soit. Le Locataire s'engage cependant a reparer tout dommage qui resulterait de ce qui precede, sauf les dommages resultant d'usure normale, ces fortuits, force majeure et ceux qui auraient du etre couverts par l'assurance du Locateur.
14. REPARATIONS ET TRAVAUX DU LOCATEUR
Sous reserve de l'article intitule "Frais d'exploitation", le locataire devra, en tout temps, prendre soins des lieux loues et les tenir en ordre et en bon etat et libres de dechets, de neige et de glace, il s'occupera du nettoyage desdits endroits chaque fois que cela sera juge raisonnablement necessaire.
Le Locataire effectuera a ses frais toutes les reparations a l'Edifice et a ses composantes, et au Terrain. Il procedera a ces reparations en toute diligence raisonnable et selon les standards d'edifice de premiere classe et, quant aux Lieux loues, en observant constamment toutes les mesures de securite appropriees, compte tenu de ses activites propres.
Le Locataire avisera promptement le Locateur, par ecrit, de tout accident ou defectuosite dont il aurait connaissance, affectant les canalisations d'eau ou de gaz, les circuits et les appareils electriques, la tuyauterie ou les appareils de chauffage ou de climatisation. Le Locateur devra y remedier en toute diligence raisonnable.
Le Locateur, ses representants et ses employes auront le droit de penetrer dans les Lieux loues afin de les inspecter ou d'y faire des reparations urgentes et necessaires, pourvu que ces visites aient lieu a des heures convenables pour le Locataire et que les reparations soient effectuees avec toute la diligence necessaire et en prenant constamment toutes les mesures de securite requises, compte tenu du genre d'activites du Locataire.
15. DESTRUCTIONS DES LIEUX LOUES
Si, a une epoque quelconque du terme, les Lieux loues etaient detruits ou endommages, les dispositions ci-apres devront s'appliquer :
(a) si la destruction ou les dommages sont tels que plus de cinquante pour cent (50 %) de la superficie des Lieux loues est inutilisable par le Locataire, ou s'il est impossible, dangereux ou inapproprie d'utiliser ou d'occuper ladite superficie, ou si, dans l'un ou l'autre cas, de l'avis du Locateur, la destruction ou les dommages subis par les Lieux loues sont tels que les reparations necessaires ne puissent etre effectuees en toute
diligence raisonnable dans les quatre-vingt-dix (90) jours du sinistre (avis en ce sens devant etre donne par ecrit au Locataire par le Locateur dans les trente (30 jours du sinistre), dans ces conditions, le Locateur ou le Locataire peut, dans les trente (30) jours suivant l'avis donne par le Locateur de la facon susdite, resilier le present bail en avisant par ecrit l'autre partie de sa decision. Dans ces cas, le bail sera cense prendre fin a compter du jour du sinistre. Le loyer et tous les autres paiements incombant au Locataire en vertu des presentes seront calcules au prorata et verses entierement jusqu'a la date dudit sinistre. Dans le cas ou ni le Locateur ni le Locataire ne mettraient fin au bail, le Locateur devra reparer les Lieux loues ou toute diligence raisonnable et le paiement du loyer sera suspendu a compter de la date du sinistre jusqu'a la fin des reparations;
(b) si la destruction ou les dommages sont tels que moins de 50 % de la superficie des Lieux loues est inutilisable, les reparations devraient etre effectuees avec diligence raisonnable et le paiement du loyer sera suspendu a compter de la date du sinistre jusqu'a la fin des reparations, dans une proportion equivalente a la partie des Lieux loues jugee inutilisable, comme il est indique plus haut.
16. DESISTEMENT DE PRESOMPTION
Par les presentes, le Locateur renonce a la presomption legale creee en sa faveur par l'article 1621 du Code civil du Bas Canada.
17. ASSURANCES DU LOCATEUR
Le Locateur souscrira et conservera:
(a) pour l'ensemble de son exploitation, une assurance globale de responsabilite generale couvrant entre autres les dommages corporels et materiels ainsi que la responsabilite contractuelle, pour une valeur minimum de DEUX MILLION DE DOLLARS (2 000 000,00 $) par sinistre avec clause de responsabilite reciproque;
(b) une assurance tous risques de dommages materiels directes, notamment attribuables a une inondation ou un tremblement de terre, pour la valeur de remplacement integrale de l'Edifice et de ses ameliorations et installations, a l'exclusion des ameliorations locatives et autres installations fixes du Locataire;
(c) une assurance globale de dommages directs et de pertes d'exploitation par le fait d'une chaudiere ou d'une machine, applicable a toutes les chaudieres, canalisations sous pression, climatiseurs d'air et appareils electriques divers.
Les polices mentionnees aux paragraphes (a), (b) et (c) ci-dessus devront renfermer une clause de renonciation a tous de subrogation contre le Locataire.
A la demande du Locataire, le Locateur devra lui remettre un releve des risques et montants assures a l'egard de L'Edifice et de ses ameliorations et installations, et le Locataire pourra, a intervalles raisonnables et moyennant un preavis raisonnable au Locateur, examiner des copies des parties pertinentes de toutes les polices d'assurance en vigueur et une copie de tous les avis pertinents des conseillers en assurance du Locateur.
18. ASSURANCE DU LOCATAIRE
Le Locataire souscrira et conservera:
(a) pour les activites menees a l'interieur ou a partir des Lieux loues et pour l'utilisation ou occupation des Lieux loues et de toutes autres parties de l'Edifice, une assurance globale de responsabilite generale couvrant entre autres les dommages corporels et materiels ainsi que la responsabilite contractuelle; une assurance de responsabilite civile en cas d'incendie; et une assurance de responsabilite couvrant les automobiles ne lui appartenant pas, pour une valeur minimum de DEUX MILLIONS DE DOLLARS (2 000 000.00$) par sinistre. L'assurance devra nommer le Locateur comme assure et contenir une clause de responsabilite reciproque; et
(b) une assurance tous risques de dommages materiels directs, notamment attribuables a une inondation ou un tremblement de terre, pour la valeur de remplacement integrale de ses ameliorations locatives, installations fixes et contenu de toute nature. Cette assurance devra comporter une clause de renonciation aux droits de subrogation contre le Locateur et stipuler que les sommes versees en cas de sinistre aux ameliorations locatives le seront au Locataire (le Locataire autorisant toutefois l'affectation de ces sommes a la reparation ou au remplacement des biens assures, sauf resiliation de ce bail en vertu d'une autre clause).
Le Locateur convient que le Locataire aura un interet assurable dans les modifications, ameliorations et ajouts effectues par lui ou a ses frais aux Lieux loues avant comme apres le Terme et que le Locataire aura le droit d'assurer ces modifications, ameliorations et ajouts a leur pleine valeur, sans egard au fait qu'ils soient fixes ou integres a l'Edifice et que, au cas ou elles seraient totalement ou partiellement detruites, le Locataire ait le droit de percevoir et de conserver les indemnites payables aux termes de ladite assurance, le Locateur assurera le cout integral de tout sinistre en deca des differentes franchises.
A la demande du Locateur, le Locataire lui remettra une attestation des assurances qu'il aura souscrites, annulees ou renouvelees. S'il constate par cette attestation que le Locataire n'a pas assure les Lieux loues conformement a la presente clause, le Locateur peut lui faire part par ecrit de ses divers manquements a cet egard et le mettre en demeure de corriger la situation. Le Locataire dispose alors d'un delai de trente (30) jours pour obtemperer, a defaut de quoi le Locateur peut souscrire toute assurance additionnelle ou suppleante qu'il juge a propos, sous reserve de tous ses autres droits prevus a ce bail ou ailleurs, les primes et autres debourses etant a la charge du Locataire.
Les parties conviennent qu'ils pourront souscrire une police d'assurance conjointe a l'egard des couvertures exigees en vertu des articles 17 et 18 des presentes.
19. RESPONSABILITE LIMITEE ET INDEMNISATIONS
Le Locataire ne tiendra pas le Locateur responsable des dommages corporels (deces compris) ou materiels a lui-meme, a ses employes, a ses mandataires, survenus dans les Lieux loues ou ailleurs dans l'Edifice, sauf dans la mesure ou ces dommages sont causes par la faute du Locateur ou de toute personne dont il a le controle ou sont causes par les choses qu'il a sous sa garde ou s'ils resultent de la contravention ou de l'inexecution par le Locateur de ses obligations en vertu de ce bail ou de la loi.
Le Locataire tiendra le Locateur a couvert de tous dommages, responsabilites, reclamations, pertes ou depenses resultant de la faute du Locataire ou de toute personne dont il a le controle ou par suite de tout manquement du Locataire a une clause du present bail, sauf dans la mesure ou ces dommages sont
causes par la faute du Locateur ou de toute personne dont il a le controle ou causes par les choses qu'il a sous sa garde ou s'ils resultent de la contravention ou de l'inexecution par le Locateur de ses obligations en vertu de ce bail ou de la loi.
Le Locateur tiendra le Locataire a couvert de tous dommages, responsabilites, reclamations, pertes ou depenses resultant de la faute du Locateur ou de toute personne dont il a le controle ou resultant des choses qu'il a sous sa garde ou par suite de tout manquement du Locateur a ses obligations en vertu de ce bail ou de la loi, sauf dans la mesure ou ils sont causes par la faute du Locataire ou de toute personne dont il a le controle ou s'ils resultent de la contravention ou de l'inexecution par le Locataire de ses obligations en vertu de ce bail.
20. DEFAUT
Dans le cas de contravention par le Locataire de ses obligations le Locataire aura droit a un delai lui permettant de remedier au defaut. Ce delai sera de dix (10) jours dans le cas de non paiement du loyer, et de trente (30) jours dans les autres cas. Lesdits delais courront a compter de la reception d'un avis ecrit du Locateur, precisant la nature du defaut.
Dans le cas de contravention par le Locateur de ses obligations en vertu de ce bail ou de la loi, le Locateur aura droit a un delai lui permettant de remedier au defaut. Ce delai sera de trente (30) jours a compter de la reception d'un avis ecrit du Locataire, precisant la nature du defaut.
21. DESISTEMENT
Au cas ou le Locateur ou le Locataire, selon le cas, aurait omis de respecter rigoureusement l'une ou l'autre clause ou condition du present bail ou d'exercer quelque droit ou option lui revenant aux termes dudit bail, cette omission ne saurait etre interpretee comme un desistement ou un abandon de ces clauses, conditions, droits ou options, tous ceux-ci restant pleinement en vigueur, selon leur teneur.
22. RECOURS
Tous les recours et droits du Locateur et du Locataire sont cumulatifs et non alternatifs.
23. EXPROPRIATION
Dans les cas ou l'Edifice et le Terrain ("l'Immeuble") ou les Lieux loues seraient, en totalite ou en partie, soustraits au Locateur par droit de domaine eminent, expropriation, condamnation ou autre action similaire, ou dans le cas ou le Canada, une de ses provinces ou une municipalite exerceraient un droit quelconque les autorisant a exproprier tout ou partie de l'immeuble ou des Lieux loues, pendant le Terme, le Locateur et le Locataire consentent et s'engagent a ce qui suit:
(a) si la totalite de l'immeuble ou des Lieux loues selon le cas est soustraite et exproprie, le bail sera resilie a la date d'expropriation et le loyer cessera d'etre du a la date de la prise de possession des Lieux loues;
(b) si seulement une partie des Lieux loues est soustraite ou expropriee de la maniere enoncee, le paiement du loyer sera interrompu a la date de la prise de possession, au prorata de la partie des Lieux loues dont le Locataire se verra prive. Cependant, si le reste des Lieux loues etait juge insuffisant par le Locataire pour la poursuite de ses activites, ce dernier aura le privilege de resilier immediatement le present bail, en ce qui concerne la
totalite des Lieux loues, en envoyant un preavis ecrit au Locateur dans les trois (3) mois apres qu'on aura reclame la possession de ladite partie des Lieux loues, et le loyer et tout autre paiement dont le Locataire est tenu responsable en vertu des presentes devra etre calcule au prorata de la periode ecoulee a la date dudit avis et paye integralement;
(c) dans le cas ou plus de quarante pour cent (40 %) de l'Immeuble serait
soustrait ou exproprie de la maniere enoncee, meme sans affecter les Lieux
loues, le Locateur ou le Locataire aura le privilege de resilier
immediatement le present bail en ce qui concerne la totalite des Lieux
loues en envoyant a l'autre partie un preavis par ecrit, dans les trois
(3) mois apres qu'on aura reclame la possession de ladite partie de
l'immeuble; et le loyer et tout paiement dont le Locataire est tenu
responsable en vertu des presentes devra etre calcule au prorata de la
periode ecoulee a la date dudit avis et paye integralement; et
(d) nonobstant le fait que le present bail peut etre resilie par l'une ou l'autre des parties, tel que prevu aux paragraphes qui precedent, le Locataire aura droit de reclamer de la partie expropriante une indemnite ou des dommages-interets en prouvant qu'en raison de cette expropriation, il a subi une perte de clientele, une depreciation, des frais de demenagement de meubles et accessoires et/ou toute autre perte.
24. AVIS
Tout avis exige ou autorise aux termes du present bail doit etre envoye par Porteur ou par cable ou telegramme, ou par la poste certifiee ou recommandee dument affranchie, a l'autre partie a l'adresse indiquee ci-dessous ou a tout autre adresse que l'une ou l'autre partie pourra indiquer par courrier. Tout avis ainsi envoye sera repute avoir ete donne et recu le jour de la remise s'il est expedie par porteur, ou le jour ouvrable suivant son expedition s'il est transmis par cable ou telegramme, ou le troisieme jour ouvrable suivant la mise a la poste dans le cas d'envoi par la poste recommandee ou certifiee; toutefois, si le service des postes ou du cablogramme ou telegramme est interrompu par une greve, un ralentissement, un cas de force majeure ou toute autre cause, la partie expediant l'avis devra utiliser l'un desdits services qui n'est pas interrompu ou devra livrer l'avis de facon a ce qu'il soit recu le plus tot possible.
Les adresses des parties aux fins d'avis sont les suivantes:
le Locateur: 465 Godin
Ville Vanier (Quebec)
le Locataire: 465 Godin
Ville Vanier (Quebec)
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Si durant le Terme, il y a plus d'un locateur, tout avis sera cense validement donne et recu s'il est transmis a l'endroit prevu pour le paiement du loyer.
25. ENREGISTREMENT
Il sera loisible au Locataire d'enregistrer le present bail, a ses frais, par depot ou par bordereau, et le Locateur convient qu'il en sera de meme pour tout document le modifiant ou constatant tout renouvellement.
26. INTEGRALITE DE L'ENTENTE
Le present bail contient integralement l'entente entre les parties a l'egard des conventions prevues aux presentes et ne pourra etre modifie que par une convention ecrite subsequente intervenant entre les parties.
SIGNE le 1er jour de mars 1996, a Vanier
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
----------------------------- ------------------------------
Germain Lamonde Robert Tremblay
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INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
----------------------------- ------------------------------
Germain Lamonde Robert Tremblay
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ADDENDUM
BAIL ENTRE GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC. (LOCATEUR)
ET INGENIERIE ELECTRO-OPTIQUE EXFO INC. (LOCATAIRE)
Les paragraphes suivants ont ete modifies de la facon suivante :
1. LIEUX LOUES
A compter du 1 septembre 1998, la superficie louee situee au 436, Nolin, Vanier (Quebec) augmentera de 3,290 pieds carres pour un total de 33,790 pieds carres.
2. TERMES
NO COPY?
3. LOYER ANNUEL
A compter du 1 septembre 1998, le loyer mensuel sera de 16,895$ calcule sur une superficie de 33,790 pieds carres a un taux annuel de 6,00$ le pied carre.
SIGNE le e jour d'aout 1998, a Quebec.
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
----------------------------- ------------------------------
Germain Lamonde Robert Tremblay
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INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par:
/s/ Germain Lamonde /s/ Robert Tremblay
----------------------------- ------------------------------
Germain Lamonde Robert Tremblay
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ADDENDUM-2
ENTRE: GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
(le "Locateur");
ET: EXFO INGENIERIE ELECTRO-OPTIQUE INC.
(le "Locataire");
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ATTENDU QUE le Locataire et le Locateur ont conclu un bail en date du 1er mars 1996 pour des locaux dans un edifice situe au 436, Nolin, Vanier (Quebec) (le "Bail");
ATTENDU QU'EN aout 1998 le Locateur et le Locataire ont conclu un addendum au Bail afin de modifier la superficie des lieux loues (l'"Addendum");
ATTENDU QUE le Locateur et le Locataire desirent encore modifier le Bail afin de permettre sa resiliation par le Locataire conformement aux dispositions prevues aux presentes;
LES PARTIES ONT CONVENU DE CE QUI SUIT :
1. Le Bail est modifie en ajoutant le texte suivant en tant que paragraphe 27:
"Le Locataire pourra resilier le Bail unilateralement en donnant un preavis
ecrit de six (6) mois au Locateur advenant sa decision de demenager de
l'Edifice et de l'autre edifice propriete de Locateur situe a 465, avenue
Godin, Vanier, Quebec et dans laquelle le Locataire loue des locaux."
2. Sauf en ce qui concerne les modifications prevues au present Addendum-2, le Bail et l'Addendum demeurent pleinement en vigueur et sont, par les presentes, ratifies et confirmes et lient les parties aux presentes.
3. Tous les termes definis dans le Bail et l'Addendum auront le meme sens dans le present Addendum-2 a moins d'une disposition explicite a l'effet contraire.
EN FOI DE QUOI les parties ont signe a Vanier, Quebec, comme en date du 27e jour d'aout 1999.
GEXFO INVESTISSEMENTS EXFO INGENIERIE
TECHNOLOGIQUES INC. ELECTRO-OPTIQUE INC.
Par: /s/ Germain Lamonde Par: /s/ Germain Lamonde
------------------------ ------------------------
Germain Lamonde Germain Lamonde
Par: /s/ Robert Tremblay Par: /s/ Robert Tremblay
------------------------ ------------------------
Robert Tremblay Robert Tremblay
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CESSION DE BAIL
INTERVENUE A QUEBEC, EN DATE EFFECTIVE DU 1ER SEPTEMBRE 1999
ENTRE : 9080-9823 QUEBEC INC., personne morale legalement contituee
en vertu de la Loi sur les compagnies (Quebec), ayant son
siege social au 465, rue Godin, Vanier (Quebec), G1M 3G7,
agissant et representee aux presentes par messieurs Germain
Lamonde et Robert Tremblay, dument autorises tel qu'ils le
declarent ;
(ci-apres designee la "Cessionnaire")
ET : GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., personne morale
legalement constituee en vertu de la Loi sur les compagnies
(Quebec), ayant son siege social au 465, rue Godin, Vanier
(Quebec), G1M 3G7, agissant et representee aux presentes par
messieurs Germain Lamonde et Robert Tremblay, dument
autorises tel qu'ils le declarent ;
(ci-apres designee la "Cedante")
ET : EXFO INGENIERIE ELECTRO-OPTIQUE INC., personne morale
legalement constituee en vertu de la Loi canadienne sur les
societes par actions, ayant son siege social au 465, rue
Godin, Vanier (Quebec), G1M 3G7, agissant et representee aux
presentes par messieurs Germain Lamonde et Robert Tremblay,
dument autorises tel qu'ils le declarent ;
(ci-apres designee "EXFO")
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ATTENDU qu'un bail est intervenu le 1er mars 1996 entre la Cedante et EXFO en vertu duquel EXFO loue des locaux ayant une superficie approximative de trente mille cinq cents pieds carres (30 500 pi2) dans un immeuble situe au 436, rue Nolin, Vanier (Quebec) (l'"Immeuble") (le "Bail");
1.
ATTENDU qu'en aout 1998, la Cedante et la Cessionnaire ont conclu un addendum au Bail afin de modifier la superficie des lieux loues (l'"Addendum");
ATTENDU qu'en date du 27 aout 1998, la Cedante et EXFO ont conclu un addendum au Bail afin de modifier les modalites de resiliation du Bail (l'"Addendum-2");
ATTENDU que le 1er septembre 1999, la Cedante a vendu, cede et transfere a la Cessionnaire, l'Immeuble ci-haut mentionne aux termes d'un contrat de vente intervenu entre elles;
ATTENDU qu'il etait de l'intention des parties qu'une cession du Bail, de l'Addendum et de l'Addendum-2 intervienne entre la Cedante et la Cessionnaire lors de la cession de l'Immeuble et que la Cessionnaire et EXFO desiraient reconduire le Bail, l'Addendum et l'Addendum-2 aux memes termes, modalites et conditions;
EN CONSEQUENCE, LES PARTIES CONVIENNENT DE CE QUI SUIT :
1. La Cedante cede et transfere a la Cessionnaire, qui accepte, le Bail, l'Addendum et l'Addendum-2 ainsi que tous les droits, interets, responsabilites et obligations y afferents, incluant notamment le droit de EXFO de mettre fin au Bail sur un preavis ecrit de six (6) mois de la part de EXFO advenant un eventuel demenagement de EXFO hors l'Immeuble tel que stipule a l'Addendum-2 et a l'article 16.1 de la convention du 26 aout 1999 a laquelle sont parties la Cedante et EXFO, et ce, en date effective au 1er septembre 1999, liberant la Cedante de toute obligation et responsabilite decoulant du Bail a compter de cette date.
2. La Cessionnaire et EXFO conviennent et reconnaissent que le Bail, l'Addendum et l'Addendum-2 sont reconduits entre elles aux memes prix, termes, conditions et modalites a compter du 1er septembre 1999.
3. La Cedante, la Cessionnaire et EXFO conviennent de faire, signer et executer et voir a ce que soit fait, signe et execute tout autre ecrit, acte ou document et realiser toute autre demarche et formalite que l'une ou l'autre des parties pourrait raisonnablement demander aux fins de donner effet a la presente cession.
EN FOI DE QUOI, LES PARTIES ONT SIGNE LA PRESENTE CESSION.
9080-9823 QUEBEC INC. GEXFO INVESTISSEMENTS
TECHNOLOGIQUES INC.
Par: /s/ Germain Lamonde Par: /s/ Germain Lamonde
------------------------ ------------------------
Germain Lamonde Germain Lamonde
2.
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Par : /s/ Robert Tremblay Par : /s/ Robert Tremblay
-------------------------- --------------------------
Robert Tremblay Robert Tremblay
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EXFO INGENIERIE ELECTRO-OPTIQUE INC.
Par : /s/ Germain Lamonde
--------------------------
Germain Lamonde
Par : /s/ Robert Tremblay
--------------------------
Robert Tremblay
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3.
ADDENDUM-3
ENTRE : 9080-9823 QUEBEC INC
(le "Locateur");
ET : EXFO INGENIERIE ELECTRO-OPTIQUE INC.
(le "Locateur");
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ATTENDU QUE le Locataire et GEXFO Investissements Technologiques Inc. ont conclu un bail en date du 1er mars 1996 pour des locaux dans un edifice situe au 436, Nolin, Vanier (Quebec) (le "Bail");
ATTENDU QU'EN aout 1998 GEXFO Investissements Technologiques inc. et le Locataire ont conclu un addendum au Bail afin de modifier la superficie des lieux loues (l'"Addendum");
ATTRENDU QU'EN date du 27 aout 1999, GEXFO Investissements Technologiques inc. et le Locataire ont conclu un autre addendum au Bail (l'"Addendum 2") afin de modifier les modalites de resiliation du Bail;
ATTENDU QUE GEXFO Investissements Technologiques inc. cede le Bail et tous ses droits, interets, responsabilites et obligations y afferents au Locateur en date du 1er septembre 1999;
ATTENDU QUE le Locateur et le Locataire desirent encore modifier le Bail et l'Addendum afin d'augmenter la superficie des lieux loues et ajuster le loyer;
LES PARTIES ONT CONVENU DE CE QUI SUIT :
1. Les paragraphes du Bail et de l'Addendum intitules "Lieux loues", sont modifies afin de prevoir qu'a compter du 1er mars 2000 la superficie des Lieux loues augmentera de 10 374 pieds carres pour une superficie totale de 44 164 pieds carres.
2. les paragraphes du Bail et de l'Addendum intitules "Loyer annuel" sont modifies afin de prevoir qu'a compter du 1er mars 2000 le Locataire paiera un loyer annuel de 220 820 $, soit 5,00 $ le pied carre par annee, payable d'avance le premier jour de chaque mois en versements egaux et consecutifs de 18 401.67 $
3. Sauf en ce qui concerne les modifications prevues au present Addendum-3, le Bail, l'Addendum et l'Addendum-2 demeurent pleinement en vigueur et sont, par les presentes, ratifies et confirmes et lient les parties aux presentes.
1.
4. Tous les termes definis dans le Bail et l'Addendum auront le meme sens dans le present Addendum-3 a moins d'une disposition explicite a l'effet contraire.
EN FOI DE QUOI les parties ont signe a Vanier, Quebec, comme en date du 1er jour de mars 2000.
9080-9823 QUEBEC INC. EXFO INGENIERIE
ELECTRO-OPTIQUE INC.
Par : /s/ Germain Lamonde Par : /s/ Germain Lamonde
---------------------------- ----------------------------
Germain Lamonde Germain Lamonde
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2.
EXHIBIT 10.6
SUMMARY IN ENGLISH
Deferred Profit Sharing Plan, dated September 1, 1998.
PURPOSE OF THE PLAN: To allow EXFO's employees to participate in the
company's profit while deferring income tax on the
contribution and interests and to provide EXFO's
employees with a complementary retirement income to
supplement the government plans.
EFFECTIVE DATE: September 1, 1998.
ELIGIBILITY: Full-time and part-time employees of EXFO who have been
with the company for 6 months except for:
(i) person related to the company;
(ii) any shareholder of the company or of a
corporation associated with the company and any
person related to such shareholder.
CONTRIBUTION BY THE A minimum of 2% of the employee's gross salary to his
PARTICIPANT: or her individual tax-deferred registered retirement
savings plan.
CONTRIBUTION BY EXFO: 1% of each employee gross salary to that employee's
individual deferred profit sharing plan to the extent
that such employee contribute 2% of his or her gross
salary. In addition, EXFO may also make discretionary
contribution of up to 4% of an employee's gross salary
to his or her individual tax deferred registered
retirement savings plan depending on his or her and
EXFO's performance.
LIMIT TO CONTRIBUTION: The lower of:
(i) 18% of the employee's earned income for the
previous year; or
(ii) 50% of the dollar limit set for the year the
contributions are made.
INVESTMENT: In any investement vehicle offered by the trustee
(Standard Life).
TERMINATION OF Employee not entitle to the contribution made to the
EMPLOYMENT: program by EXFO if the employee has less than 2 years
of membership in the program.
RETIREMENT: Within 90 days following the retirement date, an
employee may:
(i) receive annual or more frequent payment over a
maximum of 10 years following the date the
employee's account reaches maturity;
(ii) purchase an annuity;
(iii) transfer the balance in his or her account, tax
free, to an individual RRSP;
(iv) choose a cash refund.
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REGIME DE
PARTICIPATION DIFFEREE AUX BENEFICES
DE INGENIERIE ELECTRO-OPTIQUE EXFO
Decembre 1998
PREAMBULE
Le present texte constitue le reglement officiel du regime de participation differee aux benefices de Ingenierie electro-optique EXFO (RPDB).
Pour des fins de souplesse administrative, le texte du fiduciaire, preapprouve par les autorites gouvernementales, avec les adoptions necessaires, a ete utilise pour enregistrer ledit RPDB.
1. BUT DU REGIME
Offrir aux participants des droits a une partie des benefices de la compagnie, les interesser a l'entreprise et reporter l'imposition des benefices partages jusqu'a leur distribution, possiblement la retraite.
2. ACTE DE FIDUCIE
Les droits des participants sont garantis par une caisse de retraite qui releve du fiduciaire en vertu de l'acte de fiducie du 4 aout 1998.
3. PRISE D'EFFET
Le regime prendra effet le 1er septembre 1998, ou a une date ulterieure qui sera arretee par Revenu Canada.
4. ADMISSIBILITE ET ADHESION
Tout employe, autre que syndique, declare admissible par la compagnie peut adherer au regime.
Les employes admissibles adherent au regime apres le delai suivant selon leur categorie d'emploi:
CATEGORIE DELAI
--------- -----
Employe non-syndique 6 mois apres sa date d'embauche
Chef de groupe 6 mois apres sa date d'embauche
Directeur 6 mois apres sa date d'embauche
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Le delai precite peut-etre supprime pour tout employe designe par l'employeur si ce dernier en decide ainsi.
Cependant, sont exclues les personnes suivantes:
a) toute personne ayant un lien de parente avec l'employeur;
b) tout actionnaire designe - dont la definition figure a l'alinea 248 (1) de la Loi de l'impot sur le revenu - de l'employeur ou d'une societe associee a l'employeur, et toute personne ayant un lien de parente avec ledit actionnaire.
Une fois informe par la compagnie de l'adhesion d'un employe au regime, le fiduciaire lui notifie par ecrit et sans delai sa qualite de participant, ses droits et privileges accordes en vertu du regime.
5. COTISATIONS
a) La compagnie s'engage a verser des cotisations patronales sur une base volontaire jusqu'a concurrence du maximum deductible en vertu de la Loi de l'impot sur le revenu, qu'elle puisera sur les benefices realises ou les benefices non repartis et les versera a la fiducie dans les 120 jours suivant la cloture de son exerecice financier.
b) Le montant des cotisations versees au nom du participant est fixe par le conseil d'administration de la compagnie. L'annexe "A" indique la methodologie employee pour determiner la repartition des cotisations entre les participants. Le fiduciaire doit allouer aux participants les cotisations qu'il recoit dans l'annee ou il les a recues.
c) Seules sont autorisees les cotisations prevues au paragraphe a)
ci-dessus et les sommes transferees, en vertu du paragraphe 147
(19) de la Loi, d'un autre regime de participation differee aux
benefices dont le participant etait beneficiaire.
d) Pour chaque participant, le total des cotisations qui lui est alloue pour l'annee quant a un employeur dans le cadre du present regime ne peut exceder le moins eleve des montants suivants:
i) 18 % de la retribution (au sens de la Loi) versee dans l'annee par l'employeur au participant.
ii) 50 % du plafond des cotisations determinees pour l'annee;
e) Pour chaque participant, le total des cotisations qui lui est alloue pour l'annee dans le cadre du regime ou du RPDB d'un autre employeur qui, a un moment donne de l'annee, a un lien de dependance avec l'employeur ne peut exceder la moitie du plafond des cotisations determinees pour l'annee.
f) Pour chaque participant, le total de ses facteurs d'equivalence pour l'annee quant a l'employeur ou quant a tout autre employeur qui, a un moment donne de l'annee a un lien de dependance avec l'employeur ne peut exceder le moindre des montants ci-apres:
i) 18 % de la retribution (au sens de la loi) versee dans l'annee par les employeurs au participant.
ii) 50 % du plafond des cotisations determinees pour l'annee;
6. PLACEMENTS ET REVENUS
a) Chaque participant a le choix d'investir les cotisations versees en son nom dans l'un des fonds offerts par le fiduciaire.
b) La repartition des cotisations entre les differents fonds de placement offerts par le fiduciaire peut etre modifiee en tout temps.
c) Le fiduciaire doit tenir, pour chaque participant, un compte distinct, appele le compte du participant, auquel sera portee, au plus tard dans les 90 jours suivant la cloture de l'exercice du regime, sa fraction des gains ou pertes en capital, des dividendes, de l'interet et des revenus de placements accumules a la fiducie au cours de l'exercice. Les frais de gestion de placements assumes par le fiduciaire doivent egalement etre divises et imputes aux comptes des participants.
d) Aucune partie des fonds de la fiducie ne peut etre placee en billets, obligations non garanties ou autres titres semblables de l'employeur ou d'une corporation avec laquelle cet employeur a un lien de dependance.
e) Aucune partie des fonds de la fiducie ne peut etre placee en actions d'une corporation dont au moins 50 % des biens consistent en titres vises par l'alinea ci-dessus.
f) Le fiduciaire ne peut faire que des placements admissibles tel que defini a l'article 204 de la Loi de l'impot sur le revenu.
7. ACQUISITION DES DROITS
Les cotisations, les interets et les plus ou moins values qui sont comptabilises au nom du participant, lui sont acquis apres une periode de participation de:
CATEGORIE NOMBRE DE MOIS
--------- --------------
Employe non-syndique 24 mois
Chef de groupe 24 mois
Directeur 24 mois
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Cependant, lors d'un deces, l'acquisition est immediate.
L'acquisition ne peut en aucun cas etre annulee en raison d'un renvoi motive ou d'une adhesion syndicale.
Le delai d'acquisition precite peut etre supprime pour tout employe designe par l'employeur si ce dernier en decide ainsi.
Les cotisations non acquises (montants perdus) sont remboursees avec interets a l'employeur au plus tard le 31 decembre de l'annee qui suit l'annee civile durant laquelle le participant a cesse sa participation au regime ou dans le delai supplementaire accorde par ecrit par le ministere du Revenu national.
8. DATE NORMALE DE RETRAITE
La date normale de retraite du participant correspond au 1er jour du mois qui suit le mois de son 65e anniversaire de naissance.
9. LIQUIDATION DES DROITS
Les droits acquis par le participant lui sont regles selon le cas d'apres l'une ou l'autre des dispositions ci-apres:
a)
1. A LA RETRAITE
Le participant prend une retraite normale, anticipee ou differee (au plus tard a l'age de 69 ans), selon ce dont il convient avec l'employeur. Il a alors droit a la valeur totale des droits portes a son compte.
2. MODES DE REGLEMENT
Le participant peut choisir l'un des modes de reglement ci-apres:
i) un reglement au comptant;
ii) des versements annuels ou plus frequents echelonnes sur une periode maximum de 10 ans depuis sa date de retraite;
iii) une prime unique versee a une personne habilitee a faire le commerce des rentes au Canada pour la constitution d'une rente destinee au participant et dont le service debutera au plus tard le 31 decembre de l'annee civile ou ce dernier a atteint l'age de 69 ans. Ladite rente viagere payable mensuellement pourra comprendre une garantie n'excedant pas 180 versements;
iv) un versement forfaitaire transfere directement a un regime de retraite agree, a un regime d'epargne- retraite agree, ou a un autre regime de participation differee aux benefices.
Au plus tard 90 jours apres la prise de retraite du participant, le fiduciaire procede au reglement selon le mode choisi par le participant. A defaut de choix par le participant, le fiduciaire lui paie la pleine valeur de son compte en un versement unique.
b) AU DECES AVANT LA RETRAITE
Si le participant decede avant la date normale de sa retraite, sa participation au regime prend fin. La designation du beneficiaire peut se faire par un avis ecrit en tout temps par le participant. Si le beneficiaire designe ne survit pas au participant, le fiduciaire reglera dans les 90 jours suivant le deces du participant, ses droits a la succession de ce dernier en un versement unique.
S'il y a un beneficiaire, le fiduciaire lui paiera en un versement unique, dans les 90 jours suivant le deces du participant, la valeur des droits portes au compte du participant.
Si le beneficiaire est le conjoint ou un concubin, defini aux sous-alineas 252(3) et (4) de la Loi de l'impot sur le revenu, ledit conjoint ou concubin pourra opter pour le transfert decrit en a) 2 (iv) ci-haut.
c) APRES LA CESSATION DE SERVICE
En cas de cessation de service anterieure a la date normale de retraite et non reliee a un deces, la participation de l'employe au regime prend fin. Il doit toucher, dans les 90 jours qui suivent sa cessation de participation, la valeur des droits acquis portes a son compte.
Le participant peut demander au fiduciaire de proceder au reglement d'apres l'un des modes prevus a la prise de retraite.
d) AVANT LA CESSATION DE SERVICE
Le participant ne peut retirer la totalite ou une partie de ses droits acquis en aucun cas avant sa cessation de service.
10. CONGE
En cas de conge autorise, notamment pour cause de maladie, d'accident ou de service dans les forces armees, l'employeur peut decider si l'employe continue de participer ou non au regime; mais aucune regle ne resultera d'un accord conclu avec le participant. L'employeur prendra sa decision cas par cas. S'il decide que la participation de l'employe prend fin, les droits seront liquides d'apres les dispositions de cessation de service.
11. GESTION
a) Le fiduciaire doit, relativement au regime, etudier toute question et prendre toute decision reliee a la gestion, au fonctionnement et a l'interpretation du regime.
b) Toutes les cotisations de l'employeur doivent etre versees a la fiducie geree par le fiduciaire.
c) Toutes modifications doivent etre notifiees aux participants par le fiduciaire dans les 30 jours qui suivent leur prise d'effet.
12. INCESSIBILITE
Le regime interdit la cession ou le rachat de tout droit en vertu du regime. Il en interdit egalement le transfert et l'alienation, intentionnels ou non, de la part du participant ou de ses ayants droit ou, encore, resultant de l'application de la loi. Tout droit devra egalement etre exempte de tout lien, execution, saisie decoulant de poursuites judiciaires ou autres.
Le regime ne peut d'aucune facon permettre un pret a un quelconque beneficiaire ou participant.
13. MODIFICATION OU RESILIATION
La compagnie compte maintenir le regime en vigueur, mais elle se reserve le droit de le modifier ou de le resilier si elle le juge necessaire.
Toute modification ou resiliation n'alterera par les garanties creditees aux participants en vertu du regime. Lesdites garanties seront payables aux participants au plus tard 90 jours apres la resiliation du regime.
La liquidation, la vente ou la fusion de la compagnie entrainera d'office la resiliation du regime a moins qu'il ne soit transfere a une autre societe.
14. NON-VALIDITE DES DISPOSITIONS
Si toute disposition du regime est consideree illegale ou non valide, quelles que soient les raisons, ladite illegalite ou non-validite n'alterera aucunement les autres dispositions du regime. Le regime sera repute ne pas contenir ladite disposition illegale ou non valide.
15. RESTRICTIONS
Aucune garantie, avance autre que:
i) toute garantie dont le montant doit etre inclus dans le calcul du revenu du participant,
ii) tout montant mentionne aux sous-alineas 147 (10) (a) et 147 (10)
(b) de la Loi de l'impot sur le revenu,
iii) toute garantie provenant de sommes allouees une premiere fois ou allouees de nouveau mentionnes a l'alinea 147(2) de la Loi de l'impot sur le revenu ou
iv) toute garantie provenant de services administratifs ou de placements fournis relativement au regime,
qui est conditionnelle de quelque facon que ce soit au maintien en vigueur du regime, ne peut etre accordee a un participant ou a une personne avec laquelle il a un lien de dependance.
ANNEXE A
REPARTITION DES COTISATIONS PATRONALES
Les cotisations patronales sont subdivisees en trois categories; les cotisations de base, les cotisations complementaires et les cotisations supplementaires.
Aucune cotisation de base ou complementaire n'est due a un employe qui ne verse pas une cotisation minimale, dite de base, au REER collectif de Ingenierie electro-optique EXFO qui est fixee a 2 % de son salaire de base. Si un participant retire une partie de ses sommes accumulees a titre de cotisations de base au REER, les cotisations patronales futures, lui etant allouees au RPDB, seront reduites du montant retire. Cette penalite ne s'applique pas sur un retrait effectue sur le solde de ses cotisations facultatives au REER. L'employeur pourra deroger a cette regle si l'employe justifie les causes de son retrait et que celles-ci satisfont l'employeur.
Par exemple, la participation a un regime d'accession a la propriete n'occasionnera pas la penalite citee precedemment.
LES COTISATIONS DE BASE
CATEGORIE TAUX DE COTISATION
--------- ------------------
Employe non-syndique 1 % du salaire de base courant
et des commissions courantes
Chef de groupe et directeur 1 % du salaire de base courant
et des commissions courantes
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Les cotisations de base sont remises au fiduciaire au moins mensuellement. Le salaire de base doit etre determine au prorata du nombre de paies par annee.
LES COTISATIONS COMPLEMENTAIRES
Les cotisations sont basees sur le degre de realisation des objectifs de la compagnie et du rendement du participant pour une annee donnee. Le taux de cotisations sera determine en temps et lieu par l'employeur et pourra varier selon la categorie d'emploi.
Le taux sera en fonction du salaire de base courant et des commissions ajustees du participant a la date du versement, multiplie par la participation active au regime au cours des 12 derniers mois finissant le dernier jour de l'exercice financier de la compagnie divisee par 12.
Les cotisations complementaires sont remises au fiduciaire une fois l'an, soit dans les 120 jours du dernier exercice financier de la compagnie, aux participants qui sont a l'emploi de la compagnie a la date du depot.
LES COTISATIONS SUPPLEMENTAIRES
L'employeur peut verser une cotisation discretionnaire dite supplementaire a n'importe quel participant. Toutefois, cette cotisation ne doit pas faire en sorte que les cotisations patronales depassent les montants maximums prevus au texte du regime.
Ces cotisations sont remises au fiduciaire au moment determine par l'employeur.
LIMITES DES COTISATIONS PATRONALES
Pour une annee donnee, les cotisations de base et complementaires pour l'ensemble des participants sont limitees a 5 % du benefice avant impot de la compagnie. Lorsque les cotisations atteignent cette limite, les cotisations a verser pour un participant seront alors egales a celles prevues, sans tenir compte de la limite, multipliees par le ratio suivant:
DEFINITIONS
Salaire de base: Salaire annuel excluant les commissions, les bonis
et les autres avantages imposables.
Salaire de base courant: Salaire de base au moment de la paie.
Commissions ajustees: Total des commissions versees a l'employe durant le
dernier exercice financier de la compagnie.
Commissions courantes: Commissions payables a une date donnee qui
correspond a une date de paie.
Participation active: Periode durant laquelle le participant a verse ses
cotisations minimales au REER collectif.
Objectifs de la compagnie: Seront determines annuellement par la compagnie.
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COMITE DE PLACEMENT
DU
REGIME DE PARTICIPATION DIFFEREE
AUX BENEFICES
ET DU
REGIME ENREGISTRE D'EPARGNE RETRAITE COLLECTIF
DE
INGENIERIE ELECTRO-OPTIQUE EXFO
Decembre 1998
SECTION 1
INTRODUCTION
Ce document decrit le role, les fonctions ainsi que les pouvoirs du Comite de placement du regime de participation differee aux benefices (RPDB) et du regime enregistre d'epargne retraite collectif de Ingenierie electro-optique EXFO.
Les regles de ces regimes sont decrites dans les documents appropries.
Ce document decrit aussi le mode de fonctionnement du Comite de placement.
SECTION 2
2.1 Le comite est compose en tout temps de quatre membres designes comme suit:
- deux personnes designees par l'employeur;
- deux personnes designees par les participants lors de l'assemblee
annuelle.
2.2 Les membres du comite elisent parmi eux le president, le vice-president et le secretaire-tresorier.
2.3 Le president du comite est l'officier executif en charge du comite. Il preside toutes les reunions et voit a l'execution des decisions qui y sont prises.
2.4 Le vice-president remplit les fonctions du president quand ce dernier est absent.
2.5 Le secretaire-tresorier dresse les proces-verbaux des reunions du comite qu'il consigne dans les registres tenus a cette fin.
2.6 Les membres du comite entrent en fonction a la date de leur nomination et le demeurent jusqu'a l'expiration de leur mandat qui est de trois ans.
2.7 Advenant la demission, la revocation d'un des membres ou a la fin de son mandat, ceux qui demeurent en fonction, s'ils forment quorum, peuvent exercer seuls les pouvoirs et droits accordes au comite jusqu'a ce qu'un remplacant soit nomme.
2.8 Lorsqu'une vacance survient au sein du comite, elle est comblee de la meme maniere que pour la nomination des membres prevue ci-dessus et en respectant les memes criteres.
2.9 Le comite se reunit, a l'endroit indique aux jours et heures determines par le comite, sur preavis d'au moins 48 heures. Cependant,
une reunion peut etre tenue en tout temps sans cet avis si tous les
membres y consentent.
2.10 Le quorum des reunions du comite est de trois membres.
2.11 Un registre devra etre tenu afin d'y inscrire tout conflit d'interet
dans lequel un ou plusieurs membres du comite peuvent etre places.
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SECTION 3
3.1 Le role du Comite de placement est de faire des suggestions a l'employeur concernant le choix des mandataires tels que le gardien des valeurs, le fiduciaire et le gestionnaire de la caisse du RPDB et du REER collectif.
3.2 D'aucune facon, il ne faut interpreter le Comite de placement comme une entite decisionnelle concernant l'administration et la gestion du RPDB et du REER collectif.
3.3 Le Comite de placement exercera son role en tenant compte des caracteristiques des participants et de leurs besoins ainsi que des objectifs fixes par l'employeur concernant le RPDB et le REER collectif.
SECTION 4
4.1 Sans restreindre les fonctions et les pouvoirs qui lui sont necessaires a l'execution de son role, le comite doit particulierement:
a) lorsqu'il y a lieu, preparer un cahier des charges puis analyser les soumissions afin de suggerer a l'employeur, le ou les mandataires requis;
b) faire une ou des suggestions a l'employeur concernant le nombre de fonds accessibles par les participants ainsi que le type de fonds;
c) faire un suivi des mandataires annuellement afin d'evaluer leurs performances et transmettre a l'employeur les recommandations resultantes de l'analyse du suivi;
d) recueillir les demandes des participants concernant les placements;
e) participer a l'assemblee annuelle afin de transmettre verbalement aux participants le compte rendu de leurs operations.
4.2 Afin d'exercer ses fonctions, le comite peut engager un tiers, ayant les competences requises, pour produire ou aider le comite a produire les analyses requises, sous reserve de l'approbation de l'employeur car ce dernier assumera les frais et les honoraires de ce tiers.
4.3 Un membre du comite ne peut exercer ses pouvoirs dans son propre interet ni dans celui d'un tiers.
EXHIBIT 10.7
STOCK OPTION PLAN
OF EXFO ELECTRO-OPTICAL ENGINEERING INC.
1. PURPOSE OF THE PLAN
1.1 The purpose of the stock option plan (the "PLAN") for directors, executive officers, employees and other persons or companies providing ongoing management or consulting services (the "CONSULTANTS") to EXFO Electro-Optical Engineering Inc. (the "CORPORATION") or to any of the Subsidiaries of the Corporation is to secure for the Corporation and its shareholders the benefit of an incentive to partake in share ownership by directors, executive officers and employees of the Corporation and its Subsidiaries, as the case may be, and by certain Consultants who provide services on a continuous basis. For the purposes of the Plan, "SUBSIDIARIES" shall mean (i) any legal entity of which the Corporation is the holder or the beneficiary, at the time of the granting of the option, directly or indirectly, otherwise than by way of security only, of securities to which are attached over 50% of the votes enabling it to elect the majority of the directors of such entity as well as any subsidiary of such legal entity and (ii) any legal entity in which the Corporation or a subsidiary of the Corporation holds at least 50% of the voting rights or in which it has a majority interest and of which the Corporation or a subsidiary of the Corporation manages the operations.
2. ADMINISTRATION
The Plan shall be administered by the Corporation's Board of Directors (the "BOARD") or the Human Resources Committee or any other committee constituted from time to time (the "COMMITTEE"). The Board or the Committee shall have full and complete latitude to interpret the Plan and to establish the rules and regulations applying to it and to make all other determinations it deems necessary or useful for the administration of the Plan, including without limiting the scope of the foregoing and subject to subsection 6.3, to change an Early Expiry Date (as defined hereinafter) provided that such interpretations, rules, regulations and determinations shall be consistent with the relevant policy statements of the competent securities authorities and the rules of the stock exchanges on which the securities of the Corporation are listed.
3. SHARES SUBJECT TO THE PLAN
The shares subject to the Plan are the Subordinate Voting Shares (the "SHARES") of the Corporation. The total number of Shares that may be issued under the Plan shall not exceed 4,470,961 Shares of the Corporation, subject to the adjustment under Section 11, and no Optionee (as defined hereinbelow) shall hold options to purchase more than 5% of the number of Shares issued and outstanding from time to time. All of the Shares covered by options that will have expired or have been cancelled without being exercised according to
the terms of the Plan shall become reserved Shares for the purposes of options that may be subsequently granted under the terms of the Plan.
4. GRANT OF OPTIONS
The Board or the Committee shall from time to time designate the directors, officers or employees of the Corporation or any of its Subsidiaries, as the case may be, or the Consultants to whom options shall be granted (an "OPTIONEE") and the number of Shares covered by each of such option. Any Optionee may hold more than one option. The granting of each option shall be evidenced by a letter from the Corporation addressed to the Optionee setting forth the number of Shares covered by such option, the subscription price, the terms and conditions of exercise of the option and the option period.
5. SUBSCRIPTION PRICE
The subscription price of the Shares subject to an option shall be established by the Board or the Committee at the time of the grant, but such price shall not be less than the market price of the Shares at the date of the granting of the option (the "GRANT DATE"), calculated as the greater of the closing prices of the Shares on The Toronto Stock Exchange and the Nasdaq National Market on the last trading day preceding the Grant Date or, if the Shares did not trade on such last trading day, the greater of the average, rounded off to the nearest cent, of the bid and ask prices for the Shares on The Toronto Stock Exchange and the Nasdaq National Market at the close of trading on such last trading day preceding the Grant Date (the "SUBSCRIPTION PRICE").
The closing price of the Shares or, as the case may be, the average of the bid and ask prices of the Shares at the close of trading on the NASDAQ National Market shall be converted into Canadian dollars at the noon buying rate of Federal Reserve Bank of New York on the Grant Date when such conversion is required.
6. OPTION PERIOD
6.1 Subject to the provisions of subsections 6.2 and 6.3, each option shall be exercisable during a period established by the Board or the Committee (the "OPTION PERIOD"); such period shall commence no earlier than the Grant Date and shall terminate no later than ten years after such date.
6.2 Notwithstanding the provisions of subsection 6.1, an option shall not be exercisable by an Optionee from and after each and every one of the following dates (an "EARLY EXPIRY DATE"), unless the Board or the Committee decides otherwise:
6.2.1 in the case where the Optionee is an officer or an employee, the
date on which the Optionee resigns or voluntary leaves his
employment with the Corporation or one of its subsidiaries, as
the case may be, or the date on which the employment of the
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-3-
Optionee with the Corporation or one of its Subsidiaries is
terminated for a good and sufficient cause, as the case may be;
6.2.2 in the case where the Optionee is a director of the Corporation
or one of its Subsidiaries, as the case may be, but is not
employed by either the Corporation or one of its subsidiaries,
30 days following the date on which such Optionee ceases to be a
member of the Board of Directors for any reason other than death;
6.2.3 (i) in the case where the Optionee is an officer or employee,
6 months following the date on which the Optionee's employment
with the Corporation or any of its Subsidiaries, as the case may
be, is terminated by reason of death or (ii) in the case where
the Optionee is a director of the Corporation or any of its
Subsidiaries, as the case may be, but is not employed by either
the Corporation or any of its Subsidiaries, 6 months following
the date on which such Optionee ceases to be a member of the
Board of Directors by reason of death;
6.2.4 in the case where the Optionee is an officer or employee, 30 days
following the date on which the Optionee's employment with the
Corporation or any of its Subsidiaries, as the case may be, is
terminated for any cause or reason other than those mentioned in
paragraphs 6.2.1 and 6.2.2, including, without limiting the scope
of the foregoing, disability, illness, retirement or early
retirement. Notwithstanding the foregoing, in case of retirement
or early retirement of an officer or employee, the Board or the
Committee may at its own discretion but subject to Section 2,
extend the Early Expiry Date mentioned in this paragraph 6.2.4;
6.2.5 in the case where the Optionee is a Consultant, 30 days following
the date on which his contract as a Consultant is terminated or,
as the case may be, 30 days following the receipt by the
Consultant of a notice from the Corporation indicating that the
options must be exercised within 30 days from the date of receipt
of the notice.
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6.3 The rules set forth in paragraph 6.2 shall not be interpreted in such a manner as to extend the Option Period beyond 10 years.
6.4 All rights conferred by an option not exercised at the termination of the Option Period or from and after any Early Expiry Date shall be forfeited.
7. EXERCISE OF OPTIONS
7.1 Subject to the provisions of section 6, an option may be exercised in whole, at any time, or in part, from time to time, during the Option Period, but in all cases in accordance with the exercise frequency established by the Board or the Committee and applicable at the time of the grant.
7.2 An option may be exercised by forwarding a duly executed subscription form as attached hereto as Schedule 1 (the "Subscription Form") to the Secretary of the Corporation. Such Subscription Form shall set forth the number of Shares so subscribed and the address to which the Share Certificate is to be delivered. The Subscription Form shall also be accompanied by a certified cheque made payable to the Corporation in the amount of the Subscription Price. The Corporation shall cause a certificate for the number of Shares specified in the Subscription Form to be issued in the name of the Optionee and delivered to the address specified in the Subscription Form no later than 10 business days following the receipt of such Subscription Form and cheque.
8. NO ASSIGNMENT
No option or interest therein shall be assignable for purpose of transfer of guarantee or otherwise by the Optionee other than by will or the operation of applicable legal dispositions regarding succession.
9. NOT A SHAREHOLDER
An Optionee shall have no rights as a shareholder of the Corporation with respect to any Shares covered by his/her option until he/she shall have become the holder of record of such Shares.
10. CHANGE OF CONTROL
10.1 For the purposes of this section 10, "CHANGE OF CONTROL" shall mean:
10.1.1 the acquisition by any person or entity, or any persons or
entities acting jointly or in concert, whether directly or
indirectly, of voting securities of the Corporation which
together with all other voting securities of the Corporation held
by such persons or entities, constitute, in the aggregate, either
(a) fifty percent (50%) or more of the votes attached to all
outstanding voting securities of the Corporation, or (b) forty
percent (40%) or more of the votes attached to all outstanding
voting securities of the Corporation and is followed within
twenty-four (24) months by changes of the members of the Board
resulting in a change of the majority of the Board;
10.1.2 an amalgamation, arrangement or other form of business
combination of the Corporation with another entity which results
in the holders of voting securities of that other entity holding,
in the aggregate, either (a) fifty percent (50%) or more of the
votes attached to all outstanding voting securities of the entity
resulting from the business combination, or (b) forty percent
(40%) or more of the votes attached to all outstanding voting
securities of the entity resulting from the business combination
and is followed within twenty-four (24) months by changes of the
members of the Board resulting in a change of the majority of the
Board;
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10.1.3 any event or series of events (which event or series of events
may include, without limitation, a proxy fight or proxy
solicitation with respect to the election of directors of the
Corporation made in opposition to the nominees recommended by the
Continuing Directors during any period of twenty-four (24)
consecutive months) as a result of which a majority of the
members of the Board consists of individuals other than
Continuing Directors; or
10.1.4 the sale, lease or exchange of all or substantially all of the
property of the Corporation to another person or entity, other
than in the ordinary course of business of the Corporation or any
of its Subsidiaries.
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10.2 For the purposes of this section 10, "CONTINUING DIRECTORS" shall mean with
respect to any period of twenty-four (24) consecutive months, (a) any
members of the Board on the first (1st) day of such period, (b) any members
of the Board elected after the first (1st ) day of such period at any
annual meeting of shareholders who were nominated by the Board or a
committee thereof, if a majority of the members of the Board or such
committee were Continuing Directors at the time of such nomination, and
(c) any members of the Board elected to succeed Continuing Directors by the
Board or a committee thereof, if a majority of the members of the Board or
such committee were Continuing Directors at the time of such election.
10.3 Notwithstanding any provisions to the contrary contained in this Plan, the Board or the Committee shall have the power to accelerate the time at which an option may first be exercised or the time during which an option or any part thereof will become exercisable including, without limitation, prior to or in connection with a Change of Control.
11. EFFECTS OF ALTERATION OF SHARE CAPITAL
In the event of any change in the number of outstanding Shares of the Corporation by reason of any stock dividend, stock split, recapitalization, merger, consolidation, combination or exchange of Shares or other similar change, subject to the prior approval of the competent regulatory authorities, an equitable adjustment shall be made by the Board or the Committee in the maximum number or kind of Shares issuable under the Plan or subject to outstanding options and in the Subscription Price of such Shares. Such adjustment will be definitive and mandatory for the purposes of the Plan.
12. AMENDMENT AND TERMINATION
12.1 The Board or the Committee may, at any time, with the prior approval of the competent regulatory authorities, amend, suspend or terminate the Plan in whole or in part. Subject to the provisions of section 11, any material amendment (including an increase in the maximum number of Shares issuable under the Plan) or a reduction in the Subscription Price of an
option (other than for standard anti-dilution purposes) shall be approved by a majority of votes cast at a meeting of shareholders of the Corporation.
12.2 In addition to the foregoing, any material amendment to an option held by an insider (within the meaning of the Securities Act (Quebec)) (other than a person who is an insider solely by virtue of being a director or an executive officer of a Subsidiary of the Corporation) or an associate of an insider, including a change in the Subscription Price or expiry date, shall be approved by a majority of votes cast at a meeting of shareholders of the Corporation, other than votes attaching to Shares beneficially owned by the insider and the insider's associates.
12.3 For the purposes of this section 12, an amendment does not include an accelerated expiry of an option or change of the time during which an option may first be exercised or time during which an option or any part thereof will become exercisable as provided for herein.
12.4 The shareholders' approval of an amendment may be given by way of confirmation at the next meeting of shareholders after the amendment is made, provided that no Shares are issued pursuant to the amended terms prior thereto.
13. FINAL PROVISIONS
13.1 The Corporation's obligation to issue options granted or Shares under the terms of the Plan is subject to all of the applicable laws, regulations or rules of any governmental regulatory agency or other competent authority in respect of the issuance or distribution of securities and to the rules of any stock exchange on which the Shares of the Corporation are listed. Each Optionee shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.
13.2 The participation in the Plan of a director, an executive officer or an employee of the Corporation or any of its Subsidiaries, as well as any Consultant, shall be entirely optional and shall not be interpreted as conferring upon a director, an executive officer or an employee of the Corporation or any of its Subsidiaries, as well as any Consultant, any right or privilege whatsoever, except for the rights and privileges set out expressly in the Plan. Neither the Plan nor any act that is done under the terms of the Plan shall be interpreted as restricting the right of the Corporation or any of its Subsidiaries to terminate the employment of an executive officer or employee at any time, as well as any contractual relationship with any Consultant. Any notice of dismissal given to an executive officer or employee, as well as to any Consultant, at the time his/her employment is terminated, or any payment in the place and stead of such notice, or any combination of the two, shall not have the effect of extending the duration of the employment or the contractual relationship for purposes of the Plan.
13.3 No director, executive officer or employee of the Corporation or any of its Subsidiaries, as well as any Consultant, shall acquire the automatic right to be granted one or more options
under the terms of the Plan by reason of any previous grant of options under the terms of the Plan.
13.4 The Plan does not provide for any guarantee in respect of any loss or profit that may result from fluctuations in the price of the Shares.
13.5 (i) The Corporation and its Subsidiaries shall assume no responsibility
as regards the tax consequences that participation in the Plan will
have for a director, an executive officer or an employee of the
Corporation or any of its Subsidiaries, as well as any Consultant,
and such persons are urged to consult their own tax advisors in such
regard.
(ii) An Optionee may be required to pay to the Corporation or any
subsidiary and the Corporation or any Subsidiary shall have the
right and is hereby authorized to withhold from any Shares or other
property deliverable under any Option or from any compensation or
other amounts owing to an Optionee the amount (in cash or Shares) of
any required tax withholding and payroll taxes in respect of an
Option, its exercise, or any payment or transfer under an Option or
under the Plan and to take such other action as may be necessary in
the opinion of the Corporation to satisfy all obligations for the
payment of such taxes.
(iii) Without limiting the generality of clause (ii) above an Optionee may
satisfy, in whole or in part, the foregoing withholding liability
(but no more than the minimum required withholding liability) by
delivery of Shares owned by the Optionee with a fair market value
equal to such withholding liability (provided that such Shares are
not subject to any pledge or other security interest and have either
been held by the Optionee for 6 months, previously acquired by the
Optionee on the open market or meet such other requirements as the
Committee may determine necessary in order to avoid an accounting
earnings charge), or by having the Corporation withhold from the
number of Shares otherwise issuable pursuant to the exercise or
settlement of the Option a number of Shares with a fair market value
equal to such withholding liability.
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13.6 The Plan and any option granted under the terms of the Plan shall be governed and interpreted according to the laws of the province of Quebec and the laws of Canada applicable thereto.
13.8 The Plan is dated as of May 25, 2000.
SCHEDULE 1
STOCK OPTION PLAN OF
EXFO ELECTRO-OPTICAL ENGINEERING INC.
SUBSCRIPTION FORM
EXFO ELECTRO-OPTICAL ENGINEERING INC.
465 Avenue Godin
Vanier, Quebec
G1M 3G7
Attention of the Secretary
I, the undersigned, ______________________, hereby subscribe for [ ] out of the _____________ Subordinate Voting Shares of EXFO Electro-Optical Engineering Inc. (the "Corporation") to which I am entitled to subscribe pursuant to an option granted on ___________ in accordance with the terms and conditions mentioned in paragraph 7.2 of the Corporation's Stock Option Plan. I enclose herewith my certified cheque (or money order) made payable to the order of EXFO Electro-Optical Engineering Inc., in the amount of $________________ in payment of the said subscription.
EXHIBIT 10.8
SHARE PLAN
FOR HOLDERS OF CLASS "F" SHARES OF
EXFO ELECTRO-OPTICAL ENGINEERING INC.
OR OF SHARES RESULTING FROM THE
CONVERSION OF THE CLASS "F" SHARES
1. DEFINITIONS
1.1. The terms listed herein shall have the following meanings, unless the context requires otherwise
1.1.1 "Board" shall mean the Board of directors of the Corporation;
1.1.2 "Change of Control" shall mean:
a) the acquisition by any person or entity, or any persons or
entities acting jointly or in concert, whether directly or
indirectly, of voting securities of the Corporation which,
together with all other voting securities of the Corporation
held by such persons or entities, constitute, in the
aggregate, either (a) fifty percent (50%) or more of the
votes attached to all outstanding voting securities of the
Corporation, or (b) forty percent (40%) or more of the votes
attached to all outstanding voting securities of the
Corporation and is followed within twenty-four (24) months
by changes of the members of the Board resulting in a change
of the majority of the Board;
b) an amalgamation, arrangement or other form of business
combination of the Corporation with another entity which
results in the holders of voting securities of that other
entity holding, in the aggregate, either (a) fifty percent
(50%) or more of the votes attached to all outstanding
voting securities of the entity resulting from the business
combination, or (b) forty percent (40%) or more of the votes
attached to all outstanding voting securities of the entity
resulting from the business combination and is followed
within twenty-four (24) months by changes of the members of
the Board resulting in a change of the majority of the
Board;
c) any event or series of events (which event or series of
events may include, without limitation, a proxy fight or
proxy solicitation with respect to the election of directors
of the Corporation made in opposition to the nominees
recommended by the Continuing Directors during any period of
twenty-four (24) consecutive months) as a result of which a
majority of the members of the Board consists of individuals
other than Continuing Directors; or
1
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d) the sale, lease or exchange of all or substantially all of
the property of the Corporation to another person or entity,
other than in the ordinary course of business of the
Corporation or any of its Subsidiaries.
1.1.3 "Continuing Directors" shall mean with respect to any period of
twenty-four (24) consecutive months, (a) any members of the Board
on the first (1st) day of such period, (b) any members of the
Board elected after the first (1st) day of such period at any
annual meeting of shareholders who were nominated by the Board or
a committee thereof, if a majority of the members of the Board or
such committee were Continuing Directors at the time of such
nomination, and (c) any members of the Board elected to succeed
Continuing Directors by the Board or a committee thereof, if a
majority of the members of the Board or such committee were
Continuing Directors at the time of such election;
1.1.4 "Corporation" shall mean EXFO Electro-Optical Engineering Inc.;
1.1.5 "Plan" shall mean the Share Plan of the Corporation as embodied
herein;
1.1.6 "Shareholder" or "Shareholders" shall mean, unless otherwise
stipulated, one or more holders of Shares;
1.1.7 "Shares" shall mean (i) the class "F" shares of the Corporation
issued pursuant to the Stock Purchase Plan for Officers,
Directors and Key Employees of EXFO Electro-Optical Engineering
Inc. adopted by the Corporation on September 19, 1998 (the
"SPP"), or (ii) the class "F" shares of the Corporation issued by
the Board outside the purview of the SPP, if any, or, as the case
may be, (iii) the Subordinate Voting Shares of the Corporation
resulting from the conversion of the shares issued pursuant to
(i) or (ii), which shall be listed on a recognized stock
exchange;
1.1.8 "Subsidiaries" shall mean (i) any legal entity of which the
Corporation is the holder or the beneficiary, directly or
indirectly, otherwise than by way of security only, of securities
to which are attached over 50% of the vote enabling it to elect
the majority of the directors of such entity as well as any
subsidiaries of such legal entity and (ii) any legal entity in
which the Corporation or a subsidiary of the Corporation holds at
least 50% of the voting rights or in which it has a majority
interest and of which the Corporation or a subsidiary of the
Corporation manages the operations.
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2. PURPOSE OF THE PLAN
2.1 The Plan is designed to establish restrictions on the rights of the Shareholders and the terms and conditions governing the holding of the Shares further to the closing of the initial public offering of the Corporation on the Canadian and United States markets.
2.2 Subject to the prior approval of the competent regulatory authorities, the Board shall be entitled to amend or modify, in whole or in part, any or all of the provisions of the Plan. However, any amendment or modification affecting retroactively and prejudicially the rights of the Shareholders shall be approved by 66 2/3% of the votes cast at a meeting of Shareholders.
3. DEPOSIT OF SHARES IN TRUST
3.1 The Shareholders hereby deposit with CIBC Mellon Trust Company (the "Trustee"), to be held in trust under and subject to this Plan, the Shares held by each of them.
3.2 The Corporation and each Shareholder hereby direct the Trustee to retain the Shares in trust until the Shares are released pursuant to the terms of this Plan.
3.3 The deposit of the Shares in trust will not impair any right of a Shareholder to exercise voting rights attaching to the Shares.
3.4 The deposit of the Shares in trust will not impair any right of a Shareholder to receive a dividend or other distribution on the Shares or to elect the form or manner in which a dividend or other distribution on the Shares will be paid. If, during the period in which the Shares are retained in trust pursuant to this Plan, any dividend or other distribution, other than one paid in Shares of the Corporation, is received by the Trustee in respect of the Shares held in trust, such dividend or other distribution will be paid or transferred forthwith to the respective Shareholder entitled thereto. Additional Shares distributed on the Shares will, if received by the Trustee, be retained in trust and, if received by the Shareholder, be deposited in trust in accordance with section 2, to be held in and released from the trust on the same terms and conditions as applied to the Shares on which the distribution was paid.
3.5 Subject to Article 9, the deposit of the Shares in trust will not impair any right of a Shareholder to exercise a right attaching to the Shares that entitles the Shareholder to purchase or otherwise acquire another security or to exchange or convert Shares for or into another security.
4. PERMITTED TRANSFERS
4.1 The Shares may be transferred within the trust by a Shareholder to a Registered Retirement Savings Plan ("RRSP") or Registered Retirement Income Fund ("RRIF"), or subsequently between RRSPs or from an RRSP to an RRIF, provided that the Trustee first receives:
4.1.1 evidence from the trustee of the RRSP or RRIF, as applicable,
stating that, to the best of trustee's knowledge, the Shareholder
is, during the Shareholder's lifetime, the sole beneficiary of
the RRSP or RRIF;
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4.1.2 a transfer power of attorney, duly executed by the transferor and
giving full power and authority to the trustee of the RRSP or
RRIF to act in accordance herewith; and
4.1.3 an acknowledgement signed by the trustee of the RRSP or RRIF
confirming that it agrees to be bound by the terms and conditions
hereof.
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4.2 In the event of the bankruptcy of a Shareholder, the Shares of such Shareholder may be transferred within the trust to the trustee in bankruptcy, provided that the Trustee first receives:
4.2.1 a certified copy of either:
a) the assignment in bankruptcy of the Shareholder filed with the superintendent of bankruptcy; or
b) the receiving order adjudging the Shareholder bankrupt;
4.2.2 a certified copy of a certificate of appointment of the trustee
in Bankruptcy;
4.2.3 a transfer power of attorney, duly executed by the transferor and
giving full power and authority to the trustee in bankruptcy to
act in accordance herewith; and
4.2.4 an acknowledgment signed by the trustee in bankruptcy or other
person (or company) legally entitled to the Shares or an amended
agreement reflecting the transfer.
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4.3 Upon completion of a transfer of Shares pursuant to this section 4, the transferee will be a Shareholder and the Shares transferred will remain in trust, to be held in and released from the trust on the same terms and conditions as were applicable prior to the transfer.
4.4 Without limiting the generality of the foregoing, the provisions of Articles 6, 7 and 8 shall apply mutatis mutandis to a Shareholder that is the trustee of a RRSP or a RRIF when any of the events set forth in those Articles affect the beneficiary of such RRSP or RRIF.
5. RELEASE OF THE SHARES
5.1. Subject to Articles 6, 7 and 8, the Shares shall be released from the trust under this Plan on August 31, 2004 (the "Release Date").
5.2 As soon as reasonably practicable after the Release Date, the Trustee will deliver, to or at the direction of the Shareholder, certificates evidencing the Shares released from the trust.
5.3 The Trustee shall have no further responsibility for the Shares held in trust for a Shareholder after it has delivered the Shares to or at the direction of such Shareholder in accordance with the terms of this Plan.
5.4 Notwithstanding any provisions to the contrary contained herein, the Trustee shall not be entitled to release the Shares from the trust and to deliver the Shares to or at the direction of a Shareholder if such shares are also held in trust by the Trustee pursuant to any other agreement among the Shareholder and the Corporation.
5.5 Notwithstanding any provisions to the contrary contained herein, the Board shall have the power to accelerate the Release Date of the Shares in the event the employment of a Shareholder with the Corporation or one of its Subsidiaries is terminated for any reason whatsoever other than those set forth in Article 8 hereof.
6. RELEASE UPON DEATH
6.1 Upon receipt by the Trustee of written notice from the Corporation of the death of a Shareholder, the Shares will be released from the trust and the Trustee will deliver certificates evidencing such Shares to the legal representative of the deceased Shareholder, provided that the Trustee first receives:
6.1.1 a certified copy of the death certificate; and
6.1.2 such evidence of the legal representative status that the Trustee
may reasonably require.
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7. RELEASE UPON DISABILITY
7.1 Upon receipt by the Trustee of written notice from the Corporation of the establishment of the permanent disability of a Shareholder, the Shares will be released from the trust and the Trustee will deliver certificates evidencing such Shares to the legal representative of the disabled Shareholder, provided that the Trustee first receives:
7.1.1 a medical report establishing the disability of the Shareholder.
For the purposes of this Plan, a permanent disability, whether
total or partial, is a disability preventing a Shareholder from
carrying out his functions within the Corporation for a minimum
6 month period; and
7.1.2 such evidence of the legal representative status that the Trustee
may reasonably require.
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8. COMPULSORY SALE
8.1 Upon receipt by the Trustee of written notice from the Corporation of the occurrence of one of the following events prior to the Release Date, instructions are hereby irrevocably given to the Trustee by the Shareholder concerned by such event (the "Concerned Shareholder") and the Corporation, to sell the Shares (the "Offered Shares") held in trust by the Trustee for such Concerned Shareholder on the public market in accordance with the terms hereof:
8.1.1 misappropriation of funds, theft, or fraud by a
Shareholder against the Corporation or one of its
Subsidiaries or any termination of employment with the
Corporation or one of its Subsidiaries for cause,
including but not limited to refusal or systematic
negligence by a Shareholder to fulfil the functions he
undertook to fulfil for the Corporation or one of its
Subsidiaries and which is not cured within five (5)
days following receipt of a written notice from the
Corporation to that effect;
8.1.2 violation of any non-competition covenant of a
Shareholder towards the Corporation or one of its
Subsidiaries;
8.1.3 concurrent holding of another position by a Shareholder
who is a full-time employee of the Corporation or one
of its Subsidiaries;
8.1.4 failure by a Shareholder to comply with the provisions
of this Plan within five (5) days following receipt of
a written notice from the Corporation to that effect;
8.1.5 seizure or forced transfer of ownership of Shares held
by a Shareholder in favor of a third party;
8.1.6 resignation or voluntary departure from the Corporation
or one of its Subsidiaries by a Shareholder.
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8.2 The sale of the Offered Shares on the public market shall take place 10 days after receipt by the Trustee of a notice from the Corporation indicating the occurrence of one of the events mentioned in section 8.1, with evidence of delivery of such notice to the Concerned Shareholder.
8.3 Within 30 days following the sale of the Offered Shares pursuant to the provisions of section 8.1, the Trustee shall distribute the net proceeds of the sale of the Offered Shares as follows:
8.3.1 if the sale of the Offered Shares results from the
occurrence of one of the events set forth in
subsections 8.1.1 to 8.1.5,
a) the Trustee shall pay to the Concerned Shareholder
a sum equal to the lesser of (i) the price (the
"Subscription Price") paid by the Concerned
Shareholder for the Offered Shares at the time of
their subscription, and (ii) the net proceeds of
the sale of the Offered Shares; and
b) the Trustee shall pay the balance to the
Corporation, if any;
8.3.2 if the sale of the Offered Shares results from the
occurrence of the event set forth in subsection 8.1.6,
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a) the Trustee shall pay to the Concerned Shareholder a sum
equal to the lesser of (i) the Subscription Price to which
is added a premium of 8% per year since August 31st, 1999
regardless of the date of subscription of such Shares, and
(ii) the net proceeds of the sale of the Offered Shares;
b) the Trustee shall pay the balance to the Corporation, if any.
9. TAKEOVER BID
9.1 A Shareholder who wishes to tender certain of its Shares (the "Tendered Shares") to a bona fide formal takeover bid, plan of arrangement, amalgamation, merger or similar transaction (a "Transaction") will deliver to the Corporation which shall deliver to the Trustee:
9.1.1 a written direction signed by the Shareholder (a "Direction")
that directs the Trustee to deliver to a specified person
(or company) (the "Depositary") either:
(a) certificates evidencing the Tendered Shares, or
(b) where the Shareholder has provided the Trustee with a notice
of guaranteed delivery or similar notice of the
Shareholder's intent to tender the Tendered Shares to the
Transaction, that notice,
together with a letter of transmittal or similar document and,
where required, transfer power of attorney duly executed for
transfer, and any other documentation specified or provided by
the Shareholder and required to be delivered to the Depositary
under the terms of the Transaction; and
9.1.2 such other information concerning or evidence of the transaction
as the Trustee may reasonably require.
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9.2 Subject to section 9.1, forthwith after its receipt of the information and documentation specified in subsection 9.1, the Trustee will deliver to the Depositary, in accordance with the Direction, documentation specified or provided under subsection 9.1 (a), together with the Trustee's standard documentation addressed to the Depositary that:
9.2.1 identifies the Tendered Shares;
9.2.2 states that the Tendered Shares are held in trust;
9.2.3 states that the Tendered Shares are delivered only for the
purposes of the Transaction and that they will be released from
the trust only upon receipt by the Trustee of the information
described in section 9.3;
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9.2.4 where certificates for the Shares have been delivered to the
Depositary, requires the Depositary to return to the Trustee, as
soon as practicable, the certificates evidencing the Shares that
are not releasable from the trust as described in clause (9.2.3)
above; and
9.2.5 where applicable, requires the Depositary to deliver or cause to
be delivered to the Trustee, as soon as practicable, certificates
representing securities acquired by the Shareholder under the
Transaction in exchange, substitution or consideration for the
Tendered Shares.
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9.3 Subject to section 9.1, the Tendered Shares will be released from the trust upon receipt by the Trustee of the Depositary's standard documentation in respect of the Transaction indicating that:
9.3.1 the terms and conditions of the Transaction have been met; and
9.3.2 the Tendered Shares have either been taken up and paid for or are
subject to an unconditional obligation to be taken up and paid
for under the Transaction.
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9.4 Subject to Section 9.1, the Trustee will hold any additional securities acquired by a Shareholder under the Transaction in trust on the same terms and conditions, including Release Date, as applied to the Shares for which they were exchanged, substituted or constituted consideration.
9.5 Notwithstanding any provisions to the contrary contained herein, the Shares shall be released forthwith from the trust upon the occurrence of a Change of Control and, as soon as reasonably practicable, the Trustee will deliver, to or at the direction of the Shareholder, certificates evidencing the Shares released from the trust.
10. REMUNERATION OF TRUSTEE
The Corporation shall pay the Trustee reasonable remuneration for, and reimburse the Trustee for its expenses and disbursements in connection with, its services under this Plan.
11. INDEMNIFICATION OF TRUSTEE
The Shareholders and the Corporation agree, jointly but not severally, to indemnify and save harmless the Trustee from and against all claims, liabilities, losses, penalties, actions, suits, costs, expenses and disbursements (including the fees and expenses of legal and other advisers) made against it by anyone, in the absence of gross negligence or fraud by the Trustee, its officers, directors and employees, by reason of Trustee's compliance in good faith with the terms hereof.
12. RESPONSIBILITY OF TRUSTEE
12.1 The Trustee will bear no responsibility for seeking, obtaining, compiling, preparing or determining the accuracy of any information or document, the Trustee's receipt of which is a condition to a release from the trust or a transfer within the trust under this Plan.
12.2 The Trustee may retain legal counsels and advisors as may be reasonably required for the purpose of discharging its duties or determining its rights under this Plan, and may rely and act upon advice of such counsels or advisors. The Corporation shall pay or reimburse the Trustee for any reasonable fees, expenses and disbursements of such counsels or advisors.
12.3 The Trustee shall be protected in acting and relying reasonably upon any written notice, direction, instruction, order, certificate, confirmation, request, waiver, consent, receipt statutory declaration or other paper or document (collectively referred to as "Documents") furnished to it and signed by any person required to or entitled to execute and deliver to the Trustee any such Documents in connection with this Plan, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and accuracy of any information therein contained, which the Trustee in good faith believes to be genuine.
13. RESIGNATION OF TRUSTEE
The resignation of the Trustee will be effective and the Trustee will cease to be bound by this Plan on the date that is 60 days after the date of receipt by the Corporation of a notice of the Trustee's intent to resign, or, as the case may be, on such other date as the Trustee and the Corporation may agree upon (the "Resignation Date"), provided that the Resignation Date will not be a date that is less than 10 days before the Release Date. The Corporation will, before the Resignation Date, appoint another Trustee, which appointment will be binding on the Corporation and the Shareholders. If the Corporation fails to appoint another Trustee within the 60-day period set forth above, the Trustee will be entitled to deliver the Shares held in trust pursuant to this Plan to the Corporation which shall act according to the provisions of the Plan and appoint another Trustee forthwith.
14. ASSIGNMENT OF SHARES
14.1 A Shareholder shall not, without the prior written consent of the Corporation, hypothecate, mortgage, pledge, encumber, or otherwise assign as security any portion of the Shares held in trust by the Trustee.
14.2 Notwithstanding the provisions of Section 14.1, a Shareholder shall be entitled to hypothecate, mortgage, pledge and encumber, or otherwise assign as security any portion of the Shares held in trust by the Trustee, in favour of the Corporation and as a guarantee
for the reimbursement of any loan by the Corporation to such Shareholder for the acquisition of Shares.
15. CONVERSION OF SHARES
The provisions of the Plan shall apply mutatis mutandis to any shares or securities into which the Shares may be converted, changed, reclassified, redivided, redesignated, subdivided or consolidated, to any shares or securities that may be subscribed for by a Shareholder as a stock dividend or similar distribution payable in shares or securities of the Corporation and to any shares or securities of the Corporation or of any successor or continuing company or corporation to the Corporation that may be received by a Shareholder or the Trustee as the registered holder of the Shares on a reorganization, amalgamation, consolidation or merger, statutory or otherwise. All such shares or securities to which the Plan applies mutatis mutandis shall be deposited in trust according to the provisions hereof.
16. NOTICES
16.1 Notice to the Trustee:
Documents will be considered to have been delivered to the Trustee on the next business day following the date of transmission, if delivered by fax, the date of physical delivery, if delivered by hand or by prepaid courier, or 5 days after the date of mailing, if delivered by mail, to the following:
CIBC Mellon Trust Company
2001 University Street
16th Floor
Montreal, Quebec
H3A 2A6
Attention: Corporate Trust Department Fax: 514-285-3640
16.2 Notice to the Corporation:
Documents will be considered to have been delivered to the Corporation on the next business day following the date of transmission, if delivered by fax, the date of physical delivery, if delivered by hand or by prepaid courier, or 5 days after the date of mailing, if delivered by mail, to the following:
EXFO Electro-Optical Engineering inc.
465 Godin Avenue
Vanier, Quebec
G1M 3G7
Attention: The Vice President, Finance Fax: 418-683-2170
16.3 Deliveries to Shareholders:
Documents will be considered to have been delivered to a Shareholder on the next business day following the date of transmission, if delivered by fax, the date of physical delivery, if delivered by hand or by prepaid courier, of 5 days after the date of mailing, if delivered by mail, to the last address of the Shareholder entered in the Corporation's records. The Trustee will, unless a Shareholder directs the Trustee in writing otherwise, deliver all certificates representing the Shares of the Shareholder that have been released from the trust to the last address of the Shareholder entered in the Corporation's records.
16.4 Change of Address
A change in an address for delivery of the Trustee or the Corporation under this section 16 will be effective upon delivery to each other party hereof of a written notice of such change. A change in an address for delivery of a Shareholder under this section 16 will be effective upon delivery to the Trustee and the Corporation of a written notice of such change.
16.5 Postal Disruption
A party will not effect a delivery by mail if the party is aware of an actual or impending disruption of postal service.
17. DIVISIBILITY OF THE PLAN
Each section of this document is a whole. If a court of law should find that one section is null and unenforceable, the remaining sections shall remain valid and enforceable.
18. TITLES
Titles of paragraphs are inserted for reference purposes only and do not affect the structure or the interpretation of the provisions of the Plan.
19. JURISDICTION
The Plan shall be interpreted and governed by the laws applicable in the Province of Quebec.
20. EFFECTIVE DATE
This Plan is dated as of April 3, 2000.
EXHIBIT 10.9
SUMMARY IN ENGLISH
Loan agreement dated as of May 11, 1993, between GEXFO Investissements Technologiques inc. ("GEXFO") and EXFO Electro-Optical Engineering Inc. ("EXFO").
BORROWER: EXFO
LENDER: GEXFO
AMOUNT OF THE LOAN: C$2 million
INTEREST: Prime rate of Caisse Populaire Desjardins de
St-Sacrement plus 1% from February 18, 1993.
GUARANTEE: As a guarantee for the reimbursement of the loan, the
interest thereon and any other amount due to the
Lender, the borrower assigns, transfers and pledges in
favour of the Lender a debenture of a nominal amount of
C$2 million, bearing interest at a rate of 20% per
year.
REIMBURSEMENT: Upon demand. However, the Lender will not require the
reimbursement of the loan unless the occurrence of an
event of default pursuant to the agreement or any other
agreement pursuant to which the debenture is assigned,
transferred or pledged in favour of the Lender.
FEES: The borrower shall pay the legal fees incurred by the
Lender in connection with the agreement.
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TRUST DEED DATED AS OF MAY 11, 1993 BETWEEN EXFO ELECTRO-OPTICAL ENGINEERING INC. ("EXFO") AND MR. RICHARD OUELLET (THE "TRUSTEE").
TRUSTEE: Richard Ouellet
CORPORATION: EXFO
DEBENTURE: The debenture that may be issued and guaranteed by
Trust Deed are limited to a principal amount of
C$2 million. The debentures are payable on demand and
bear interest from the date of their issuance until
final repayment at a rate of 20% per year, such
interest being payable on demand.
GUARANTEE: As a guarantee for the reimbursement of the debentures,
in principal, interest and fees, the Corporation
assigns, transfers and pledges in favour of the Trustee
for the benefit of the holders of such debentures,
for a
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principal amount C$2 million bearing interest at a rate
of 20% per year and an additional amount of C$400,000,
the universality of its personal and real estates
present and future, whereever located.
COVENANT OF THE
CORPORATION: - Maintain its corporate existence;
- Act according to the laws governing the
Corporation;
- No merger, amalgamation, sale of all or
substantially all its business without the prior
consent of the holders of the debentures;
- Carry on its business;
- Pay all taxes due;
- Respect its obligations and pay any amount due
under any agreements or statutes;
- Maintain in force the guarantees granted pursuant
to the Trust Deed;
- Maintain the secured properties insured;
- Pay to the Trustee its reasonable fees and
reimbursed the expenses incurred by the Trustee;
- Maintain in force and renew the leases and
licenses pledged pursuant to the Trust Deed.
EVENT OF DEFAULT: - Default to pay upon demand the principal of the
debentures or the interest thereon;
- Default to maintain insurance coverage;
- Default to pay taxes due;
- Default to pay any amount due to the Trustee;
- Assignment of the secured properties, in whole or
in part;
- Bankruptcy or insolvability;
- Seizure of its properties;
- Failure to comply to any provisions of the Trust
Deed, any agreement or statute and that such
default adversely affect the secured properties.
ENFORCEMENT: Upon the occurrence of an event of default, the
Trustee, if required by the holders of the debentures,
may require the reimbursement of the debentures, in
principal, interest and fees; take possession of the
charged properties; or sell or assign the secured
properties;
TERMINATION: A) When the debentures are remittent to the Trustee
for cancellation and that the Trustee has received
payment of any amount due pursuant to the Trust
Deed; or
B) When the Trustee has obtain from EXFO guarantees
that he deems appropriate to assure the payment
of the debentures.
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[SEAL]
L'AN MIL NEUF CENT QUATRE-VINGT-TREIZE le onze mai.
DEVANT Me GASTON LACOURSIERE, notaire pour la Province de Quebec,
exercant a Quebec.
COMPARAISSENT :
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., corporation legalement
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constituee en vertu de la Loi du Quebec sur les compagnies, ayant son siege social au 465, rue Godin, ville de Vanier, Province de Quebec, G1M 3G7, ici representee par son president, Monsieur GERMAIN LAMONDE et son secretaire, Monsieur ROBERT TREMBLAY, dument autorises tel qu'ils le declarent ;
Ci-apres nommee : "LE PRETEUR"
ET
INGENIERIE ELECTRO-OPTIQUE EXFO INC., societe commerciale canadienne legalement constituee en vertu de la Loi sur les societes commerciales canadiennes, ayant son siege social au 465, rue Godin, ville de Vanier, Province de Quebec, G1M 3G7, ici representee par Monsieur Germain Lamonde, son president et par Monsieur ROBERT TREMBLAY, son secretaire, dument autorises aux fins des presentes en vertu d'une resolution du conseil d'administration dont copie certifiee demeure annexee aux presentes suivant la Loi du Notariat ;
Ci-apres nommee "L'EMPRUNTEUR"
LESQUELS ONT CONVENU DE CE QUI SUIT :
PRET
1. L'Emprunteur reconnait devoir au Preteur la somme de DEUX MILLIONS DE DOLLARS (2 000 000.00 $) en monnaie courante du Canada.
INTERET
2.1 Toutes les sommes avancees par le Preteur a l'Emprunteur sous l'autorite des presentes, de meme que tout solde d'icelle non rembourse, porteront, en tout temps, interet, avant comme apres echeance, et avant comme apres defaut de paiement, a un taux egal au taux preferentiel de la Caisse Populaire Desjardins de St-Sacrement augmente de UN POUR CENT (1%) l'an, depuis le dix-huit fevrier mil neuf cent quatre-vingt-treize (1993).
ANATOCISME
3. Tous interets non payes a echeance sur toutes les sommes qui pourraient devenir dues aux termes du present acte de pret porteront eux-memes interet au taux alors applicable depuis la date de leurs echeances respectives jusqu'a la date de leurs paiements.
REMBOURSEMENT DU CAPITAL
4. L'Emprunteur remboursera le principal du present pret sur demande du Preteur.
LIEU ET MODE DE PAIEMENT
5. Toutes sommes payables au Preteur en vertu des presentes seront payees en monnaie legale du Canada, a leur siege social respectif dans la Province de Quebec ou a tout autre endroit dans ladite province que le Preteur pourra indiquer a l'Emprunteur quant au lieu ou il desire recevoir ses paiements.
NANTISSEMENT D'UNE OBLIGATION
6. Comme garantie generale et continue du paiement au Preteur
du principal, des interets lui revenant et de toutes autres sommes
qui peuvent lui etre dues aux termes des presentes ou qu'il aura
avancees pour proteger ses droits et de l'accomplissement par
l'Emprunteur de toutes et chacune de ses obligations, l'Emprunteur
cede, transporte, transfere, nantit et met en gage au Preteur
une Obligation d'une valeur nominale de DEUX MILLIONS DE DOLLARS
(2 000 000.00$), portant interet au taux de VINGT pour cent (20%)
l'an, portant la date officielle du quinzieme jour d'avril mil neuf
cent quatre-vingt-treize (15 avril 1993) et signee en faveur de
RICHARD OUELLET comme fiduciaire, le onze mai 1993 -------------------
en presence de Me Gaston Lacoursiere, notaire, sous le numero 18340
de ses minutes.
Jusqu'a ce que toutes sommes dues ou a devenir dues aux termes des presentes aient ete completement remboursees, l'Obligation ne pourra etre rachetee, acquittee, remboursee ou autrement rappelee ou retiree sans le consentement prealable du Preteur.
LE PRETEUR CONSIDERE COMME PROPRIETAIRE DE L'OBLIGATION
7. Nonobstant le fait que la cession, le transport, le transfert, le nantissement et la mise en gage susdits de l'Obligation aient ete consentis par l'Emprunteur en guise de garantie constituent une telle garantie, le Preteur, qu'il y
ait eu ou non un cas de defaut ou qu'il y ait effectivement eu ou non un cas de defaut aux termes des presentes, sera cense etre et sera considere comme le proprietaire de l'Obligation, a toutes les fins prevues au susdit acte de fiducie.
Le Preteur possedera et aura droit d'exercer tous les droits, remedes, pouvoirs, privileges, garanties et recours accordes a un detenteur d'Obligation aux termes du susdit acte de fiducie de la meme maniere et dans la meme mesure que si le Preteur etait proprietaire absolu de l'Obligation.
Le fiduciaire, en vertu dudit acte de fiducie, agira suivant les instructions et les directives du Preteur en sa qualite de detenteur de l'Obligation.
PAIEMENT DES FRAIS
8. L'Emprunteur sera tenu d'acquitter tous les frais notariaux et legaux, comprenant honoraires et debourses, occasionnes par la preparation, la signature et la realisation du present contrat. Paiement de tous ces honoraires et debourses devra etre fait immediatement par l'Emprunteur sur demande du Preteur. Le Preteur pourra toutefois prelever sur le principal du present pret, en paiement desdits honoraires et debourses, une somme egale a leur montant global et la somme ainsi utilisee par le Preteur constituera en vertu des presentes et a la date de tel paiement, une avance d'une partie de la somme principale.
REMBOURSEMENT DES DEPENSES DU PRETEUR
9. Le Preteur pourra, a son gre et de temps a autre, acquitter en tout ou en partie, les creances hypothecaires, privileges, liens, soldes impayes, contributions foncieres, taxes, primes d'assurance, loyers ou salaires de tout genre qui affectent ou pourront affecter l'un ou l'autre des biens meubles ou immeubles qui sont assujettis a la garantie de ce pret, y compris ceux qui le sont par le biais de l'acte de fiducie susdit. Toute somme ainsi payee par le Preteur, ainsi que toute somme que l'Emprunteur ou tout intervenant aux presentes est oblige de payer en vertu des termes du present contrat ou de tout acte accessoire, mai qui a ete payee par le Preteur (et le Preteur aura droit, a sa discretion, en tout temps et de temps a autre, de faire tel paiement) deviendra immediatement remboursable par l'Emprunteur au Preteur, avec interet payable au taux ci-dessus mentionne a l'alinea 2.1 des presentes et calcule a compter de la date du susdit paiement par le Preteur jusqu'a la date du remboursement a ce dernier. Ce paiement par Preteur
s'ajoutera au montant de la dette garantie aux termes du present contrat et il beneficiera ainsi de la garantie creee ou prevue par le present contrat.
LA RECLAMATION NE SERA FAITE QU'EN CAS DE DEFAUT
10. Le Preteur n'en exigera pas paiement a moins qu'un cas de defaut ne se presente ou jusqu'a ce que le Preteur ait droit d'exiger paiement de l'Obligation en vertu de toute autre convention presente ou future par laquelle l'Obligation est transferee, transportee, nantie, gagee ou cedee au Preteur.
RESTRICTION DE LA RECLAMATION RELATIVE A L'OBLIGATION
11. Advenant un cas de defaut, le Preteur, en realisant l'Obligation ou la garantie y afferente, ne reclamera pas, en vertu de l'Obligation, un montant dont le principal et les interets pris collectivement seraient superieurs a l'ensemble de toutes les sommes qui lui seront alors dues aux termes du present acte et en vertu de toutes autres conventions presentes ou futures par lesquelles l'Obligation est ou doit etre transferee, transportee, cedee nantie ou gagee au Preteur.
Pourvu que, si le Preteur, apres l'avenement d'un cas de defaut, conserve l'Obligation a titre de proprietaire absolu, le Preteur, en realisant l'Obligation ou la garantie y afferente, ait le droit de reclamer en vertu de l'Obligation le montant global de toutes les sommes quelconques qui pourraient lui etre dues immediatement avant telle retention, aux termes du present acte et de toutes autres conventions qui existaient immediatement avant la susdite retention et par laquelle l'Obligation est ou doit etre transferee, transportee, cedee nantie ou gagee au Preteur.
AVIS A L'EMPRUNTEUR
12. Tout avis du Preteur a l'Emprunteur sans que cela n'empeche le Preteur d'adopter une autre forme de donner avis, sera cense avoir ete donne de fait a l'Emprunteur lorsqu'il aura ete envoye par la poste, sous pli recommande, et adresse comme suit :
A l'Emprunteur : 465, rue Godin,
Ville de Vanier (Quebec)
G1M 3G7
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ou, si le Preteur a recu de l'Emprunteur les renseignements relatifs a une nouvelle adresse ou l'Emprunteur desire que cet avis lui soit envoye,
alors quand il lui sera envoye, par la poste, sous pli recommande, a ladite nouvelle adresse.
LES DOSSIERS DU PRETEUR FONT PREUVE DU DEFAUT
13. Les dossiers du Preteur, pour etablir l'avenement de tous cas de defaut ou le fait de toute demande par le Preteur seront censes constituer une preuve definitive et concluante de l'un ou l'autre de ces faits, sans qu'aucune autre preuve ne soit requise.
EXAMEN DES DOSSIERS
14. Les verificateurs, les comptables, ou tous autres representants du Preteur peuvent, lorsque ce dernier le juge necessaire, penetrer, de temps a autre, dans les locaux de l'Emprunteur et des corporations intervenantes, s'il y a lieu, et y faire l'examen de leurs livres comptables, en rediger des extraits et, en general, poursuivre l'examen des livres, dossiers et affaires de chacun d'eux en vue d'en dresser un rapport a l'intention du Preteur, de la facon qui lui semblera appropriee et a sa discretion.
LES REMEDES DU PRETEUR SONT CUMULATIFS
15.1 Le fait que le Preteur ait accepte, apres l'avenement d'un cas de defaut, paiement d'une somme quelconque qui lui est due aux termes des presentes, ou qu'il ait exerce tout droit, recours ou remede stipule aux presentes, ne l'empechera pas d'exercer tout autre droit, recours ou remede, car il est expressement entendu que tous les droits, recours et remedes aux termes du present acte de pret ou de tout autre acte ou document seront cumulatifs et non alernatifs.
15.2 Sans restreindre la portee generale de ce qui precede, en cas de defaut, le Preteur aura le droit, en outre de tous ses autres recours d'intenter une action en recouvrement du montant global de toutes les sommes alors dues aux termes du present acte en principal, interets et accessoires.
REPRESENTANTS
16. Toutes les obligations du present acte avantageront et engageront les successeurs et les cessionnaires de l'Emprunteur et du Preteur respectivement.
DEFAUT RECIPROQUE
17. Tout defaut a toute condition ou obligation du present pret constituera un defaut a tout financement, present ou futur, consenti par le Preteur a l'Emprunteur ou a toute compagnie associee.
DONT ACTE a Sainte-Foy, sous le numero DIX-HUIT MILLE TROIS CENT QUARANTE ET UN (18341) des minutes du noraire soussigne.
LECTURE FAITE, les parties, representees tel que susdit, signent avec et en presence du notaire soussigne.
GEXFO INVESTISSEMENTS
TECHNOLOGIQUES INC.
Par: ______________________________
Par: ______________________________
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par: ______________________________
Par: ______________________________
Vraie Copie.
RESOLUTION
DE
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
EXTRAIT du proces-verbal d'une assemblee du conseil d'administration de la compagnie "INGENIERIE ELECTRO-OPTIQUE EXFO INC.", tenue a son siege social le 11 mai 1993 -------------- et a laquelle il y avait quorum :
"Sous l'autorite du reglement special d'emprunt de la compagnie adopte le 11 mai 1993 -------------------- par ses administrateurs et dument ratifie, sanctionne et confirme par le vote unanime des actionnaires de la compagnie, tous presents a une assemblee generale speciale tenue a cette fin le meme jour.
Sur motion dument propose et apuyee, il est unanimememt resolu que :
1. - La compagnie emprunte de GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC. la somme de DEUX MILLIONS DE DOLLARS (2 000 000.00$) etant remboursable sur demande du Preteur.
2. - Toutes les sommes avancees par ledit preteur a cette compagnie de meme que tout solde du sur ces sommes empruntees non rembourse portent en tout temps interet, avant comme apres l'echeance et avant comme apres defaut de paiement au taux preferentiel de la Caisse Populaire Desjardins de St-Sacrement plus UN POUR CENT (1%) l'an.
3. - Qu'a la garantie du remboursement de ce pret et de l'accomplissement de ses obligations en rapport avec ce pret, la compagnie cede, transporte, transfere, nantisse et gage en faveur dudit preteur l'obligation de cette compagnie au montant de DEUX MILLIONS DE DOLLARS (2 000 000.00$) comme montant principal portant interet au taux de VINGT pour cent (20%) l'an qui sera emise en vertu d'un acte de fiducie, d'hypotheque, de nantissement et de gage portant la date officielle du quinzieme jour d'avril mil neuf cent quatre-vingt-treize (15 avril 1993) et signe par cette compagnie en faveur de RICHARD OUELLET comme fiduciaire.
4. - Que le projet d'acte de pret qui doit etre signe par cette compagnie en faveur de GEXFO INVESTISSEMENTS TECHNOLOGIES INC. pour constater et garantir le pret susdit ainsi que tous les termes et conditions y afferents, ledit projet d'acte ayant ete soumis a la consideration de cette
assemblee, soit et il est dument approuve par les presentes.
5. - Que le president et le secretaire de cette compagnie soient et ils sont par les presentes autorises a signer pour et au nom de cette compagnie un acte de convention de pret redige suivant ou substantiellement selon la forme et les termes du susdit projet avec tous amendements ou changements qu'ils jugeront a propos d'y apporter (leur approbation etant etablie d'une maniere concluante par leur signature audit acte) ainsi que tous les autres actes, documents, instruments, ecrits, le cas echeant, ancillaires ou pour donner effet aux presentes et a faire tout ce qu'ils jugeront necessaire, opportun ou utile pour obtenir le pret susdit et observer les termes et accomplir les obligations prises par cette compagnie en vertu dudit acte de convention de pret.
6. - Que tous les actes, instruments, documents, ecrits, faits ou procedures se rapportant au pret susdit ou a l'acte susdit de convention de pret qui auraient pu avoir ete executes, faits, conclus ou passes au nom de cette compagnie par son president et son secretaire soient et ils sont par les presentes approuves, ratifies et confirmes."
**********************************
Je, soussigne, secretaire de "INGENIERIE ELECTRO-OPTIQUE EXFO INC." certifie par les presentes que ce qui precede est une copie conforme d'une resolution adoptee par le conseil d'administration de cette compagnie a une assemblee tenue le 11 mai 1993 et a laquelle il y avait quorum. Je certifie en outre que ladite resolution est toujours en vigueur.
EN FOI DE QUOI, j'ai signe a Quebec, ce onzieme jour du mois de mai mil neuf cent quatre-vingt-treize (1993).
DOCUMENT RECONNU VERITABLE ET ANNEXE A LA MINUTE 1834T DU NOTAIRE
SOUSSIGNEE.
Signature
Signature
Signature
Signature
Vraie Copie.
NO 18341
11 mai 1993
Convention de Pret
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
ET
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
3 eme Copie
ENREGISTREMENT
Division: _______________
Date: ___________________
Numero: _________________
GASTON LACOURSIERE, b.a.ll.l
(LOGO) Notaire et conseiller juridique 3336, Chemin St-Louis Ste-Foy, G1W 1S4 (Quebec) Tel.: 659-1172
L'AN MIL NEUF CENT QUATRE-VINGT-TREIZE le onze mai.
[Seal]
DEVANT Me GASTON LACOURSIERE, notaire pour la Province
de Quebec, exercant a Sainte-Foy.
COMPARAISSENT:
INGENIERIE ELECTRO-OPTIQUE EXFO INC, societe commerciale canadienne legalement constituee en vertu de la Loi sur les societes commerciales canadiennes, ayant son siege social au 465, rue Godin, ville de Vanier, Province de Quebec, G1M 3G7, ici representee par Messieurs GERMAIN LAMONDE, president et ROBERT TREMBLAY secretaire, dument autorises aux fins des presentes aux termes d'un reglement special et d'une resolution du conseil d'administration dont copies certifiees demeurent ci-annexees suivant la Loi du Notariat;
Ci-apres nommee: "LA CORPORATION"
ET
Monsieur RICHARD OUELLET, comptable, domicilie au 9035, de l'Amazone, Neufchatel, ville de Quebec, Province de Quebec, G2B 3Z7;
ci-apres nomme: "LE FIDUCIAIRE"
LESQUELS CONVIENNENT DE CE QUI SUIT:
ARTICLE I
CLAUSES INTERPRETATIVES
Dans le present acte, a moins d'incompatibilite du contexte, les mots et expressions qui suivent auront le sens suivant:
ACTE DE FIDUCIE
a) "Le present acte de fiducie", "cet acte de fiducie", "le present acte", "cet acte", "les presentes", ainsi que toutes expressions semblables signifient le present acte de fideicommis et tout autre acte de fiducie supplementaire ou complementaire au present acte.
BIENS HYPOTHEQUES
b) "Biens hypotheques" signifient les biens faisant l'objet tant de la charge specifique que de la charge flottante creee au present acte.
BIENS SPECIFIQUEMENT HYPOTHEQUES
c) "Biens specifiquement hypotheques" signifient les biens qui sont hypotheques, gages, nantis et affectes ou qui le seront a l'avenir ou qui doivent l'etre, par voie d'hypotheque, gage, nantissement ou charge specifique et fixe et qui sont cedes et transportes, ou qui le seront a l'avenir, ou qui doivent l'etre en tant que garantie specifique pour le paiement de toute somme d'argent qui doit etre garanti par les presentes.
CERTIFICAT D'OFFICIER
d) "Certificat d'officier" signifie tout document ou toute declaration signe par un officier de la corporation ou par l'un de ses administrateurs en vue d'attester que la corporation n'est pas en defaut en vertu des presentes, s'est conformee a toute loi ou a tout reglement, a pose un acte ou possede un bien et pour informer le fiduciaire et les detenteurs d'un fait ou d'une situation relative a la corporation.
CHARGE GENERALE OU FLOTTANTE
e) "Charge generale ou flottante" signifie la garantie creee par le paragraphe 2 de l'article III.
CHARGE SPECIFIQUE
f) "Charge specifique" signifie la garantie creee par le paragraphe 1 de l'article III.
CORPORATION
g) "Corporation" signifie la compagnie, la societe commercial canadienne, la societe en commandite ou la Cooperative comparaissant aux presentes et emettrice d'obligations, et leurs successeurs.
DETENTEURS
h) "Detenteurs" signifie les personnes dont les noms seront inscrits comme detenteur des Obligations dans le registre tenu a cette fin par le fiduciaire.
FIDUCIAIRE
i) "Fiduciaire" signifie le fiduciaire ainsi que ses successeurs.
INSTRUMENT DES DETENTEURS
j) "Instrument des detenteurs" signifie tout document signe par les detenteurs constatant leur consentement, leur requete au fiduciaire ou leurs directives a ce dernier.
INTERPRETATION
k) Les mots ecrits au singulier comprennent le pluriel et inversement; les mots ecrits au masculin comprennent aussi le genre feminin.
OBLIGATION
l) "Obligation" signifie toute Obligation de la corporation, emise, certifiee et ayant cours en vertu des presentes et jouissant des garanties resultant des presentes.
ARTICLE II
PARTICULARITES ET EMISSIONS DES OBLIGATIONS
LIMITATION ET DESIGNATION
1. Les Obligations qui peuvent etre emises et garanties par les presentes seront entierement nominatives, seront limitees a une somme principale totale de DEUX MILLIONS DE DOLLARS (2 000 000.00 $) et designees comme "Obligations Hypothecaires 20%.
TERME
2. Les Obligations seront payables a demande.
DATE
3. Les Obligations seront datees du 15 avril 1993.
INTERET
4. Les Obligations porteront interet a compter de leur date jusqu'a parfait paiement, au taux de VINGT pour cent (20%) l'an et cet interet sera payable a demande. L'interet du et impaye portera a son tour interet calcule mensuellement au meme
taux a compter de la date de demande de paiement jusqu'a la date de son paiement.
LIEU DE PAIEMENT
5. Chaque Obligation sera payable a son detenteur a son adresse au Quebec, apparaissant au registre tenu par le fiduciaire conformement au paragraphe 13 du present article. Si l'adresse du detenteur n'est pas au Quebec, l'Obligation sera payable au bureau du fiduciaire.
PAIEMENT EN MONNAIE CANADIENNE
6. Toute somme d'argent payable en vertu des Obligations et des presentes, le sera en monnaie canadienne.
SIGNATURE DES OBLIGATIONS
7. Les Obligations seront signees par deux officiers ou administrateurs de la corporation; si la corporation n'a qu'un seul administrateur sa seule signature suffit.
FORME
8. Les Obligations seront en substance conformes au libelle apparaissant a l'article XV; elles pourront etre dactylographiees, imprimees ou reproduites par quelque autre procede.
LIVRAISON
9. Les Obligations seront emises par la corporation, certifiees par le fiduciaire et livrees par ce dernier selon les directions de la corporation contenues dans un ordre de remise designant les nom et adresse du detenteur. Cet ordre de remise sera signe par deux officiers ou administrateurs de la corporation; si la corporation n'a qu'un seul administrateur sa seule signature suffit.
CERTIFICAT DU FIDUCIAIRE
10. Aucune Obligation n'engagera la corporation et aucun detenteur ne pourra beneficier des avantages et garanties des presentes a moins que cette Obligation ne porte le certificat du fiduciaire. Ce certificat fera preuve que l'Obligation fait partie de l'emission constatee par les presentes et que son detenteur a droit, en consequence, au benefice des dispositions du present acte.
PARITE ENTRE LES OBLIGATIONS
11. Les Obligations pourront etre emises en coupures ou tranches tel que la corporation
pourra determiner de temps a autre. Les Obligations prendront rang et seront garanties egalement et proportionnellement sans distinction ni preference quelle que soit la date reelle de leur signature par la corporation ou du certificat du fiduciaire.
CONDITIONS D'EMISSION ET RESTRICTIONS DE RE-EMISSION
12. La corporation aux termes et conditions qu'elle determinera pourra nantir les Obligations ou les donner en gage en garantie d'emprunts, de dettes ou d'engagments de cette derniere ou de toute autre personne; elle pourra egalement les vendre ou en disposer de toute autre maniere. Des qu'une Obligation aura ete emise et tant qu'elle sera detenue par un detenteur, la corporation ne pourra emettre d'Obligations additionnelles ni re-emettre ou renantir les Obligations qu'elle aura acquises, rachetees ou retirees, sans avoir obtenu le consentement de ce detenteur.
ENREGISTREMENT ET TRANSPORT
13. La corporation devra faire tenir par le fiduciaire a son bureau a 465, rue Godin, ville de Vanier, un registre dans lequel seront inscrits les nom et adresse des detenteurs des Obligations en cours. Aucun transport d'une Obligation ne sera valable a moins qu'il ne soit consenti par ecrit par le detenteur enregistre ou ses executeurs testamentaires ou ayants droit ou son procureur dument nomme par ecrit et qu'il ne soit inscrit dans ce registre suivant les formalites prescrites par le fiduciaire et sur accomplissement des autres conditions raisonnablement requises par le fiduciaire. Le droit de propriete et la maitrise legale des Obligations seront etablis par ce registre.
DROITS DU DETENTEUR
14. Le detenteur d'une Obligation en sera repute proprietaire a toutes fins que de droit et aura droit d'en recevoir le capital et l'interet sans qu'aucune compensation ou demande reconventionnelle concernant les relations entre la corporation et tout detenteur anterieur ne puisse lui etre oppose.
REMPLACEMENT D'OBLIGATIONS
15. Si une Obligation est endommagee, perdue ou detruite, la corporation, sur demande ecrite du detenteur, emettra et le fiduciaire certifiera et remettra au detenteur dont le nom apparait
dans le registre auquel il est refere dans le paragraphe 13 du present article, une nouvelle Obligation de meme forme et teneur en echange de l'Obligation endommagee et sur annulation de cette derniere, ou pour remplacer celle qui a ete perdue ou detruite.
AVIS AUX DETENTEURS
16. Tout avis en vertu des presentes a un detenteur sera valablement donne s'il est transmis a tel detenteur sera valablement donne s'il est transmis a tel detenteur a son adresse indiquee au registre ci-haut mentionne, par courrier certifie, service de messagerie, telex ou autre moyen de telecommunications ecrites que le fiduciaire jugera approprie. Tel avis sera cense avoir ete donne le jour du recepisse mais a tout evenement pas plus de trois jours ouvrables apres la date de son envoi.
ARTICLE III
CLAUSES D'AFFECTATIONS
CHARGE FIXE ET SPECIFIQUE
1. En consideration des presentes et afin de garantir le paiement des Obligations, en capital et interet, et de toute somme d'argent qui pourrait etre due en vertu des presentes aux detenteurs ou au fiduciaire et, pour assurer l'execution de ses engagements, la corporation:-
a) hypotheque, nantit, met en gage et affecte par voie d'hypotheque, de nantissement, de mise en gage et de charge tous fixes et specifiques, en faveur du fiduciaire pour le benefice des detenteurs, pour la somme de DEUX MILLIONS DE DOLLARS (2 000 000.00$), avec interet au taux de VINGT pour cent (20 %)l'an et, pour garantir le paiement de toute autre somme d'argent qui pourra etre due aux detenteurs ou au fiduciaire en raison des presentes, pour la somme additionnelle de QUATRE CENT MILLE DOLLARS (400,000.00$); et
b) cede et transporte, pour les memes fins, au fiduciaire pour le benefice des detenteurs,
ses biens et droits reels immobiliers, ses droits crees en vertu de baux tant comme locateur que locataire, ses constructions et accessoires, sa machinerie, son outillage, son equipement, ses vehicules et ses autres meubles comprenant tant les biens et droits qu'elle possede actuellement que ceux qu'elle acquerra a l'avenir, sans tenir compte de leur site
et independamment du fait que la corporation les utilise ou non pour son entreprise ou que des biens meubles soient ou non fixes a des immeubles.
CHARGE GENERALE ET FLOTTANTE
2. Pour la meme consideration et afin de garantie le paiement des Obligations, en capital et interet, et de toute somme d'argent qui pourra etre due en vertu des presentes aux detenteurs ou au fiduciaire et pour assurer l'execution de ses engagements la corporation:-
a) hypotheque, nantit, met en gage et affecte, par voie de charge generale et flottante, en faveur du fiduciaire pour le benefice des detenteurs, pour la somme de DEUX MILLIONS DE DOLLARS (2 000 000,00$), avec interet au taux de VINGT pour cent (20%) l'an et, pour garantir le paiement de toute autre somme d'argent qui pourra etre due aux detenteurs ou au fiduciaire en raison des presentes pour la somme additionnelle de QUATRE CENT MILLE DOLLARS (400,000.00$); et
b) cede et transporte, pour les memes fins, au fiduciaire pour le benefice des detenteurs,
son entreprise et tous ses biens et actifs, meubles et immeubles, presents et futurs, de quelque nature et espece, autres que ceux qui sont assujettis a la charge fixe et specifique, incluant, sans limiter la generalite de ce qui precede son capital-actions, ses baux, ses loyers, ses contrats et ses conventions, son achalandage et ses biens intellectuels.
Toutefois cette charge flottante, cette cession et ce transport n'auront pas pour effet, jusqu'a ce que les garanties constituees par le present acte soient devenues executoires et que le fiduciaire ait decide ou soit devenu oblige de rendre cette garantie executoire, d'empecher la corporation de vendre, aliener ou louer les biens et actifs affectes par cette charge flottante, ou d'en disposer, dans le cours ordinaire de ses affaires ou pour les fins de son commerce et plus particulierement de donner des garanties a ses banquiers sur ses matieres premieres ou marchandises fabriquees ou en voie de fabrication, en vertu de l'article 178 de la Loi sur les banques ainsi que sur ses comptes a recevoir et documents de commerce.
GARANTIE EGALE DES OBLIGATIONS
3. Les hypotheques, nantissements, gages et affectations de meme que les cessions et transports constitues par le present article, de meme que tous les droits crees par les presentes sont constitues pour la garantie egale et proportionnelle de toutes les Obligations sans preference les unes sur les autres et le fiduciaire les detient en fiducie pour le benefice egal et proportionnel des detenteurs.
AVANCES
4. Les hypotheques, nantissements, gages, charges, cessions et transports constitues par le present acte auront leur plein effet, a compter de son enregistrement, que les sommes d'argent garanties par le present acte aient ete ou non avancees en tout ou en partie avant ou apres ou lors de la signature du present acte ou de l'emission de toute Obligation.
ARTICLE IV
POSSESSION ET USAGE DES BIENS HYPOTHEQUES
POSSESSION PAR LA CORPORATION
1. Tant que les garanties creees par cet acte ne seront pas devenues executoires, la corporation pourra, sujet aux restrictions stipulees aux presentes, posseder, administrer et utiliser les biens hypotheques de la meme maniere que si le present acte n'avait pas ete execute.
MAINLEVEE PARTIELLE
2. Le fiduciaire pourra donner mainlevee des charges constituees en vertu des presentes sur toute partie des biens specifiquement hypotheques, avec ou sans consideration, aux frais de la corporation, du consentement ecrit des detenteurs.
ALIENATION DE BIENS MEUBLES ET REMPLACEMENT
3. Tant que les garanties creees par cet acte ne seront pas devenues executoires, la corporation pourra vendre ou autrement aliener toute partie de sa machinerie, de son outillage, de son equipement, de ses vehicules et de ses meubles specifiquement hypotheques pourvu que:
a) ces biens ne soient plus necessaires ou utiles a l'exploitation de son entreprise ou soient devenus desuets, endommages ou autrement inutilisables,
b) la corporation substitue d'autres biens, de meme categorie et valeur, qui feront partie des biens specifiquement hypotheques, libres de tout privilege, hypotheque, charge ou
c) la valeur de chaque bien ainsi vendu ou aliene n'excede pas VINGT MILLE DOLLARS (20 000,00$)
et la valeur de l'ensemble des biens vendus ou alienes au cours d'une periode de douze (12) mois n'excede pas CINQUANTE MILLE DOLLARS (50 000,00$).
La corporation devra fournir annuellement au fiduciaire une liste des biens ainsi vendus ou alienes et de ceux acquis en remplacement.
PROHIBITION D'ALIENER
4. Sous reserve de ce qui precede, la corporation ne pourra vendre ou autrement aliener toute partie des biens specifiquement hypotheques.
ARTICLE V
EMPLOI DES SOMMES D'ARGENT PERCUES PAR LE FIDUCIAIRE
CONSIDERATION DES MAINLEVEES
1. Les sommes percues par le fiduciaire en consideration d'une mainlevee ou a la suite de la liberation de biens specifiquement hypotheques ou d'une expropriation seront retenues par lui comme biens specifiquement hypotheques jusqu'a ce qu'elles soient utilisees sur demande de la corporation, avec le consentement des detenteurs, soit a l'acquisition de biens additionnels, soit au paiement de toute dette garantie par le nantissement ou le transport des Obligations ou a toute autre fin agree par les detenteurs.
PRODUIT D'ASSURANCE
2. Le produit de toute assurance recu a la suite de toute perte ou dommage causes par un sinistre ou autre risque assure sera retenu par le fiduciaire comme bien specifiquement hypotheque et sera utilise par lui suivant les instructions des detenteurs pour payer le cout des reparations, des renovations ou des biens de remplacement ou pour toute autre fin autorisee par les detenteurs.
ABSENCE DE NOVATION
3. Aucun encaissement par le fiduciaire et aucune utilisation ou appropriation que ce dernier pourrait faire des sommes percues n'aura pour effet d'operer paiement ou novation de la dette de la corporation constituee par les Obligations ou en vertu des presentes ou n'aura pour effet de diminuer les hypotheques, gages, nantissements et autre charge et garantie presentement constitues nonobstant toute loi, coutume ou usage a ce contraire.
ARTICLE VI
DECLARATION ET ENGAGEMENTS DE LA CORPORATION
TITRES DE PROPRIETE
1. La corporation declare et garantit qu'elle est proprietaire par bon titre, qu'elle a la capacite, le droit et l'autorisation d'hypothequer, gager, nantir, ceder et transporter ses biens tel que prevu dans cet acte et qu'elle defendra son titre de propriete contre toute reclamation ou poursuite.
ACQUISITION DE BIENS ADDITIONNELS
2. Si la corporation acquiert des biens qui par leur nature deviennent affectes par la charge fixe et specifique a titre de biens additionnels, elle accordera immediatement au fiduciaire par acte supplementaire ou autrement, selon que ce dernier requerra, une hypotheque, un nantissement, un gage et une charge fixe et specifique sur ces biens additionnels et lui en fera cession et transport.
PERMISSION DE GARANTIR LE PRIX D'ACQUISITION
3. Lorsque la corporation acquerra des biens additionnels, elle pourra accorder une hypotheque, un gage, un nantissement ou tout autre droit ayant priorite sur la charge specifique pourvu que:
a) le prix de tels biens additionnels n'excede pas leur juste valeur,
b) le droit ainsi confere n'affecte que ces biens additionnels, ne garantisse pas plus que soixante-quinze pour cent (75 %) du prix d'acquisition et ne soit consenti que pour permettre l'acquisition de tels biens, et
c) la portion payee comptant du prix d'acquisition provienne des fonds de
la corporation qui ne sont pas sous le controle du fiduciaire aux termes du paragraphe 1 de l'article V ou qui en ont ete liberes du consentement des detenteurs.
DECLARATION QUANT AUX CHARGES ET COTISATIONS
4. La corporation declare et garantit que les biens hypotheques sont libres de tout privilege, hypotheque ou charge de toute nature, qu'aucune cotisation, contribution, ou taxe les affectant est en souffrance ou a ete payee avec subrogation.
ENREGISTREMENT
5. La corporation procedera avec diligence a l'enregistrement du present acte et de tout acte supplementaire a tout endroit ou cet enregistrement est requis, selon l'avis du conseiller juridique du fiduciaire, pour donner plein effet a ces actes et rendre valide les garanties qui y sont creees.
PAIEMENT DU CAPITAL ET DE L'INTERET
6. La corporation s'engage a payer ou a faire payer aux detenteurs de capital et l'interet dus sur les Obligations ainsi que toute somme d'argent due aux detenteurs ou au fiduciaire de la maniere prevue aux presentes.
MAINTIEN DE L'EXISTENCE CORPORATIVE
7. La corporation s'engage a maintenir son existence corporative, a se soumettre aux lois qui la gouvernent et a proteger et defendre ses droits, privileges et pouvoirs, et son achalandage.
FUSION ET REORGANISATION
8. La corporation s'engage a ne pas se fusionner ni distribuer ses actifs ni ceder la totalite ou une partie substantielle de son entreprise sans avoir obtenu le consentement des detenteurs et avoir assure le maintien de ses engagements et des garanties creees par les presentes.
EXPLOITATION DE L'ENTREPRISE
9. La corporation s'engage a poursuivre l'exploitation de son entreprise avec diligence, efficacite et prudence et a utiliser, conserver et administrer les biens hypotheques de la meme maniere.
Elle tiendra dans la forme requise par la loi et l'usage les registres et livres de comptabilite de ses transactions et operations et le fiduciaire pourra les examiner en tout temps raisonnable.
TAXES
10. La corporation s'engage a payer, au fur et a mesure de leur exigibilite, les taxes, cotisations, impots, contribution et droits des gouvernements imposes sur les biens hypotheques ainsi que l'impot sur le revenu et sur les profits de la corporation.
RESPECT D'ENGAGEMENT
11. La corporation s'engage a respecter ses obligations et a payer, au fur et a mesure de son exigibilite, toute somme d'argent qu'elle doit en vertu d'une loi ou d'une convention de facon a ce que sa possession et son usage des biens hypotheques ou de ses droits dans ceux-ci ne soient pas mis en peril ou diminues au prejudice des garanties creees en vertu des presentes.
CONSERVATION DES GARANTIES
12. La corporation s'engage a maintenir les garanties constitues par cet acte. Sauf dans la mesure ou les dispositions du present acte le lui permettent, la corporation ne devra creer ni souffrir aucune charge d'un rang egal ou prioritaire aux charges resultant des presentes dont elle devra assurer la priorite dans tout acte constituant une charge sur les biens hypotheques. Elle ne sera cependant pas tenue d'obtenir la radiation de toute telle charge qu'elle conteste de bonne foi jusqu'au jugement final a intervenir pourvu qu'elle fournisse au fiduciaire les garanties qu'il jugera suffisantes pour la protection des detenteurs.
ASSURANCES
13. La corporation s'engage a maintenir les biens hypotheques qui sont assurables, assures a la satisfaction du fiduciaire contre la perte et le dommage par incendie et autres risques habituellement couverts en semblable matiere. La corporation devra payer les primes et autres sommes exigibles a ces fins et produire au fiduciaire sur demande les polices d'assurance ainsi que les recus constatant le paiement de la derniere prime echue. Toute police d'assurance devra stipuler que l'indemnite est payable au fiduciaire selon ses interets. Le fiduciaire, que l'indemnite lui ait ete transportee ou non, aura droit de la recevoir et il devra l'utiliser selon les dispositions du paragraphe 2 de l'article V du present acte. La corporation de-
vra, avant l'expiration de toute police d'assurance, fournir au fiduciaire la preuve que cette assurance est renouvelee ou remplacee. Si la corporation fait defaut de maintenir et de transporter cette assurance et d'en fournir la preuve au fiduciaire, celui-ci pourra contracter telle assurance aux frais de la corporation. La corporation remboursera au fiduciaire, sur demande, les primes d'assurance que ce dernier aura payees avec interet au taux ci-dessus mentionne.
Lors de sinistres, la corporation en avisera le fiduciaire sans delai et ne devra entreprendre aucun travaux de reparation ou de reconstruction sans l'approbation du fiduciaire.
RENUMERATION ET REMBOURSEMENT AU FIDUCIAIRE
14. La corporation paiera au fiduciaire une remuneration raisonnable pour ses services en vertu des presentes et lui remboursera, a demande, tous les frais, avances et debourses qu'il jugera a propos de faire ou d'encourir en execution des presentes, comprenant, sans limiter la generalite de ce qui precede, ceux que le fiduciaire pourrait faire ou encourir pour surveiller l'observance des engagements de la corporation qu'il y ait defaut ou non.
Si la corporation manque a ses engagements, le fiduciaire pourra s'y substituer et avancer les sommes d'argent requises a ces fins.
Ces sommes seront immediatement remboursables par la corporation avec interet au taux que paierait le fiduciaire pour emprunter ces sommes de ses banquiers plus deux pour cent (2 %) et le remboursement sera garanti par les charges du present acte avec priorite sur les Obligations.
MAINTIEN ET RENOUVELLEMENT DES BAUX ET LICENCES
15. La Corporation maintiendra en vigueur tous baux et licences faisant partie des biens hypotheques, de facon a ce que les garanties constituees par les presentes ne soient pas diminuees. Lorsque ces baux et licences prendront fin, la corporation devra alors obtenir tous baux et licences necessaires ou utiles a son entreprise.
ARTICLE VII
CAS DE DEFAUT
La garantie presentement constituee deviendra executoire dans chacun des cas suivants:
PAIEMENT DU CAPITAL ET DES INTERETS
1. Si la corporation fait defaut de payer sur demande le capital et l'interet des Obligations; ou
ASSURANCES
2. Si la corporation fait defaut de maintenir constamment en vigueur les assurances qu'elle s'est obligee de souscrire en vertu du paragraphe 13 de l'article VI; ou
TAXES
3. Si la corporation fait defaut de payer lors de leur exigibilite les taxes, cotisations et impots qu'elle s'est engagee a payer au paragraphe 10 de l'article VI; ou
PAIEMENT AU FIDUCIAIRE
4. Si la corporation fait defaut de payer ou de rembourser sur demande au fiduciaire les sommes d'argent qui lui sont payables en vertu des presentes; ou
VENTE DES BIENS
5. Si la corporation vend, aliene ou se departit, sans le consentement du fiduciaire, de la totalite ou d'une partie des biens specifiquement hypotheques; ou
FAILLITE ET INSOLVABILITE
6. Si la corporation adopte une resolution ordonnant sa liquidation, se prevaut de l'une ou l'autre des dispositions de la Loi concernant la faillite ou de la Loi sur les arrangements avec les creanciers des compagnies, fait cession de ses biens pour le benefice de ses creanciers ou reconnait son insolvabilite de toute autre maniere ou si une ordonnance est rendue en vue de sa liquidation, si une requete en faillite est presentee contre elle, si un sequestre lui est nomme ou si la corporation est depossedee ou perd le controle d'une partie substantielle des biens hypotheques; ou
EXECUTION
7. Si une saisie est effectuee ou executee sur les biens de la corporation et que la reclamation demeure impayee pour une periode de cinq (5) jours s'il s'agit de biens meubles ou de vingt et un (21) jours s'il s'agit de biens immeubles, sans etre contestee de bonne foi par la corporation. Toutefois, au cas de contestation par la corporation, le
fiduciaire pourra, s'il est d'avis que cette saisie peut compromettre ou diminuer la garantie creee par les presentes, exiger que la corporation lui donne des garanties additionnelles; ou
AUTRES ENGAGEMENTS
8. Si la corporation fait defaut en temps utile mais a tout evenement pas plus de trente (30) jours apres que l'acte vise doit etre pose ou que l'engagement doit etre execute, de poser un acte ou d'accomplir une obligation a laquelle elle est tenue en vertu des presentes, de la loi ou d'un contrat, de sorte que par ce defaut les garanties creees aux presentes sur les biens hypotheques soient affectees de maniere defavorable.
ARTICLE VIII
REALISATION DE LA GARANTIE
1. Lorsque la garantie devient executoire, le fiduciaire peut, mais doit s'il en est requis par les detenteurs:
DECLARATION D'EXIGIBILITE
a) declarer exigibles le capital et l'interet des Obligations alors en cours de meme que toutes autres sommes d'argent dont le paiement est garanti par le present acte. La corporation doit immediatement les payer au fiduciaire qui les impute de la maniere prevue au paragraphe 4 de cet article;
PRISE DE POSSESSION
b) prendre possession avec ou sans declaration d'exigibilite de tout ou partie des biens hypotheques avec pouvoirs de diriger, continuer ou cesser l'exploitation de l'entreprise de la corporation et de gerer ses biens et affaires et a ces fins le fiduciaire pourra:
(i) recevoir les revenus et profits des biens hypotheques, ceux provenant de leur administration, les revenus de l'exploitation de l'entreprise ainsi que toutes sommes d'argent dues a la corporation;
(ii) payer toutes depenses, frais, honoraires et avances du fiduciaire, payer toute taxe, contribution ou autre charge affectant les biens hypotheques et ayant priorite sur la garantie resultant des presentes ou dont le paiement serait necessaire pour conserver les biens, payer tous frais
et depenses encourus par le fiduciaire pour l'exploitation de l'entreprise de la corporation y compris tels frais encourus par la corporation dans les trente (30) jours precedant la prise de possession;
(iii) emprunter de banquiers ou autres aux conditions qu'il jugera acceptables ou avancer a la corporation toute somme d'argent necessaire. Les sommes ainsi empruntees ou avancees seront remboursables par la corporation, a demande, porteront interet au taux que paierait le fiduciaire pour emprunter ces sommes de ses banquiers plus deux pour cent (2%). Ces sommes et l'interet beneficieront, par priorite sur les Obligations, de la garantie creee aux presentes.
Le fiduciaire imputera les surplus ou profits realises par l'exercice des pouvoirs ci-dessus de la maniere prevue au paragraphe 4 de cet article.
VENTE
c) Vendre ou ceder, lorsqu'une declaration d'exigibilite aura ete faite et demeurera insatisfaite, meme s'il n'a pas pris possession, tout ou partie des biens hypotheques, soit:
i) par vente de gre a gre; ou
ii) par vente publique ou par soumission apres avoir donne les avis qu'il determinera, ou
iii) par toute forme de cession, de transport ou autre mode d'alienation.
Toutefois, dans le cas de vente d'immeubles, le fiduciaire sera tenu de donner l'avis prevu par le Code civil du Bas-Canada.
Dans l'exercice de ses pouvoirs de vendre le fiduciaire pourra:
(i) determiner lui-meme les delais et les formalites qu'il jugera avantageux sans etre tenu a quelque formalite ou delai prescrits par quelque loi ou reglement relatifs a la vente ou a la disposition des biens et actifs d'un debiteur;
(ii) determiner les modalites de telle vente ou cession, y consentir pour un
prix payable comptant, au moyen d'obligations ou en nature, selon son jugement; accepter que tout ou partie de ce prix soit paye a terme aux conditions et avec les garanties qu'il determinera, en recevoir le paiement et en donner quittance, consentir toute mainlevee totale ou partielle des garanties qu'il aura recues;
(iii) amender, rescinder et refaire toute telle vente ou cession;
(iv) conferer a l'acquereur des biens ainsi vendus ou cedes un titre bon, valable et definitif opposable a la corporation, a ses successeurs et a toute autre personne qui pretendrait reclamer ces biens soit en son nom soit au nom de la corporation;
le fiduciaire imputera le produit de telle vente ou cession de la maniere prevue au paragraphe 4 de cet article.
Le fiduciaire ou tout detenteur pourra se porter acquereur des biens hypotheques que cette vente ou cession soit faite en vertu des pouvoirs contenus aux presentes ou a la suite d'une saisie ou d'une autre procedure judiciaire.
DELAISSEMENT PAR LA CORPORATION
2. La corporation abandonnera au fiduciaire la possession des biens hypotheques, la conduite de ses affaires et signera tout document utile a cette fin sur demande de ce dernier. Elle ne devra aucunement nuire a l'exercice des pouvoirs du fiduciaire. A moins que ce dernier n'ait consenti, par ecrit, a ce que les administrateurs et les officiers de la corporation continuent d'exercer leurs pouvoirs ou que la possession des biens en soit remise a la corporation, les pouvoirs de ces derniers sont suspendus immediatement lors de la prise de possession par le fiduciaire.
FIDUCIAIRE MANDATAIRE DE LA CORPORATION
3. La corporation constitue le fiduciaire mandataire general irrevocable avec le pouvoir expres de:
(i) poser tout acte, executer toute obligation, consentir toute vente ou cession, prendre tout engagement, donner tout consentement, recevoir toute somme due a la corporation et genera-
lement exercer sur les biens hypotheques tout pouvoir du proprietaire;
(ii) signer au nom de la corporation dans l'exercice des pouvoirs qui lui sont conferes par les presentes, tout contrat, acte ou document;
(iii) utiliser dans tous les cas le nom de la corporation ou son propre nom comme fiduciaire; et
(iv) exercer tout pouvoir de substitution ou de revocation.
IMPUTATION
4. Sous reserve de toute disposition specifique des presentes quant a l'affectation de toute somme particuliere, toutes sommes d'argent se trouvant entre les mains du fiduciaire a la suite de sa prise de possession, de son exploitation des affaires de la corporation, de toute vente et de toute liquidation des biens hypotheques ou autrement, seront imputees par le fiduciaire dans l'ordre suivant:
(i) au paiement en capital, interet et frais incidents des emprunts ou avances effectues pour le compte ou le benefice de cette fiducie;
(ii) au paiement des depenses et frais du fiduciaire avec interet au meme taux que pour les sommes empruntees;
(iii) au paiement des honoraires du fiduciaire;
(iv) au paiement du capital, de l'interet et de l'interet sur l'interet dus sur les obligations en cours lors du defaut. Si toutefois le montant ainsi disponible etait insuffisant, il sera alors impute proportionnellement au montant du sur chaque obligation en cours lors du defaut sans distinction ou priorite entre les obligations, le capital, l'interet ou l'interet sur l'interet;
(v) tout surplus, s'il en est, sera remis a la corporation ou ses ayants droit.
PRODUCTION DES OBLIGATIONS
5. Le fiduciaire devra, lors de tout paiement sur les Obligations, exiger que le detenteur
produise son Obligation pour annulation s'il s'agit d'un paiement total et pour inscription sur l'Obligation du montant paye s'il s'agit d'un paiement partiel. Toutefois, le fiduciaire pourra, aux conditions qu'il determinera, dispenser le detenteur de produire son Obligation.
PAIEMENT AU MOYEN D'OBLIGATIONS
6. Tout detenteur qui se portera acquereur de biens hypotheques tel qu'il est permis par le present article, pourra acquitter tout ou partie du prix de tel achat au moyen d'Obligations garanties par les presentes. Tel paiement ne vaudra que jusqu'a concurrence de la somme imputable sur ces Obligations aux termes du present article.
EXIGIBILITE EN CAS DE VENTE
7. Toute vente des biens hypotheques faite en vertu du present article ou par suite d'une saisie ou d'une autre procedure judiciaire, aura l'effet d'une declaration d'exigibilite faite conformement au paragraphe 1 a) du present article.
RENONCIATION A DEFAUT
8. Toutes les fois que les garanties seront devenues executoires, le fiduciaire, s'il en est requis par les detenteurs, devra, aux conditions qu'ils determineront, renoncer a tout defaut et exigibilite, renoncer a toute declaration alors faite, arreter toute procedure, remettre a la corporation la possession de ceux des biens hypotheques qui sont encore en sa possession, l'exploitation de son entreprise et permettre que la corporation continue son exploitation comme si les garanties n'etaient pas devenues executoires. Toutefois, aucun acte ou omission du fiduciaire ou des detenteurs n'affectera leur droit de se prevaloir de defauts subsequents ou du defaut de la corporation de se conformer aux conditions determinees par les detenteurs lors de telle renonciation. De plus, aucune renonciation a defaut ou remise des biens n'emportera novation.
EXONERATION DE RESPONSABILITE POUR LE FIDUCIAIRE
9. Seuls les biens hypotheques sous le controle et l'administration du fiduciaire repondent de ses obligations contractuelles et autres decoulant de ses actes ou omissions. Il ne peut etre recherche pour faute ou omission en cas de perte sur la liquidation des biens. Il n'est tenu de rendre compte que des biens dont il a eu possession et des revenus et depenses de son administration.
PROTECTION DES TIERS
10. Toute personne faisant affaires ou contractant de bonne foi avec le fiduciaire ne sera pas tenu de s'enquerir de son autorite et de ses pouvoirs ni de l'accomplissement par ce dernier des obligations et formalites resultant des presentes. Le contrat ou la quittance consenti par le fiduciaire constitue un titre ou une quittance valide et definitive sans que cette personne ne soit tenue de voir a l'imputation par le fiduciaire des sommes qu'elle a payees.
RECOURS CUMULATIFS
11. Les recours du fiduciaire et des detenteurs sont cumulatifs et non alternatifs et peuvent s'exercer concurremment entre eux ou avec ceux prevus par la loi.
CONFIRMATION JUDICIAIRE
12. Si apres l'imputation du produit de la liquidation des biens hypotheques il demeurait encore quelques sommes dues sur les Obligations ou au fiduciaire, les detenteurs ou le fiduciaire, pour leur compte, pourront demander devant tout tribunal competent que jugement intervienne pour reconnaitre judiciairement la creance des detenteurs et du fiduciaire.
ARTICLE IX
CONCERNANT LE FIDUCIAIRE
POUVOIRS
1. En outre des dispositions contenues aux presentes et des dispositions legislatives applicables, le fiduciaire possede tous les droits et pouvoirs necessaires ou utiles a l'accomplissement de sa charge.
Il peut notamment :
a) agir selon l'avis ou avec l'assistance de tout professionnel ou expert sans etre tenu de suivre cet avis ou d'accepter cette assistance;
b) retenir ou engager, contre remuneration, les services de tout professionnel, homme de metier ou agent, qui peut etre choisi par les detenteurs ou etre lui-meme un detenteur et lui deleguer tout ou partie de ses pouvoirs;
c) representer les detenteurs aupres de tout syndic, sequestre ou liquidateur des biens de la corporation, produire ou prouver toute reclamation et voter et agir a toute assemblee des creanciers ou dans toute procedure;
d) ester en justice en vue d'obtenir l'execution des engagements de la corporation ou d'assurer la protection des garanties constituees aux presentes, sans la necessite d'etre en possession des Obligations ou de les produire, et
e) transiger, compromettre et regler a l'amiable.
DEVOIRS
2. Le fiduciaire exerce ses pouvoirs a sa discretion mais il doit les exercer s'il en est requis par les detenteurs et se conformer a leurs directives. Les detenteurs doivent alors lui fournir les sommes d'argent necessaires ainsi que des garanties satisfaisantes pour assurer sa protection et pour l'indemniser de toute responsabilite et de tous frais, perte ou dommage qu'il pourra encourir a ce sujet.
Il doit permettre aux detenteurs ou a leurs representants de consulter librement les dossiers qu'il peut avoir en sa possession quant a la corporation ou au present acte.
En toute chose le fiduciaire n'est tenu de faire preuve que d'une diligence raisonnable.
EXONERATIONS
3. Tant qu'il ne sera pas tenu de le faire en vertu des presentes, le fiduciaire est exempte:
a) de surveiller la conduite des affaires de la corporation ou d'executer une obligation quelconque de cette derniere lui resultant des presentes ou de la loi, et
b) de proceder a l'enregistrement des presentes et de tout acte ou avis en decoulant, ou d'en faire toute denonciation ou publicite.
En aucun temps le fiduciaire n'est responsable:
a) des Obligations et de la validite du present acte;
b) des declarations et representations de la corporation;
c) des titres de propriete de la corporation aux biens hypotheques et de la validite et du rang des charges resultant des presentes;
d) des faits, gestes, fautes ou omissions de tout professionnel, homme de metier ou agent engage par lui conformement aux presentes;
e) de l'utilisation des sommes d'argent versees ou payees par des personnes desirant souscrire ou ayant souscrit des Obligations, et
f) des faits et gestes qu'il pose conformement aux directives contenues dans un instruments des detenteurs.
Dans l'accomplissement de sa charge, le fiduciaire n'encourt aucune responsabilite personnelle sauf les cas de fraude et de negligence grave.
ARTICLE X
NOUVEAU FIDUCIAIRE
Si le fiduciaire demissionne, et il pourra toujours le faire en donnant quatre-vingt-dix (90) jours d'avis a la corporation et aux detenteurs, ou s'il tombe en faillite ou en liquidation, perd sa capacite juridique ou refuse d'agir, la corporation doit des lors lui nommer un remplacant agree par les detenteurs.
Si la corporation neglige de nommer un nouveau fiduciaire dans les cinq (5) jours de tel evenement, les detenteurs pourront alors nommer ce remplacant.
Lorsque les garanties sont devenues executoires, les detenteurs seuls, sans le concours ni la participation de la corporation peuvent revoquer le fiduciaire pourvu que concurremment, ils procedent a la nomination d'un remplacant.
Le fiduciaire en fonction devra etre une compagnie de fiducie ayant une place d'affaires au Quebec mais si aucune d'elles n'accepte d'agir, le remplacant pourra etre un individu.
Tout nouveau fiduciaire aura les memes droits, prerogatives, obligations et devoirs que le fiduciaire originaire.
ARTICLE XI
FIN DE LA FIDUCIE
La presente fiducie prendra fin soit:
a) lorsque toutes les Obligations auront ete remises au fiduciaire pour annulation et que ce dernier aura recu paiement des sommes d'argent qui lui sont dues en vertu des presentes, ou
b) lorsque le fiduciaire aura obtenu de la corporation les garanties qu'il jugera suffisantes pour assurer le paiement de toutes les Obligations encore en circulation et de toutes les autres sommes d'argent dues ou qui pourraient devenir dues en vertu des presentes.
Le fiduciaire devra alors, contre paiement par la corporation des honoraires et debourses s'y rapportant, donner quittance, mettre fin a la fiducie et executer tous actes necessaires pour liberer les biens hypotheques des hypotheques, nantissement, gage, cession et transport resultant des presentes.
Le fiduciaire, s'il en est requis par les detenteurs, pourra liberer tout ou partie des biens hypotheques des hypotheques, gage, nantissement, cession et transport resultant des presentes, par mainlevee avec ou sans consideration.
Tout registrateur est tenu d'effectuer un enregistrement ou une radiation sur la seule requisition du fiduciaire sans avoir a verifier l'observance de quelque formalite ou condition du present acte.
ARTICLE XII
CORRECTION
La corporation et le fiduciaire peuvent executer tout acte supplementaire aux fins de corriger quelqu'erreur du present acte, dans la mesure ou le fiduciaire juge qu'une telle correction ne porte pas atteinte aux droits et a la protection des detenteurs.
ARTICLE XIII
INTERPRETATION
Le present acte est interprete selon les lois du Quebec et les intitules ne font pas partie de son contenu.
ARTICLE XIV
DATE DE REFERENCE
Nonobstant la date de son execution, on peut referer a cet acte comme etant celui du 15 avril 1993.
ARTICLE XV
LIBELLE DES OBLIGATIONS
Les Obligations seront substantiellement libellees comme suit:
CANADA
PROVINCE DE QUEBEC
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
(incorporee en vertu des lois du Quebec)
OBLIGATION HYPOTHECAIRE 20%
NO:____________ 2 000 000,00$
INGENIERIE ELECTRO-OPTIQUE EXFO INC. (ci-apres appelee "la corporation"), pour valeur recue, promet de payer a demande a son adresse au Quebec a RICHARD OUELLET ou a tout detenteur immatricule contre presentation et remise de cette Obligation la somme de DEUX MILLIONS DE DOLLARS (2 000 000.00$) en monnaie canadienne et de payer aussi, a demande, interet en meme monnaie et a la meme place, sur ladite somme a compter de la date de l'Obligation, jusqu'a parfait paiement, au taux de VINGT pour cent (20%) par annee.
L'interet du et impaye portera a son tour interet, calcule mensuellement au meme taux, a compter de la date de la demande de paiement jusqu'a la date de son paiement.
Toutes les Obligations en cours prennent rang et sont garanties egalement et proportionnellement par l'acte de fiducie portant la date de reference du 15 avril 1993 (ci-apres appele "l'acte de fiducie") fait par la corporation en faveur de RICHARD OUELLET a titre de fiduciaire, lequel acte definit la nature et les particularites de la
garantie qui y est creee ainsi que l'etendue des droits afferents aux obligations.
Cette Obligation est cessible par son detenteur en autant que les dispositions de l'acte de fiducie a cet effet soient observees.
Pour etre valide, cette Obligation doit etre certifiee par le fiduciaire.
EN FOI DE QUOI, la corporation a fait dater cette Obligation du 15 avril 1993 et l'a fait signer par son president, Monsieur Germain Lalonde et son secretaire Monsieur Robert Tremblay
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
par /s/ Germain Lalonde
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par /s/ Robert Tremblay
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CERTIFICAT DU FIDUCIAIRE
Cette Obligation constitue une obligation hypothecaire 20% de DEUX MILLIONS DE DOLLARS (2 000 000.00 $) emise en vertu de l'acte de fiducie precite.
Certifie le
/s/ Richard Ouellet ----------------------------------- RICHARD OUELLET |
FORMULE DE TRANSPORT
Pour valeur recue le soussigne cede la presente Obligation avec tout interet accru a et donne instructions au fiduciaire d'inscrire la presente Obligation au nom du cessionnaire dans le registre tenu a cette fin et de livrer ladite Obligation au cessionnaire.
Signe a ce
par
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ATTESTATION DU FIDUCIAIRE
Le transport ci-dessus en faveur de a ete inscrit dans le registre tenu a cette fin.
Signe a ce
par
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DONT ACTE a Quebec, sous le numero DIX-HUIT MILLE TROIS CENT QUARANTE
(18340) des minutes du notaire soussigne.
LES PARTIES ayant declare avoir pris connaissance du present acte, et ayant expressement exempte le notaire de leur en donner lecture ou que lecture soit faite devant lui, les representants de la corporation et du fiduciaire ont signe le present acte en presence du notaire soussigne.
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
par: _______________________________
par: _______________________________
Vraie Copie.
REGLEMENT D'EMPRUNT
DE
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Les administrateurs peuvent et ils sont par les presentes autorises a:
a) emprunter sur le credit de la compagnie;
b) emettre des obligations, debentures ou autres valeurs de la compagnie et les donner en garantie ou les vendre pour les fins et de la maniere qu'ils determineront;
c) aux fins du paragraphe b) hypothequer, nantir, mettre en gage, affecter, ceder et transporter, en faveur d'un fiduciaire par acte de fiducie, les biens et droits de la compagnie, mobiliers et immobiliers, presents et futurs, y compris son entreprise tel que permis par la Loi sur les pouvoirs speciaux des corporations (L.R.Q. Chap. P.16);
d) pour assurer le paiement des emprunts faits autrement que par emission d'obligations ainsi que le paiement de ses autres dettes ou l'execution de ses contrats et engagements, hypothequer ou nantir ses immeubles ou donner en gage ou autrement affecter ses biens meubles et donner toute garantie permise par la loi;
e) determiner par resolution les modalites d'exercice des pouvoirs qui leur sont conferes par ce reglement et autoriser toute personne a poser tout acte, a signer tout document et a faire toute declaration necessaire a ces fins.
Aucune disposition du present reglement ne doit limiter ni restreindre les emprunts faits par la compagnie au moyen de lettres de change ou billets faits, tires, acceptes ou endosses par elle ou en sa faveur, et ne doit affecter ni changer ni restreindre les droits et pouvoirs conferes aux administrateurs par la loi ou par tout autre reglement de la compagnie.
************************
Je, soussigne, secretaire de INGENIERIE ELECTRO-OPTIQUE EXFO INC. certifie que ce document est une copie conforme du reglement d'emprunt adopte par le conseil d'administration le 11 mai 1993
------------------------------ et confirme par ses actionnaires le meme jour et que ce reglement a son plein effet et qu'il est en vigueur.
Certifie le 11 mai 1993
par /s/ Signature
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SECRETAIRE
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DOCUMENT RECONNU VERITABLE ET ANNEXE A LA MINUTE 18340 DU NOTAIRE SOUSSIGNE.
par /s/ Signature
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par /s/ Signature
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par /s/ Signature
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par /s/ Signature
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Vraie Copie.
RESOLUTION
DE
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Sur proposition dument faite et appuyee, il fut unanimement resolu:
ATTENDU qu'il est opportun et dans l'interet de la compagnie que les administrateurs exercent les pouvoirs d'emprunt qui leur sont conferes.
EN CONSEQUENCE, QU'IL SOIT ET IL EST PAR LES PRESENTES RESOLU:
1. QUE la creation et l'emission d'obligations premiere hypotheque (ci-apres appelees les "obligations") de la compagnie n'excedant pas une valeur nominale globale de DEUX MILLIONS DE DOLLARS (2 000 000 $) en cours en quelque temps que ce soit et elles sont par les presentes autorisees, le tout sous reserve des termes et conditions enonces ou prevus a l'acte de fiducie d'hypotheque, de nantissement et de gage (parfois appele ci-apres l'"acte de fiducie");
2. QUE, sous reserve des dispositions de l'acte de fiducie, les obligations peuvent etre emises en une ou plusieurs series et chaque serie, sauf les obligations 20% premiere hypotheque, au sujet desquelles des dispositions particulieres sont enoncees ci-apres et dans l'acte de fiducie, sous reserve des dispositions de l'acte de fiducie, portera telle ou telles dates, portera interet a tel ou tels taux, sera rachetable avant echeance de telle maniere, avec ou sans le paiement d'une prime et contiendra ou sera sujette a telles dispositions, tel qu'il sera juge necessaire ou opportun ou tel que determine en vertu d'une resolution du conseil d'administration de la compagnie adopte au plus tard a la date d'emission de cette serie;
3. QUE sous reserve des dispositions de l'acte de fiducie, les obligations peuvent etre emises pour telle consideration ou a tel prix et selon les termes et conditions qui ne seront pas incompatibles aux dispositions de l'acte de fiducie qui seront determines par les administrateurs de la compagnie et a telles dates et pour tels montants qui peuvent etre exiges en vertu des fins pour lesquelles les obligations sont emises;
4. QU'UNE valeur nominale de DEUX MILLIONS DE DOLLARS (2 000 000$) d'obligations 20 %f premiere hypotheque soit et elle est autorisee, pour emission sous reserve des dispositions de l'acte de fiducie, laquelle emission echerra et deviendra due et payable a demande et lesdites obligations porteront la date officielle de l'acte de fiducie, porteront interet aussi bien avant qu'apres echeance et avant et apres defaut au taux de VINGT pour cent (20 %) par annee payable aux dates et de la maniere mentionnees a l'acte de fiducie avec interet sur tout interet arriere au meme taux calcule quotidiennement a compter de sa date d'echeance jusqu'a la date de paiement; et elles ne seront pas rachetables autrement qu'aux dates et de la maniere mentionnees a l'acte de fiducie;
5. QUE les obligations seront emises substantiellement de la facon formulee au premier supplement dudit acte de fiducie;
6. QUE RICHARD OUELLET soit et IL est par les presentes nomme fiduciaire pour les obligations en vertu dudit acte de fiducie;
7. QUE le projet d'acte de fiducie d'hypotheque, de nantissement et de gage par notre compagnie en faveur dudit fiduciaire redige afin de garantir le capital, l'interet et tous autres deniers sur les obligations, tel que mentionne audit projet, et comprenant un expose des termes et conditions sous reserve desquels les obligations doivent etre emises et garanties et hypothequant, nantissant, gageant, affectant et cedant et transferant, de la maniere et sous reserve de ce qui y est stipule, audit fiduciaire, par voie de charge fixe, specifique et de premier rang et par voie de charge flottante les biens, les droits et l'actif de la compagnie, le tout tel qu'y decrit ou tel qu'y refere et contenant aussi les dispositions relatives aux defauts, recours en cas de defaut, quittances partielles et autres dispositions, lequel projet a ete soumis a la presente assemblee qui l'a etudie, et il est par les presentes approuve et qu'un acte selon la formule et les conditions dudit projet et tous autres actes y supplementaires ou necessaires pour y donner effet soient signes au nom de la compagnie par deux officiers ou administrateurs agissant de concert ou tout officier agissant de concert avec tout administrateur de la compagnie, avec tels amendements et telles variations que ces deux officiers ou administrateurs ou cet officier ou cet administrateur jugeront opportuns, et que l'approbation de tout tel officier ou de tout tel administrateur de tout amendement ou de toute variation dans la formule ou dans les conditions desdits projets soit attestee de facon concluante par sa signature sur lesdits actes;
8. QUE deux officiers ou administrateurs agissant de concert ou tout officier agissant de concert avec un administrateur de la compagnie soient par les presentes autorises a signer ou a contresigner, selon le cas, conformement aux dispositions de l'acte de fiducie, toutes les obligations qui seront emises conformement a ce qui precede, a y apposer le sceau corporatif de la compagnie et a les livrer au fiduciaire pour certification, et a signer, conformement aux dispositions de l'acte de fiducie, la demande au fiduciaire pour cette certification et livraison des obligations conformement aux directives de cette demande; et
9. QUE deux officiers ou administrateurs agissant de concert ou tout officier agissant de concert avec tout administrateur de la compagnie soient et ils sont par les presentes autorises et requis, au nom de la compagnie, de signer et de livrer tous ces actes, documents et ecrits et d'accomplir et de faire tous tels actes et choses qui, a leur discretion, seront necessaires, desirables ou utiles aux fins de donner effet a la presente resolution et a l'emission desdites obligations conformement aux dispositions des presentes.
Je, soussigne, secretaire de INGENIERIE ELECTRO-OPTIQUE EXFO INC. certifie par les presentes que ce qui precede est une copie veritable d'une resolution adoptee a une assemblee du Conseil d'Administration de ladite compagnie dument convoquee et tenue le
Certifie le 11 mai 1993
/s/ Signature --------------------------------------- SECRETAIRE |
DOCUMENT RECONNU VERITABLE ET ANNEXE A LA MINUTE 18340 DU NOTAIRE SOUSSIGNE.
/s/ Signature --------------------------------------- /s/ Signature --------------------------------------- /s/ Signature --------------------------------------- /s/ Signature --------------------------------------- |
Vraie Copie.
IN RE: L'acte de fiducie portant la date nominale du 15 avril 1993 en faveur de RICHARD OUELLET es qualite de fiduciaire a l'emission d'obligations en premiere hypotheque au montant de 2 000 000 $ portant interet au taux de 20 % par annee par
INGENIERIE ELECTRO-OPTIQUE EXFO INC
ORDRE DE REMISE
A: RICHARD OUELLET, C.A.
9035, de l'Amazone,
Quebec (Quebec)
G2B 3Z7
Monsieur,
Nous vous avons livre en votre qualite de fiduciaire designe a l'acte de fiducie ci-haut mentionne, une obligation 20 %, premiere hypotheque, de notre compagnie, pour une somme principale de 2 000 000 $.
Nous vous prions de certifier ladite obligation en date du 15 avril 1993, d'inscrire a votre registre les nom et adresse des titulaires de celle-ci et de la remettre immediatement et sans consideration auxdits titulaires, savoir:
GEXFO INVESTISSEMENTS
TECHNOLOGIQUES INC.
465, rue Godin
Ville Vanier (Quebec)
G1M 3G7
Donne a Quebec
ce 15 avril 1993.
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
Par: /s/ Signature
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Par: /s/ Signature
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CANADA
PROVINCE DE QUEBEC
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
(incorporee en vertu des lois du Quebec)
OBLIGATION HYPOTHECAIRE 20 %
INGENIERIE ELECTRO-OPTIQUE EXFO INC. (ci-apres appelee "la corporation"), pour valeur recue, promet de payer a demande a son adresse au Quebec a RICHARD OUELLET ou a tout detenteur immatricule contre presentation et remise de cette Obligation la somme de DEUX MILLIONS DE DOLLARS (2 000 000,00 $) en monnaie canadienne et de payer aussi, a demande, interet en meme monnaie et a la meme place, sur ladite somme a compter de la date de l'Obligation, jusqu'a parfait paiement, au taux de VINGT pour cent (20 %) par annee.
L'interet du et impaye portera a son tour interet, calcule mensuellement au meme taux, a compter de la date de la demande de paiement jusqu'a la date de son paiement.
Toutes les Obligations en cours prennent rang et sont garanties egalement et proportionnellement par l'acte de fiducie portant la date de reference du 15 avril 1993 (ci-apres appele "l'acte de fiducie") fait par la corporation en faveur de RICHARD OUELLET a titre de fiduciaire, lequel acte definit la nature et les particularites de la garantie qui y est creee ainsi que l'etendue des droits afferents aux obligations.
Cette Obligation est cessible par son detenteur en autant que les dispositions de l'acte de fiducie a cet effet soient observees.
Pour etre valide, cette Obligation doit etre certifiee par le fiduciaire.
EN FOI DE QUOI, la corporation a fait dater cette Obligation en date du 15 avril 1993 et l'a fait signer par son president Monsieur Germain Lamonde et son secretaire Monsieur Robert Tremblay.
INGENIERIE ELECTRO-OPTIQUE EXFO INC.
par /s/ Germain Lamonde
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par /s/ Robert Tremblay
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NO 18340
11 mai 1993
Acte de Fiducie
INGENIERIE ELECTRO-OPTIQUE INC.
et
Richard Ouellet (fiduciaire)
4eme Copie
ENREGISTREMENT
Division: Quebec
Date: 13/5/93
Numero: 1509666
GASTON LACOURSIERE, b.a.ll.l.
Notaire et conseiller juridique
3336, Chemin St-Louis
Ste-Foy, G1W 1S4
(Quebec) Tel.: 659-1172
EXHIBIT 10.10
SUMMARY IN ENGLISH
Resolution of the Board of Directors of EXFO Electro-Optical Engineering inc. ("EXFO"), dated September 1, 1998.
EXCHANGE: Exchange between EXFO and GEXFO Investissements
Technologiques inc. of all the issued and outstanding
shares held by GEXFO Investissements Technologiques
inc. in the share capital of GEXFO Distribution
Internationale inc., namely 10 Class "A" Shares.
CONSIDERATION: Issuance by EXFO of 1 Class "C" Share of its share
capital in favour of GEXFO Investissements
Technologiques inc.
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RESOLUTIONS DES ADMINISTRATEURS DE
"EXFO INGENIERIE ELECTRO-OPTIQUE INC."
RE: ECHANGE D'ACTIONS
DATE D'ENTREE EN VIGUEUR : Le 1er septembre 1998.
ATTENDU QUE la societe a convenu avec GEXFO Investissements Technologiques inc. ("GEXFO") de proceder a un echange d'actions.
EN CONSEQUENCE, IL EST RESOLU:
1. D'ECHANGER les dix (10) actions categorie "A" detenues par GEXFO dans le capital-actions de GEXFO Distribution Internationale inc. contre une (1) action categorie "C" du capital-social de la societe.
2. DE DONNER instructions et instructions sont par les presentes donnees au secretaire de la societe d'emettre, de preparer et remettre a GEXFO un certificat representant une (1) action categorie "C" du capital-social de la societe et d'inscrire les entrees appropriees dans les registres corporatifs de la societe.
3. QUE messieurs Germain Lamonde et Robert Tremblay soient, et ils sont par les presentes autorises a signer, pour et au nom de la societe, la convention d'echange, substantiellement selon la teneur du projet soumis aux administrateurs et dument approuve, a convenir des clauses, amendements et conditions qu'ils jugeront appropries et a signer tout autre document et a poser tout autre geste utile ou necessaire pour donner plein effet aux presentes resolutions.
LES RESOLUTIONS CI-DESSUS SONT SIGNEES PAR TOUS LES ADMINISTRATEURS DE LA SOCIETE QUI AURAIENT EU DROIT DE VOTE SUR ICELLES LORS D'UNE ASSEMBLEE DES ADMINISTRATEURS, POUR AVOIR PLEINE VIGUEUR ET PLEIN EFFET, LE TOUT CONFORMEMENT A LA LOI.
ADOPTEES ET SIGNEES PAR TOUS LES ADMINISTRATEURS DE LA SOCIETE.
/s/ Germain Lamonde /s/ Robert Tremblay _____________________________________ ___________________________________ GERMAIN LAMONDE ROBERT TREMBLAY |
ENGAGEMENTS ENVIRONNEMENTAUX
L'Emprunteur respectera les exigences de toutes les dispositions legislatives et reglementaires visant la protection de l'environnement (les "exigences environnementales") et devra constamment detenir les autorisations, permis et certificats requis par ces dispositions.
L'Emprunteur avisera immediatement la Banque en cas k'emission, de deversement
ou de decouverte de tout contaminant relativement a ses biens, ses activites ou
ceux de toute porpriete voisene. Il devra de plus transmettre a la Banque sans
delai, tout avis, ordonnance ou amende qu'il pourrait recevoir ou etre
condammne a payer relativement aux exigences environnementales se rapportant a
son entreprise ou ses
biens.
Sur demande de la Banque et aux conditions etablies par cette derniere, l'Emprunteur doit, a ses frais, fournit toute information et document que la Banque pourra exiger quant a sa situation environnementale, incluant toute etude ou tout rapport prepare par une firme acceptable a la Banque. Advenant le cas ou ces etudes ou rapports revelaiend un non-respect des exigences
environnementales,
EXHIBIT 10.11
SUMMARY IN ENGLISH
Term Loan Offer, dated March 28,2000, from National Bank of Canada to EXFO Electro-Optical Engineering, Inc., as accepted by EXFO Electro-Optical Engineering on April 3, 2000.
PARTIES: National Bank of Canada ("NBC") and EXFO
Electro-Optical Engineering Inc.
PURPOSE: The term loan (the "Loan") is granted in connection the
project (the "Project") consisting of the acquisition
by EXFO of the immovable property located at 400 Godin
Avenue in Vanier, Quebec, Canada and the development
and improvement of said property. The overall cost of
the Project is estimated at C$6,800,000, out of which
C$1,800,000 is to be financed out of EXFO's working
capital. No substantial changes can be made to the
Project without the prior written consent of NBC.
CREDIT FACILITIES: The agreement provides for a term loan bearing variable
interest rate in the amount of C$5,000,000 to be used
by EXFO prior to September 30,2000 in one or three
disbursements. After that date, any sum which will not
have been advanced to EXFO will cease being available
to EXFO and NBC shall have no further obligation
towards EXFO with respect to any such sum.
TERM: The term (the "Term") of the Loan may vary from
1 to 5 years.
INTEREST RATE: The term loan shall bear interest at the Canadian prime
rate of NBC plus 0.5%. Such interest shall become
payable on the 26th day of each month starting on the
26th day of the month immediately following the unique
or final disbursement of the loan, as the case may be.
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OPTION OF EXFO TO CONVERT THE LOAN BEARING VARIABLE INTEREST RATE INTO A LOAN BEARING A FIXED RATE:
Following the unique or final disbursement, as the case may be, and subject to the prior approval of NBC, EXFO shall have the option to convert the term loan bearing variable interest rate into a term loan bearing fixed interest rate upon a two business day notice to NBC. The fixed interest rate shall be established on the conversion date and shall be equal to the fixed interest rate
offered by NBC on the date of conversion. The term of the term loan bearing fixed interest rate shall be at least one year and at most five years, but in no event shall exceed the Term. At the expiration of the term of the term loan bearing fixed interest rate, EXFO shall have the option to renew such loan at the same conditions subject to the prior approval of NBC. In the event EXFO decides not to exercise its option to renew the term loan bearing fixed interest rate, the loan will resume being a term loan bearing variable interest rate at the conditions described above.
SECURITIES GRANTED BY EXFO:
- An immovable hypothec of first rank in the amount
of $5,000,000 on the immovable property located at
400 Godin Avenue in Vanier, Quebec, Canada.
- Guarantee related to the insurance policy covering
the movables and immovables properties on which
NBC has a secured interest.
PAYMENT OF THE LOAN: EXFO shall reimburse the principal of the loan on
a amortization basis of 120 months through equal and
consecutive monthly payments of C$41,666.67 payable on
the 26th of each month.
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CONDITIONS TO BE MET BY EXFO PRIOR TO DISBURSEMENT:
- Signing by EXFO of all documents required by NBC.
- Registration of all the securities granted to NBC.
- Remittance by EXFO to NBC of all documents related to the Project.
- Remittance by EXFO to NBC of an environmental questionnaire to the entire satisfaction of NBC.
- Remittance by EXFO to NBC of an evaluation report confirming that the market value of the immovable property and the development and improvement of said property is of a minimal amount of C$6,800,000.
- Remittance by EXFO to NBC of a localisation certificate to the entire satisfaction of NBC.
COVENANTS OF EXFO:
- Use the proceeds of the loan in conformity with the Term Loan Offer.
- Carry on its business diligently and without interruption.
- Maintain the books and accounting records in conformity with the General accepted accounting principles.
- Remit to NBC its annual consolidated financial statements within 90 days after the year end.
- Remit to NBC its monthly consolidated financial statements 20 days after the end of each month.
- Permit NBC or its representative to access the premises and examine the books and records of EXFO.
- Maintain a proper insurance coverage for damages related to fire and any other risk generally covered for businesses of the same nature and importance.
- Pay all taxes and other charges of every nature which may be imposed and which payment is guaranteed by a priority or legal hypothec.
- Remit to NBC the proof of payment of the municipal taxes.
- Comply with applicable laws, orders, instructions and licenses of an environmental nature.
NEGATIVE COVENANTS OF EXFO:
Without the prior written approval of NBC, EXFO accepts
and agrees not to do the following:
- Substantially modify the nature of its operations or of its business.
- Allow the control of the business, which is presently held by GEXFO Investissements Technologiques inc., G.Lamonde Investissements Financiers inc. and Fiducie Germain Lamonde, to be modified.
- Merge with another business or undertake any procedures for its dissolution or liquidation.
- Grant securities on any of its movable or immovable properties.
- Grant loans to its officers, directors, shareholders or related persons other than in the normal course of business.
- Grant a subsidy, a surety or any other guarantee to any third person.
- Declare dividends on its shares, other than those budgeted.
- Buy or redeem shares of its share capital.
EVENTS OF DEFAULT BY EXFO:
- Failure to perform any obligations stipulated in the Term Loan Offer.
- Cease to carry on the business, change the nature of its operations or modify the acquisition project described herein above without the prior written consent of NBC.
- Bankruptcy, insolvency, dissolution or winding-up.
- If the movable and immovable properties of EXFO are subject to a seizure by creditor, a trustee, or a liquidator, or are subject to a prior notice of the exercise of a hypothecary right.
- Any representation or warranty is false or incorrect.
- If EXFO is in default pursuant to any agreements with NBC or any other financial institution, or any other creditor having rights against the immovables or movables properties of EXFO.
GOVERNING LAW: Laws of the Province of Quebec, Canada.
[LOGO]
Quebec, le 28 mars 2000
EXFO INGENIERIE ELECTRO-OPTIQUE INC
465, avenue Godin
Vanier, Quebec
G1M 3G7
A l'attention de Monsieur Germain Lamonde, president
Monsieur Lamonde,
La Banque Nationale du Canada (la "Banque") convient de mettre a la disposition de EXFO INGENIERIE ELECTRO-OPTIQUE INC (l'"Emprunteur"), le financement a terme decrit aux presentes, sujet aux termes et conditions ci-apres enonces, a savoir:
FINANCEMENT A TERME $5,000,000.00
LE CREDIT
Sujet aux dispositions des presentes, la Banque met a la disposition de l'Emprunteur, un pret a terme au montant de $5,000,000.00 en dollars canadiens pour financer 78 % maximum de la valeur de l'immeuble 400, ave Godin, Vanier, Quebec de $5,300,000 et 60 % maximum des amenagement $1,500,000.00.
DESCRIPTION DU PROJET
Le projet soumis par l'Emprunteur et dans lequel s'insere le present credit (le "Projet") se resume comme suit:
UTILISATION DES FONDS %
financement de l'acquisition des
biens suivants:
terrain(s) batisse(s): $5,300,000.00 78%
amenagements: $1,500,000.00 22%
Total: $6,800,000.00 100%
============= ====
PROVENANCE DES FONDS
fonds de roulement de l'Emprunteur $1,800,000.00 26%
financement de la Banque: $5,000,000.00 74%
Total: $6,800,000.00 100%
============= ====
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[LOGO]
MODIFICATIONS ET COUT DU PROJET
Aucun changement significatif ne devra etre apporte au Projet sans le consentement prealable ecrit de la Banque. Les fonds provenant de d'autres sources que la Banque devront etre verses et utilises avant le present credit a terme. Tout excedent dans les couts ci-dessus mentionnes devra etre supporte par les actionnaires ou associes de l'Emprunteur, selon le cas, et/ou ses compagnies ou societes affiliees.
TERME
Le pret est consenti pour un terme de 1 a 5 ans.
TAUX D'INTERET
Le present pret a taux variable portera interet, a compter du deboursement et jusqu'a parfait paiement, au taux de base canadien de la Banque majore de .50 %. Les interets sont payables mensuellement le 26ieme jour de chaque mois a compter du 26ieme jour du mois suivant le debourse.
OPTION DE CONVERSION A TAUX FIXE
(applicable au pret a terme a taux variable)
Option: convertible a taux fixe et sujet a la disponibilite des fonds).
Suite au deboursement unique ou au dernier deboursement, selon le cas, l'Emprunteur aura l'option de convertir, en totalite, son credit a terme a taux variable en credit a terme a taux fixe moyennant un preavis d'au moins 2 jours ouvrables a la Banque et sujet aux conditions suivantes:
-- le taux d'interet fixe sera etabli a la date de conversion et sera egal au taux offert par la Banque a la date de la conversion soit le cout des fonds majore de 2.00 %, avec interet au meme taux sur toute somme en arrerages;
-- la periode au taux fixe sera d'au moins 1 an et d'au plus 5 ans sans exceder le terme du present credit;
-- les interets seront payables mensuellement le 26e jour de chaque mois;
-- a l'echeance de la periode au taux fixe choisie par l'Emprunteur et moyennant un preavis de 2 jours ouvrables, l'option a taux fixe peut etre renouvelee par l'Emprunteur sujet aux conditions des presentes, sinon le taux d'interet en vigueur sera le taux variable prevu au sous-paragraphe intitule "Pret a terme a taux variable" ci-dessus.
-- les conversions ou renouvellements a taux fixe sont conditionnels a l'acceptation de la Banque et sujets a la disponibilite des fonds.
DEBOURSEMENT
L'emprunteur utilisera le montant mis a sa disposition au moyen d'un maximum de trois deboursements progressifs correspondants a 78 % de l'immeuble et 60 % des amenagements, avant
taxes, le ou avant le 30 septembre 2000, en satisfaisant aux conditions enumerees aux presentes et en signant tout ecrit qui peut raisonnablement etre demande par la Banque, incluant, sans limitation un billet a terme. Toute somme qui, en vertu du present credit, n'aura pas ete avancee a l'Emprunteur a cette date, cessera alors d'etre disponible a l'Emprunteur et la Banque n'aura plus aucune obligation d'avancer telle somme a l'Emprunteur.
REMBOURSEMENT
L'Emprunteur remboursera le capital du present pret a terme sur une base d'amortissement de 120 mois, au moyen de versements mensuels egaux et consecutifs de $ 41,666.67, lesquels versements sont payables le 26e jour de chaque mois, a compter du mois suivant le dernier deboursement. Le solde en capital, interets, frais et accessoires du pret devra etre rembourse en totalite lors du dernier versement, a savoir, a la date d'echeance du terme sans autre avis ni mise en dermeure.
REMBOURSEMENT PAR ANTICIPATION
PRET A TERME A TAUX VARIABLE
L'Emprunteur pourra rembourser, en tout temps et sans penalite, la totalite ou une partie de sont pret a terme a taux variable, a condition que le remboursement provienne de ses revenus d'operation ou du produit de l'emission de son capital-actions. Si le remboursement provient de toute autre source, une penalite de 3 mois d'interet sur le capital rembourse sera alors exigible et retenue par la Banque a meme le remboursement. Les remboursements partiels seront appliques aux derniers versements de capital et/ou d'interet ou sur toute autre somme due par l'Emprunteur, et ce, a la discretion de la Banque.
PRET A TERME A TAUX FIXE
L'Emprunteur ne pourra rembourser par anticipation, en tout ou en partie, le pret a terme a taux fixe faisant l'objet des presentes. Toutefois, si en vertu de la loi ou autrement, l'Emprunteur etait autorise a effectuer un remboursement par antcipation, alors celui-ci s'engage a payer a la Banque, en meme temps que le remboursement, une somme egale au plus eleve des deux montants suivants soit:
i) trois mois d'interet, calcule sur le montant du remboursement et au taux d'interet du pret;
OU
ii) la perte d'interet sur le capital rembourse par anticipation pendant la periode a courir entre la date du remboursement et la date d'echeance du pret, au taux de l'ecart entre le taux du pret en cours et le taux en vigueur a la Banque a la date du remboursement pour un nouveau pret de meme nature.
La somme payable en vertu du present paragraphe a notamment pour but de compenser la Banque pour la perte de revenus qu'elle subit en raison d'un remboursement avant echeance. Cette somme sera egalement payable si le remboursement est effectue a la suite d'une demande de paiement fondee sur un cas de defaut prevu aux presentes.
SURETES
L'Emprunteur s'engage a ce que l'accomplissement de toutes ses obligations, presentes et futures, envers la Banque incluant, sans limitation, le remboursement des avances consenties en vertu des presentes, le paiement des interets, frais et accessoires prevus aux presentes et aux documents de surete, soit en tout temps garantie par les suretes suivantes, le tout selon la documentation en usage a la Banque et a la satisfaction de cette derniere, a savoir:
Suretes par l'Emprunteur
-- Garantie hypothecaire de premier rang au montant de $5,000,000 et affectant l'immeuble de l'Emprunteur situe 400, avenue Godin, Vanier, Qc.
-- Garantie relative aux polices d'assurances couvrant les biens donnees en garantie a la Banque jusqu'a concurrence de leur pleine valeur assurable;
-- Avenant designant la Banque a titre de beneficiaire de tous les droits, titres et interets dans les benefices et indemnites d'assurance couvrant les biens donnes en garantie a la Banque jusqu'a concurrence de leur pleine valeur assurable.
REPRESENTATIONS ET GARANTIES
L'Emprunteur represente et garantit a la Banque que:
-- il est une entreprise validement constituee, immatriculee et organisee, en regle avec les lois qui le regissent et il detient les pouvoirs, permis et licences necessaires a l'exploitation de son entreprise et a la possession, gestion et administration de ses biens;
-- il n'y a pas de changement defavorable significatif au niveau de sa situation financiere depuis la date des ses derniers etats financiers dates du 31 decembre 1999, remis a la Banque. Ces etats representaient fidelement, a la date de leur confection, sa situation financiere. Ce dernier ne prevoit encourir aucun passif important qui n'aurait pas deja ete divulgue a la Banque;
-- il n'est implique dans aucun litige ou procedure judiciaire susceptible d'affecter de facon significative sa situation financiere ou sa capacite d'exploiter son entreprise;
-- il possede un titre bon et de bonne valeur marchande a l'egard de tous ses biens et proprietes et ceux-ci sont libres de toute priorite, hypotheque, charge ou autre affectation similaire autre que les hypotheques et autres charges consenties anterieurement a la Banque;
-- il n'est pas en defaut en vertu des contrats auxquels il est partie ou de la legislation et de la reglementation applicables a l'exploitation de son entreprise ou a ses biens, incluant, sans limitation, toutes exigences environnementales; et
-- toute taxe, cotisation, prelevement, impot ou autre redevance dont le paiement est garanti par priorite ou hypotheque legale a ete paye par l'Emprunteur, sans subrogation ni consolidation.
CONDITIONS PREALABLES AU DEBOURSEMENT DES FONDS
Avant tout deboursement du present credit, les conditions suivantes devront avoir ete remplies a la satisfaction de la Banque, a savoir:
-- l'Emprunteur et la(les) caution(s), le cas echeant, devront avoir satisfait a toutes les conditions des presentes et signe tout document ou ecrit que la Banque pourra raisonnablement requerir dans le but de donner plein effet aux dispositions des presentes;
-- toutes les suretes devront avoir ete dument publiees selon le rang ci-dessus mentionne, toute autre formalite requise devra avoir ete accomplie, le cas echeant, et aucun evenement que la Banque juge defavorable ne devra etre survenu dans la nature du risque;
-- l'Emprunteur devra avoir remis a la Banque tous les documents requis relatifs au Projet, incluant sans limitation, une confirmation de toute subvention, des copies de tout contrat, acte de vente et/ou offre d'achat dument signee, convention, soumission ou acte relatif au Projet une preuve satisfaisante a la Banque des mises de fonds requises;
-- l'Emprunteur devra avoir remis a la Banque tout autre document, certificat et opinion que celle-ci pourra raisonnablement requerir, incluant, sans limitation, tout document constitutif relatif a l'Emprunteur et la caution, et tout document et opinion relatifs aux biens hypotheques, le cas echeant;
et sans restreindre la generalite de ce qui precede:
-- l'Emprunteur devra fournir le questionnaire environnemental a l'entiere satisfaction de la Banque;
-- l'Emprunteur devra presente a la Banque un rapport d'evaluation agree par nos evaluateurs confirmant la valeur marchande (minimum de $6,800,000) comprenant batisse et amenagement;
-- l'Emprunteur devra fournir a la Banque le certificat de localisation a l'entiere satisfaction de la Banque apres l'accomplissement des travaux;
ENGAGEMENTS D'EXECUTION
Pendant toute la duree du present financement, l'Emprunteur:
-- utilisera le produit du financement aux fins prevues aux presentes:
-- exploitera son entreprise de facon diligente et continue;
-- tiendra des livres de comptes adequats et autres registres comptables conformes aux principes comptables generalement reconnus;
-- fournira a la Banque, en double exemplaires, ses etats financiers annuels consolides verifies dans un delai de 90 jours de la fin de son exercice financier;
-- fournira a la Banque, en double exemplaires, ses etats financiers interimaires consolides et detailles, sur une base mensuelle, au plus tard le 20 du mois suivant;
-- donnera en tout temps aux representants designes par la Banque le droit de visite et d'acces a ses etablissements et le droit d'examiner ses livres de comptes et autres registres et d'en prendre des extraits ou d'en faire des copies;
-- maintiendra, en tout temps, sur ses biens, une couverture d'assurance pour pertes ou dommages attribuables au feu et a tout autre risque contre lequel des entreprises de meme nature et d'importance comparable s'assurent generalement;
-- paiera ponctuellement toute taxe, cotisation, prelevement, impot ou autre redevance dont le paiement est garanti par priorite ou hypotheque legale, sans subrogation ni consolidation;
-- fournira a la Banque annuellement copie du(des) compte(s) de taxes demontrant la(les) preuve(s) d'acquittement relatif a l'immeuble finance.
-- fournira a la Banque tout autre document que celle-ci pourra raisonnablement requerir;
-- transigera la totalite ou la plus grande partie de ses affaires bancaires avec la Banque.
ENGAGEMENTS RESTRICTIFS
L'Emprunteur s'engage a ne pas executer, sans le consentement ecrit prealable de la Banque, les operations ou transactions suivantes:
-- modifier substantiellement la nature de ses operations ou affaires;
-- permettre que soit modifie le controle de son entreprise lequel est presentement, directement ou indirectement, detenu par Gexfo Investissements Technologiques Inc, Lamonde Holding et Lamonde in Trust;
-- se fusionner avec une autre entreprise ou entreprendre des procedures pour sa dissolution ou liquidation corporative;
-- creer ou permettre l'existence de suretes sur ses biens presents et futurs;
-- consentir des avances a ses dirigeants, administrateurs, actionnaires ou personnes liees autrement que dans le cours normal de ses affaires;
-- consentir une aide financiere, un investissement, un cautionnement ou une garantie pour le compte d'un tiers;
-- declarer ou verser des dividendes sur ses actions; (autres que ceux figurant aux projections)
-- acheter ou racheter ses actions ou autrement reduire son capital.
ENGAGEMENTS ENVIRONNEMENTAUX
L'Emprunteur respectera les exigences de toutes les dispositions legislatives et reglementaires visant la protection de l'environnement (les "exigences environnementales") et devra constamment detenir les autorisations, permis et certificats requis par ces dispositions.
L'Emprunteur avisera immediatement la Banque en cas d'emission, de deversement ou de decouverte de tout contaminant relativement a ses biens, ses activites ou ceux de toute propriete voisine. Il devra de plus transmettre a la Banque sans delai, tout avis, ordonnance ou amende qu'il pourrait recevoir ou etre condammne a payer relativement aux exigences environnementales se rapportant a son entreprise ou ses biens.
Sur demande de la Banque et aux conditions etablies par cette derniere, l'Emprunteur doit, a ses frais, fournir toute information et document que la Banque pourra exiger quant a sa situation environnementale, incluant toute etude ou tout rapport prepare par une firme acceptable a la Banque. Advenant le cas ou ces etudes ou rapports revelaient un non-respect des exigences environnementales, l'Emprunteur devra proceder aux travaux necessaires pour rendre son entreprise et ses biens conformes, dans un delai acceptable a la Banque.
L'Emprunteur s'engage a indemniser la Banque pour tout dommage que celle-ci pourrait subir ou toute responsabilite qu'elle pourrait encourir en raison du non-respect des exigences environnementales.
Les dispositions, engagements et indemnisations prevus au present article continueront d'avoir plein effet nonobstant la radiation des suretes et/ou le remboursement complet et final de toute somme due par l'Emprunteur a la Banque.
DEFAUT
CAS DE DEFAUT
La survenance d'un ou de plusieurs des evenements ci-dessous enumeres constitue un cas de defaut en vertu des presentes:
-- si l'Emprunteur est en defaut d'effectuer un versement de capital ou de payer tous interets, frais et accessoires ou toute autre somme payable en vertu des presentes ou des documents de surete, sur demande ou lorsque du et exigible;
-- si l'Emprunteur fait defaut d'accomplir toute autre de ses obligations en vertu des presentes, des documents de surete ou de tout autre document y afferent;
-- si l'Emprunteur ou l'une ou l'autre des cautions, le cas echeant, pour quelque raison que ce soit, cesse d'exploiter tout ou une partie importante de son entreprise, change la nature de ses operations ou affaires, modifie le Projet sans l'autorisation prealable ecrite de la Banque ou si un evenement defavorable important survient dans leur situation financiere;
-- si l'Emprunteur et/ou l'une ou l'autre des cautions, la cas echeant, devient insolvable, en faillite ou en liquidation, fait cession de ses biens pour le benefice de ses creanciers, depose une proposition concordataire ou un avis d'intention de deposer telle proposition ou si un evenement defavorable important survient dans la situation financiere ou les operations de l'Emprunteur;
-- s'il y a depot par l'Emprunteur et/ou l'une ou l'autre des cautions, le cas echeant, ou un tiers de toute procedure ayant trait a l'Emprunteur ou l'une ou l'autre des cautions ou leurs operations, relativement a toute dissolution, liquidation, reorganisation, composition, arrangement ou rajustement de dettes;
-- si les biens de l'Emprunteur et/ou de l'une ou l'autre des cautions, le cas echeant, ou une partie importante de ceux-ci, selon l'opinion de la Banque, font l'objet d'une prise de possession par un creancier, syndic, sequestre, liquidateur ou fiduciaire ou font l'objet d'un preavis d'exercise d'un droit hypothecaire, d'un avis de retrait de perception des creances ou sont saisis;
-- si l'Emprunteur et/ou l'une ou l'autre des cautions est, le cas echeant, en defaut, aux termes de toute autre entente, contrat ou ecrit avec la Banque ou avec une autre banque ou institution financiere ou tout autre creancier detenant des droits sur les biens de l'Emprunteur et/ou de l'une ou l'autre des cautions, le cas echeant;
-- si quelque representation ou garantie faite par l'Emprunteur et/ou l'une ou l'autre des cautions, le cas echeant, aux presentes, dans un document de surete ou tout autre document remis a la Banque pour les fins de la presente offre de financement s'avere incorrecte, erronee ou inexacte;
-- si toute caution, actuelle ou future, avise la Banque qu'elle met fin, diminue ou autrement modifie ou ne respecte pas ses obligations en vertu des presentes, des documents de surete ou de tout autre document y relatif.
DROITS ET RECOURS DE LA BANQUE EN CAS DE DEFAUT
Sous reserve de ses autres droits et recours, advenant un cas de defaut:
-- la Banque pourra reclamer de l'Emprunteur et/ou de l'une ou l'autre des cautions, le cas echeant, sans autre avis ni mise en demeure, en plus du capital, des interests, frais et accessoires, tous les frais encourus par la Banque pour le recouvrement et la protection de sa creance, et l'execution de toute autre obligation de l'Emprunteur et/ou de l'une ou l'autre des cautions;
-- toute somme percue ou recue par la Banque, incluant le solde de tout produit de realisation des suretes, pourra etre retenue par la Banque et pourra, au gre de la Banque, etre imputee a l'egard de toute partie de la dette de l'Emprunteur envers la Banque.
Les dispositions precedentes trouveront application nonobstant le fait que l'un ou l'autre des porteurs ou beneficiaires de lettres de credit, lettres de garantie ou d'acceptations de banque n'ait pas demande paiement en tout ou en partie ou ait demande paiement partiel seulement a la Banque.
FRAIS ET HONORAIRES
Des frais d'etude de dossiers et/ou d'engagement de $6,000.00 sont payables au moment de l'acceptation de la presente offre de financement. Ces frais ne sont pas remboursables.
Tous les honoraires et frais juridiques pour la preparation et la publication des documents de surete et de toute autre documentation y afferente sont a la charge de l'Emprunteur, que le financement soit complete ou non.
DISPOSITIONS DIVERSES
DEFINITIONS
Aux fins des presentes, les termes et expressions ci-apres enumeres doivent etre definis comme suit:
-- "TAUX DE BASE CANADIEN": signifie le taux d'interet annuel variable que la Banque annonce publiquement de temps a autre et a partir duquel elle determine les taux d'interet applicables aux prets commerciaux en dollars canadiens consentis par la Banque au Canada.
-- "TAUX OFFERT": signifie le taux d'interet annuel determine de temps a autre par la Banque pour la periode choisie par l'Emprunteur, comme etant le taux d'interet fixe applicable aux prets a terme commerciaux a taux fixe consentis par la Banque, au Canada, pour une periode identique.
TERMES COMPTABLES
Chaque terme comptable utilise dans la presente offre a la signification qui lui est donnee conformement aux principes comptables generalement reconnus par l'Institut canadien des comptables agrees.
DEBIT DU COMPTE
L'Emprunteur autorise irrevocablement la Banque a debiter de temps a autre ou periodiquement tout compte bancaire qu'il maintient a la Banque de facon a acquitter en tout ou en partie les sommes qu'il peut devoir a la Banque en vertu des presentes.
REGISTRES
La Banque tiendra des registres ou donnees informatisees faisant etat des transactions effectuees en vertu des presentes. Ces registres ou donnees informatisees seront presumes refleter ces transactions et constitueront une preuve concluante de la dette due a la Banque.
CESSION
Aucun droit ou obligation de l'Emprunteur en vertu des presentes ni aucun montant du credit ne peut etre transfere ou cede par l'Emprunteur. Toute cession ou transfert fait a l'encontre de cette exigence sera nul en autant que la Banque est concernee et rendra toute avance, a l'option de la Banque, due et exigible et degagera la Banque de toute obligation de faire quelque versement ou avance ulterieur.
CALCUL DE L'INTERET ET DES ARRERAGES
Sauf si autrement prevu aux presentes, tout interet sur des sommes dues est calcule quotidiennement et non a l'avance sur la base d'une annee de 365 jours.
Pour les fins de la Loi sur l'interet (Canada), dans le cas d'une annee bissextile, le taux d'interet annuel auquel l'interet calcule sur la base de 365 jours est equivalent et egal aux taux d'interet ainsi calcule multiple par 366 et divise par 365.
Toute somme qui ne serait pas payee a echeance, de principal, d'interet, de commission, d'escompte ou de toute autre nature, portera interet au taux prevu aux presentes pour la portion non payee du pret
etant entendu que le taux de l'interet ainsi payable sur arrerages ne pourra exceder le taux maximum prevu par la loi, le cas echeant.
L'interet sur arrerages sera compose mensuellement et payable sur demande.
JOUR NON OUVRABLE
Si la date prevue pour un versement de capital ou d'interet en vertu des presentes n'est pas un jour ouvrable, tel versement devra etre effectue le premier jour ouvrable suivant.
ENTENTE FINALE
Une fois acceptee et signee par l'Emprunteur, la presente offre de financement constituera l'entente finale entre les parties, sauf modifications ecrites ulterieures consenties par ces dernieres et remplacera toute entente verbale ou ecrite anterieure entre les parties relativement au financement decrit aux presentes.
Nonobstant ce qui precede, la presente offre de financement ne cree pas novation ni derogation aux droits, hypotheques et recours de la Banque aux termes des actes, billets et documents de surete requis aux termes des presentes et signes par l'Emprunteur ou la caution anterieurement aux presentes. L'Emprunteur reconnait et declare, par les presentes, que les hypotheques, droits et recours de la Banque en vertu desdits actes, billets et documents de surete n'ont pas ete modifies et qu'ils garantissent ses obligations aux termes des presentes.
AUTRES DOCUMENTS
L'Emprunteur et les cautions, le cas echeant, doivent accomplir tout acte et signer tout document juge necessaire ou utile par la Banque pour donner plein effet aux termes, conditions, engagements et suretes consentis ou a etre consentis en vertu des presentes.
SOLIDARITE
Si plusieurs personnes sont designees comme l'Emprunteur ou la caution, chacune d'elle est solidairement responsable des obligations stipulees aux presentes et dans les documents de surete.
ACCES A L'INFORMATION
L'Emprunteur autorise, par les presentes, tout agent de renseignements personnels, institution financiere, creancier, autorite fiscale, employeur ou toute autre personne, incluant tout organisme public, detenant des renseignements concernant l'Emprunteur ou ses biens, notamment des renseignements d'ordre financier ou relatifs a tout engagement ou cautionnement de l'Emprunteur, a fournir ces renseignements a la Banque, afin de verifier l'exactitude de toute information fournie ou qui sera fournie de temps a autre a la Banque et s'assurer en tout temps de la solvabilite de l'Emprunteur.
LOI APPLICABLE
La presente offre de financement devra etre regie et interpretee selon les lois de la province de Quebec.
DELAI D'ACCEPTATION DE L'OFFRE DE FINANCEMENT
L'offre de financement devra etre acceptee par l'Emprunteur au plus tard le 14 avril 2000 en signant et nous retournant la copie ci-jointe faute de quoi, la Banque se reserve le droit d'annuler ou de modifier la presente offre de financement, et ce, de facon unilaterale.
Nous vous remercions de l'opportunite que vous nous avez donnee d'etudier votre demande et soyez assure que nous serons toujours disponibles pour discuter de vos besoins additionnels ou pour vous fournir tout renseignement de nature a vous aider dans vos operations bancaires en general.
Veuillez agreer, Monsieur Lamonde, l'expression de nos sentiments les meilleurs.
BANQUE NATIONALE DU CANADA
/s/ Alain Gallichan /s/ Yves Lachance
------------------------- ---------------------
Alain Gallichan Yves Lachance
Directeur de comptes senior Directeur de comptes
523-4742
|
ACCEPTATION
Nous declarons avoir pris connaissance de la presente offre de renouvellement et additionnelle datee du 28 mars 2000 et en acceptons les termes, modalites et conditions.
Signe a Vanier, province de Quebec, ce 3 avril 2000.
EXFO INGENIERIE ELECTRO-OPTIQUE INC
Par : ---------------------------- Par : ---------------------------------
EXHIBIT 10.12
DEMAND PROMISSORY NOTE
, 2000
$23,736,747 Vanier, Quebec
EXFO Electro-Optical Engineering Inc./EXFO Ingenierie Electro-Optique inc. ("EXFO") promises to pay on demand to GEXFO Investissements Technologiques Inc. the sum of $23,736,747 in lawful money of Canada, the whole without interest thereon.
This promissory note is non-assignable.
EXFO INGENIERIE ELECTRO-OPTIQUE INC./
EXFO ELECTRO-OPTICAL ENGINEERING INC.
Per : ______________________________________
Germain Lamonde
EXHIBIT 10.13
FORM OF REGISTRATION RIGHTS AGREEMENT
among
EXFO ELECTRO-OPTICAL ENGINEERING INC.,
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.,
G. LAMONDE INVESTISSEMENTS FINANCIERS INC.,
FIDUCIE GERMAIN LAMONDE
and
MR. GERMAIN LAMONDE
Dated as of June _, 2000
TABLE OF CONTENTS
Page
1. Certain Definitions..................................................... 1
1.1. "Canadian Securities Laws".................................... 1
1.2. "Subordinate Voting Shares"................................... 1
1.3. "Multiple Voting Shares"...................................... 2
1.4. "Multiple Voting Share Permitted Transferee".................. 2
1.5. "Commission".................................................. 2
1.6. "Exchange Act"................................................ 2
1.7. "Fair Market Value"........................................... 2
1.8. "Holder" or "Holders"......................................... 2
1.9. "Person"...................................................... 2
1.10. "Registrable Securities"...................................... 3
1.11. "Securities Act".............................................. 3
1.12. "Voting Shares"............................................... 3
2. Contravention of Canadian Securities Laws............................... 3
3. Registration Rights..................................................... 3
3.1. Demand Registration........................................... 3
3.2. Piggyback Registration........................................ 6
3.3. Allocation of Securities Included in Registration Statement... 7
3.4. Registration Procedures....................................... 8
3.5. Registration Expenses......................................... 14
3.6. Certain Limitations on Registration Rights.................... 14
3.7. Limitations on Sale or Distribution of Other Securities....... 15
3.8. No Required Sale.............................................. 15
3.9. Indemnification............................................... 16
4. Underwritten Offering................................................... 19
4.1. Requested Underwritten Offering............................... 19
4.2. Piggyback Underwritten Offering............................... 20
5. General................................................................. 20
5.1. Adjustments Affecting Registrable Securities.................. 20
5.2. Rule 144...................................................... 20
5.3. Preparation; Reasonable Investigation......................... 21
5.4. Nominees for Beneficial Owners................................ 21
5.5. Amendments and Waivers........................................ 21
5.6. Notices....................................................... 21
5.7. Miscellaneous................................................. 22
Page
5.8. No Inconsistent Agreements.................................... 23
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of June [o], 2000 (this "Agreement"), among EXFO ELECTRO-OPTICAL ENGINEERING INC., a company formed pursuant to the Canada Business Corporations Act (the "Company"), GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC. ("GEXFO"), G. LAMONDE INVESTISSEMENTS FINANCIERS INC. ("GLIF"), FIDUCIE GERMAIN LAMONDE ("FGL") and MR. GERMAIN LAMONDE ("Mr. Lamonde"). GEXFO, GLIF, FGL and Mr. Lamonde and their permitted assignees are collectively referred to herein as the "Lamonde Group."
This Agreement is made in connection with the initial public offering (the "IPO") by the Company of Subordinate Voting Shares (as defined below). Members of the Lamonde Group hold or from time to time will hold Multiple Voting Shares (as defined below), which are convertible at any time at the option of the holder into Subordinate Voting Shares. In connection with the IPO, the Company has agreed to grant registration rights in the United States to the members of the Lamonde Group with respect to the Registrable Securities (as defined below), on the terms and subject to the conditions set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the meanings ascribed to them below:
1.1. "Canadian Securities Laws" means Canadian provincial securities laws, including, without limitation, the Securities Act (British Columbia), the Securities Act (Alberta), The Securities Act, 1988 (Saskatchewan), the Securities Act (Manitoba), the Securities Act (Ontario), the Securities Act (Quebec), the Security Frauds Prevention Act (New Brunswick), the Securities Act (Nova Scotia), the Securities Act (Prince Edward Island), the Securities Act, 1990 (Newfoundland), and any and all regulations, policy statements, rules, blanket orders, administrative practices and general decisions thereunder, as the same may be amended and replaced from time to time.
1.2. "Subordinate Voting Shares" means the Subordinate Voting Shares of the Company and any and all securities of any kind whatsoever of the Company which may be issued after the date hereof in respect of, or in exchange for, Subordinate Voting Shares pursuant to an amalgamation, consolidation, share subdivision, share consolidation, share dividend or recapitalization of the Company or otherwise, including Subordinate Voting Shares issued upon conversion of any Multiple
Voting Shares whether at the option of the holder of such Multiple Voting Shares or otherwise.
1.3. "Multiple Voting Shares" means the Multiple Voting Shares of the Company and any and all securities of any kind whatsoever of the Company which may be issued after the date hereof in respect of, or in exchange for, Multiple Voting Shares pursuant to an amalgamation, consolidation, share subdivision, share consolidation, share dividend or recapitalization of the Company or otherwise.
1.4. "Multiple Voting Share Permitted Transferee" includes only those persons who are permitted transferees under that certain Trust Agreement, dated June [o], 2000, among the Company, the Lamonde Group and CIBC Mellon Trust Company, as trustee.
1.5. "Commission" means the U.S. Securities and Exchange Commission.
1.6. "Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.
1.7. "Fair Market Value" means (i) if the Subordinate Voting Shares
are listed or admitted to trading on any national securities
exchange in the United States, the average of the closing prices
of the Subordinate Voting Shares on the principal securities
exchange in the United States on which the Subordinate Voting
Shares are traded for the 30 consecutive trading days immediately
preceding the date on which such determination is to be made,
(ii) if the Subordinate Voting Shares are not then listed or
admitted to trading on any such national securities exchange, the
average of the last reported sale prices (regular session) of the
Subordinate Voting Shares as reported by the Nasdaq Stock Market
("Nasdaq") for the 30 consecutive trading days immediately
preceding the date on which such determination is made (or, if no
sales have occurred during such period, the average of the
reported high bid and low asked prices), and (iii) if the
Subordinate Voting Shares are not then listed or admitted to
trading on any such national securities exchange and no such
reported sale price or bid and asked prices are available from
Nasdaq, the value as determined in good faith by the Company's
board of directors.
1.8. "Holder" or "Holders" means any party who is a signatory to this Agreement and any party who shall hereafter acquire and hold Registrable Securities and to whom rights have been assigned under this Agreement pursuant to Section 5.7(a) hereof.
1.9. "Person" means any natural person, corporation, partnership, firm, association, trust, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.
1.10. "Registrable Securities" means any Subordinate Voting Shares held by any Holder and any Subordinate Voting Shares issued or issuable in respect of any Multiple Voting Shares or other securities held by any Holder. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement or (ii) such securities shall have been sold (other than in a privately negotiated sale) pursuant to Rule 144 (or any successor provision) under the Securities Act.
1.11. "Securities Act" means the U.S. Securities Act of 1933, as amended.
1.12. "Voting Shares" means the Subordinate Voting Shares and Multiple Voting Shares, collectively, and any and all securities of any kind whatsoever of the Company which may be issued after the date hereof in respect of, or in exchange for, Voting Shares of the Company pursuant to an amalgamation, consolidation, share subdivision, share consolidation, share dividend or recapitalization of the Company or otherwise.
2. Canadian Securities Law Matters.
The Company shall use its reasonable best efforts to prepare or obtain any prospectus, registration or other exemptions in Canada which, in the reasonable opinion of counsel to the Company, are necessary, or would facilitate the Company's ability, to honor any registration rights hereunder. The Company shall not be obligated to respect any registration rights hereunder to the extent that such registration rights would contravene any Canadian Securities Laws.
3. Registration Rights.
3.1. Demand Registration.
(a) (i) Subject to Section 3.1(b) below, at any time and from time to time after the IPO, the Lamonde Group, acting together through one member of the Lamonde Group (Mr. Lamonde or his designee) shall have the right to require the Company to register under the Securities Act and any applicable state securities or
"blue sky" laws all or part of their Registrable Securities, by delivering a written request therefor to the Company specifying the number of Registrable Securities to be included in such registration and the intended method of distribution thereof. All requests pursuant to this Section 3.1(a)(i) are referred to herein as "Demand Registration Requests," and the registrations requested are referred to herein as "Demand Registrations." As promptly as practicable, but no later than ten days after receipt of a Demand Registration Request, the Company shall give written notice of such Demand Registration Request to all Holders of record of Registrable Securities.
(ii) The Company, subject to Sections 3.3 and 3.6 below, shall include in a Demand Registration (A) the Registrable Securities of the Holder(s) which requested such registration and (B) the Registrable Securities of any Holder which shall have made a written request to the Company for registration thereof (which request shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder) within 30 days after the receipt of written notice pursuant to clause (i) (or 15 days if, at the request of the Holder(s) which requested such registration, the Company states in such written notice or gives telephonic notice to all Holders, with written confirmation to follow promptly thereafter, that such registration will be on Form S-3, Form F-3 or Form F-10 (or equivalent registration forms then in effect)).
(iii) The Company shall, as expeditiously as possible
following a Demand Registration Request, use its
reasonable best efforts to (A) effect such
registration under the Securities Act (including,
without limitation, by means of (i) a shelf
registration pursuant to Rule 415 under the
Securities Act if so requested and if the Company
is then eligible to use such a registration or
(ii) a registration under the Multi-jurisdictional
Disclosure System ("MJDS") if so requested and if
the Company is then eligible to use such
registration) of the Registrable Securities which
the Company has been so requested to register, for
distribution in accordance with such intended
method of distribution and (B) if requested by the
Holder(s) which requested such registration,
obtain acceleration of the effective date of the
registration statement relating to such
registration.
(b) The demand registration rights granted to the Holders in
Section 3.1(a) are subject to the following limitations: (i)
each Demand Registration must include Registrable Securities
having an aggregate market value of at least
U.S.$10,000,000, which market value shall be determined by
multiplying the number of Registrable Securities to be
included in such Demand Registration by the Fair Market
Value determined as of the date the Demand Registration
Request in respect of such Demand Registration is made;
provided that the limitations set forth in this clause
(i) shall not be in effect at any time the Holders'
Registrable Securities may not be sold pursuant to Rule 144
under the Securities Act because of the Company's failure to
comply with the information requirements thereunder, unless
at such time, the
Company's outside counsel (which shall be reasonably
acceptable to Mr. Lamonde if such Holder is a member of the
Lamonde Group) delivers a written opinion of counsel to such
Holder proposing to register Registrable Securities to the
effect that such Holder's Registrable Securities may be
publicly offered and sold without registration under the
Securities Act); (ii) the Lamonde Group may only make a
demand for registration pursuant to Section 3.1(a)(i) once
within any twelve consecutive month period; (iii) the
Company shall not be required to cause a registration
pursuant to Section 3.1(a)(i) to be declared effective
within a period of 180 days after the effective date of any
other registration statement of the Company effected in
connection with an underwritten offering by the Company;
(iv) if the Board of Directors of the Company, in its good
faith judgment, determines that any registration of
Registrable Securities should not be made or continued
because it would materially interfere with any material
financing, acquisition, corporate reorganization or
amalgamation or other transaction involving the Company or
any of its subsidiaries (a "Valid Business Reason"), (A) the
Company may postpone filing a registration statement
relating to a Demand Registration Request until such Valid
Business Reason no longer exists, but any such delay cannot
exceed three months, and (B) in case a registration
statement has been filed relating to a Demand Registration
Request, if the Valid Business Reason has not resulted from
actions taken by the Company, the Company may cause such
registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such
registration statement, and the Company shall give written
notice of its determination to postpone or withdraw a
registration statement and of the fact that the Valid
Business Reason for such postponement or withdrawal no
longer exists, in each case, promptly after the occurrence
thereof; and (v) from and after such time as members of the
Lamonde Group beneficially own, in the aggregate, less than
10% of the outstanding Voting Shares, the Company shall only
be required to effect one Demand Registration at the request
of the Lamonde Group; provided, that any Demand Registration
requested by the Lamonde Group at such time shall not count
as the one Demand Registration permitted by this subclause
(v) if, immediately after giving effect to such
registration, and due to the allocation provisions of
Section 3.3(a) below, the Lamonde Group beneficially owns,
in the aggregate, 5% or more of the outstanding Voting
Shares. If the Company shall give any notice of postponement
or withdrawal of any registration statement, the Company
shall not, during the period of postponement or withdrawal,
register any Voting Shares, other than pursuant to a
registration statement on such form or similar form(s)
solely for registration of securities in connection with an
employee benefit plan or dividend reinvestment plan or an
amalgamation or consolidation. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the
Company that the Company has determined to withdraw any
registration statement pursuant to clause (iv) above, such
Holder will discontinue its disposition of Registrable
Securities pursuant to such registration statement and, if
so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the prospectus
covering such Registrable Securities that was in effect at
(c) The Company, subject to Sections 3.3 and 3.6 below, may
elect to include in any registration statement and offering
made pursuant to Section 3.1(a), authorized but unissued
Voting Shares or Voting Shares held by the Company as
treasury shares; provided, that such inclusion shall be
permitted only to the extent that it is pursuant to and
subject to the terms of the underwriting agreement or
arrangements, if any, entered into by the Holders exercising
the demand registration rights granted to the Holders under
Section 3.1(a).
(d) The lead managing underwriter (the "Lead Underwriter") for any Demand Registration shall be selected by the party or parties making the demand for such registration; provided, that such underwriter shall be an investment banking firm of national reputation unaffiliated with such parties and reasonably satisfactory to the Company.
3.2. Piggyback Registration.
(a) If, at any time, the Company proposes or is required to register any of its equity securities (including pursuant to any registration statement which generally registers equity and debt securities without specifying the type of security or the amount) under the Securities Act (other than pursuant to (i) registrations on such form or similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or an amalgamation or consolidation or (ii) a Demand Registration under Section 3.1) on a registration
statement on Form S-1, Form S-2, Form S-3, Form F-1,
Form F-2 or Form F-3 (or an equivalent general registration
form then in effect), whether or not for its own account,
the Company shall give prompt written notice of its
intention to do so to each of the Holders of record of
Registrable Securities. Upon the written request of any
Holder, made within 15 days following the receipt of any
such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of
by such Holder and the intended method of distribution
thereof), the Company shall, subject to Sections 3.2(b), 3.3
and 3.6 below, use its reasonable best efforts to cause all
such Registrable Securities, the Holders of which have so
requested the registration thereof, to be registered under
the Securities Act and applicable state securities or "blue
sky" laws (with the securities which the Company at the time
proposes to register) to permit the sale or other
disposition by the Holders (in accordance with the intended
method of distribution thereof) of the Registrable
Securities to be so registered. No registration effected
under this Section 3.2(a) shall relieve the Company of its
obligations to effect registrations upon request under
Section 3.1.
(b) If, at any time after giving written notice of its intention to register any equity securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such equity securities, the Company may, at its election, give written notice of such determination to all Holders of record of Registrable Securities and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such abandoned registration, and (ii) in case of a determination to delay such registration of its equity securities, shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other equity securities, in each case, without prejudice, however, to the rights of Holders under Section 3.1.
(c) Any Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section 3.2 by giving written notice to the Company of its request to withdraw; provided, however, that (i) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, a Holder shall no longer have any right to include Registrable Securities in the registration as to which such withdrawal was made.
3.3. Allocation of Securities Included in Registration Statement.
(a) If any requested registration pursuant to Section 3.1 involves an underwritten offering and the Lead Underwriter shall advise the Company that, in its view, the number of securities requested to be included in such registration (including those securities requested by the Company to be included in such
registration) exceeds the largest number (the "Section 3.1 Sale Number") that can be sold in an orderly manner in such offering within a price range acceptable to the Holders of Registrable Securities proposed to be registered, the Company shall include in such registration:
(i) all Registrable Securities requested to be
included in such registration by Holders of
Registrable Securities; provided, however, that if
the number of such Registrable Securities exceeds
the Section 3.1 Sale Number, the number of such
Registrable Securities (not to exceed the Section
3.1 Sale Number) to be included in such
registration shall be allocated on a pro rata
basis among all Holders requesting that
Registrable Securities be included in such
registration, based on the number of Registrable
Securities then owned by each Holder requesting
inclusion in relation to the number of Registrable
Securities owned by all Holders requesting
inclusion; and
(ii) to the extent that the number of Registrable Securities to be included by all Holders is less than the Section 3.1 Sale Number, securities that the Company proposes to register.
If, as a result of the proration provisions of this
Section 3.3(a), any Holder shall not be entitled to include all
Registrable Securities in a registration that such Holder has
requested to be included, such Holder may elect to withdraw his
request to include Registrable Securities in such registration or
may reduce the number requested to be included; provided,
however, that (x) such request must be made in writing prior to
the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such
registration and (y) such withdrawal shall be irrevocable and,
after making such withdrawal, a Holder shall no longer have any
right to include Registrable Securities in the registration as to
which such withdrawal was made.
(b) If any registration pursuant to Section 3.2 involves an underwritten offering and the Lead Underwriter shall advise the Company that, in its view, the number of securities requested to be included in such registration exceeds the number (the "Section 3.2 Sale Number") that can be sold in an orderly manner in such registration within a price range acceptable to the Company, the Company shall include in such registration:
(i) all Voting Shares or securities convertible into, or exchangeable or exercisable for, Voting Shares that the Company proposes to register for its own account (the "Company Securities"); and
(ii) to the extent that the number of Company Securities is less than the Section 3.2 Sale Number, all Registrable Securities requested
to be included by all Holders; provided, however, that, if the number of such Registrable Securities exceeds the Section 3.2 Sale Number less the number of Company Securities, then the number of such Registrable Securities included in such registration shall be allocated on a pro rata basis based on the number of Registrable Securities owned by each Holder requesting inclusion in relation to the number of Registrable Securities owned by all Holders requesting inclusion.
3.4. Registration Procedures. If and whenever the Company is required by the provisions of this Agreement to use its reasonable best efforts to effect or cause the registration of any Registrable Securities under the Securities Act and applicable state securities or "blue sky" laws as provided in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement on an appropriate registration form of the Commission for the disposition of such Registrable Securities in accordance with the intended method of disposition thereof, which form (i) shall be selected by the Company; provided, however, that the Company shall clear a prospectus under any Canadian Securities Laws and elect to use an MJDS form if so requested and if the Company is eligible to use such form and (ii) shall, in the case of a shelf registration, be available for the sale of the Registrable Securities by the selling Holders thereof and such registration statement shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and the Company shall use its reasonable best efforts to cause such registration statement to become and remain effective (provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under state securities or "blue sky" laws, the Company will furnish to the counsel of any Holder participating in the planned offering and the underwriters, if any, copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the reasonable review and reasonable comment of such counsel, and the Company shall not file any registration statement or amendment thereto or any prospectus or supplement thereto to which the holders of a majority of the Registrable Securities covered by such registration statement or the underwriters, if any, shall reasonably object in writing);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective until the
earlier of (i) such time as all of such Registrable
Securities and other securities have been disposed of in
accordance with the intended methods of disposition by the
sellers thereof as set forth in such registration statement
and (ii) such period (which shall not be required to exceed
150 days in the case of a registration pursuant to Section
3.1 or 120 days in the case of a registration pursuant to
Section 3.2, unless reasonably
requested by any underwriter pursuant to an underwritten offering) as any seller of Registrable Securities pursuant to such registration statement shall reasonably request and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement;
(c) as soon as reasonably possible furnish, without charge, to each seller of such Registrable Securities and each underwriter, if any, of the securities covered by such registration statement such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits), and the prospectus included in such registration statement (including each preliminary prospectus) in conformity with the requirements of the Securities Act, and other documents, as such seller and underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable laws of each such registration statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) by each such seller of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);
(d) use its reasonable best efforts to register or qualify the
Registrable Securities covered by such registration
statement under such state securities or "blue sky" laws as
any sellers of Registrable Securities or the Lead
Underwriter, if any, shall reasonably request, and do any
and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or
underwriter, if any, to consummate the disposition of the
Registrable Securities in any such jurisdiction, except that
in no event shall the Company be required to qualify to do
business as a foreign corporation in any jurisdiction where
it would not, but for the requirements of this paragraph
(d), be required to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;
(e) notify each Holder selling Registrable Securities covered by such registration statement and the Lead Underwriter, if any: (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement has been filed and, with respect to the registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any state securities authority for amendments or supplements to the registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; (iv) of
the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under applicable state securities or "blue sky" laws or the initiation of any proceeding for such purpose; (v) of the existence of any fact of which the Company becomes aware which results in the registration statement, the prospectus related thereto or any document incorporated therein by reference containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading; and (vi) if at any time the representations and warranties contemplated by Section 4 below cease to be true and correct in all material respects and, if the notification relates to an event described in clause (v), the Company shall promptly prepare and furnish to each such seller and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders, as soon as reasonably practicable after the effective date of the registration statement (and in any event within 16 months thereafter), an earnings statement (which need not be audited) covering the period of at least twelve consecutive months beginning with the first day of the Company's first calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) (i) cause all such Registrable Securities covered by such registration statement to be listed on the principal stock exchange or automated quotation system on which similar securities issued by the Company are then listed or quoted, if the listing of such Registrable Securities is then permitted under the rules of such exchange or automated quotation system, or (ii) if no similar securities are then so listed or quoted, cause all such Registrable Securities to be listed on a national securities exchange or secure Nasdaq National Market authorization for such shares and, without limiting the generality of the foregoing, take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the Lead Underwriter's arranging for the registration of at least two market makers as such with respect to such shares with the National Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;
(i) enter into such customary agreements (including, if applicable, an underwriting agreement) and take such other actions as the designated member of the Lamonde Group (initially Mr. Lamonde or his designee) shall reasonably request in order to facilitate the disposition of such Registrable Securities; provided, that the underwriting agreement, if any, shall be reasonably satisfactory in form and substance to the Company. The Holders of the Registrable Securities which are to be distributed by such underwriters shall be parties to such underwriting agreement and may, at their option, require that the Company make to and for the benefit of such Holders the representations, warranties and covenants of the Company which are being made to and for the benefit of such underwriters and which are of the type customarily provided to institutional investors in secondary offerings;
(j) obtain an opinion from the Company's counsel and a "cold comfort" letter from the Company's regular independent chartered accountants in customary form and covering such matters as are customarily covered by such opinions and "cold comfort" letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the underwriters, if any, and the designated member of the Lamonde Group (initially Mr. Lamonde or his designee) and furnish to each Holder participating in the offering and to each underwriter, if any, a copy of such opinion and letter addressed to such Holder or underwriter;
(k) deliver promptly to each Holder participating in the offering and each underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement, other than those portions of any such correspondence and memoranda which contain information subject to attorney-client privilege with respect to the Company, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter, if any, participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;
(l) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not later than the effective date of the registration statement;
(n) make reasonably available its employees and personnel and otherwise provide reasonable assistance to the underwriters (taking into account the needs of the Company's businesses and the requirements of the marketing process) in the marketing of Registrable Securities in any underwritten offering;
(o) prior to the filing of any document which is to be incorporated by reference into the registration statement or the prospectus (after the initial filing of such registration statement), provide copies of such document to counsel to the selling holders of Registrable Securities and to the underwriters, if any, and make the Company's representatives reasonably available for discussion of such document and make such changes in such document prior to the filing thereof as counsel for such selling holders or underwriters may reasonably request;
(p) furnish to each Holder participating in the offering and the underwriters, if any, without charge, at least one signed copy of the registration statement and any post-effective amendments thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);
(q) cooperate with the selling holders of Registrable Securities and the Lead Underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the selling holders of Registrable Securities at least three business days prior to any sale of Registrable Securities; and
(r) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities.
The Company may require as a condition precedent to the Company's obligations under this Section 3.4 that each seller of Registrable Securities as to which any registration is being effected furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request; provided, that such information shall be used only in connection with such registration.
Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of this Section 3.4, such Holder will discontinue such Holder's disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by paragraph (e) of this
Section 3.4 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the prospectus covering such Registrable Securities
that was in effect at the time of receipt of such notice. In the event the
Company shall give any such notice, the applicable period mentioned in paragraph
(b) of this Section 3.4 shall be extended by the number of days during such
period from and including the date of the giving of such notice to and including
the date when each seller of any Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by paragraph (e) of this Section 3.4.
If any such registration statement or comparable statement under "blue sky" laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company or (ii) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel, required by the Securities Act or any similar federal statute or any applicable state securities or "blue sky" laws then in force, the deletion of the reference to such Holder.
3.5. Registration Expenses. The Company shall, whether or not any
registration pursuant to this Agreement becomes effective, pay
all expenses incident to the Company's performance of or
compliance with this Article 3, including (i) Commission, stock
exchange or NASD registration and filing fees and all listing
fees, (ii) fees and expenses of compliance with applicable state
securities or "blue sky" laws and in connection with the
preparation of a "blue sky" survey, including without limitation,
reasonable fees and expenses of "blue sky" counsel, (iii)
printing and engraving expenses, (iv) messenger and delivery
expenses, (v) internal expenses (including, without limitation,
all salaries and expenses of the Company's officers and employees
performing legal and accounting duties), (vi) fees and
disbursements of counsel for the Company, (vii) with respect to
each registration, the fees and disbursements of one Canadian
counsel and one U.S. counsel for the selling Holders (selected by
the Holders making the Demand Registration Request, in the case
of a registration pursuant to Section 3.1, and selected by the
Holders of a majority of the Registrable Securities included in
such registration, in the case of a registration pursuant to
Section 3.2, (viii) fees and disbursements of all independent
chartered accountants (including the expenses of any audit and/or
"cold comfort" letter) and fees and expenses of other persons,
including special experts, retained by the Company and
(ix) any other fees and disbursements of underwriters, if any, customarily paid by issuers or sellers of securities. Notwithstanding the foregoing, (i) the provisions of this Section 3.5 shall be deemed amended to the extent necessary to cause these expense provisions to comply with applicable laws and regulations and stock exchange rules and (ii) in connection with any registration hereunder, each Holder of Registrable Securities being registered shall pay all underwriting discounts and commissions and any capital gains, income or transfer taxes, if any, attributable to such Holder's Registrable Securities.
3.6. Certain Limitations on Registration Rights. In the case of any registration under Section 3.1 pursuant to an underwritten offering, or in the case of a registration under Section 3.2 if the Company has determined to enter into an underwriting agreement in connection therewith, all Registrable Securities to be included in such registration shall be subject to an underwriting agreement and no person may participate in such registration unless such person agrees to sell such person's securities on the basis provided therein and completes and/or executes all questionnaires, indemnities, lock-ups, underwriting agreements and other documents (other than powers of attorney), in each case in customary form and substance, which must be executed in connection therewith.
3.7. Limitations on Sale or Distribution of Other Securities.
(a) If requested in writing by the Company or the Lead Underwriter, if any, of any registration effected pursuant to Section 3.1 or 3.2, each Holder of Registrable Securities agrees not to effect any public sale or distribution, including any sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities, or of any other equity security of the Company or of any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering) during the time period reasonably requested by the Lead Underwriter, not to exceed 180 days, and the Company hereby also so agrees (except that the Company may effect any sale or distribution of any such securities pursuant to a registration on such form or similar form(s) solely for registration in connection with an employee benefit plan or dividend reinvestment plan or a merger, amalgamation or consolidation) and agrees to use its reasonable efforts to cause each holder of any equity security or of any security convertible into or exchangeable or exercisable for any equity security of the Company purchased from the Company at any time other than in a public offering so to agree.
(b) The Company hereby agrees that if it shall previously have received a request for registration pursuant to Section 3.1 or 3.2, and if such previous registration shall not have been withdrawn or abandoned, the Company shall not, without the prior written consent of the Lead Underwriter of such previous registration, effect any registration of any of its securities under the Securities Act
(other than a registration on such form or similar form(s)
solely for registration in connection with an employee
benefit plan or dividend reinvestment plan or a merger,
amalgamation or consolidation) or under any applicable state
securities or "blue sky" laws, whether or not for sale for
its own account, until a period 180 days shall have elapsed
from the effective date of such previous registration and
the Company shall so provide in any registration rights
agreements hereafter entered into with respect to any of its
securities.
3.8. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities pursuant to any effective registration statement.
3.9. Indemnification.
(a) In the event of any registration of any securities of the Company under the Securities Act pursuant to this Article 3, the Company will, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, the seller of any Registrable Securities covered by such registration statement, its directors, officers, fiduciaries, employees, trustees and shareholders or general and limited partners (and the directors, officers, employees and shareholders thereof), each other Person who participates as an underwriter in the offering or sale of such securities, each officer, director, employee, shareholder or partner of such underwriter and each other Person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act, against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) in respect thereof ("Claims") and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company's consent, which consent shall not be unreasonably withheld or delayed) to which each such indemnified party may become subject under the Securities Act or otherwise, insofar as such Claims or expenses arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such securities were registered under the Securities Act or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus or any amendment or supplement thereto, together with the documents incorporated by reference therein, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any violation by the Company of any U.S. federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are incurred; provided, that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim or expense arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in such registration statement or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use therein. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in
the securities as to which any registration under Section
3.1 or 3.2 is being effected (and, if the Company requires
as a condition to including any Registrable Securities in
any registration statement filed in accordance with Section
3.1 or 3.2, any underwriter) shall, severally and not
jointly, indemnify and hold harmless (in the same manner and
to the same extent as set forth in paragraph (a) of this
Section 3.9) to the extent permitted by law the Company, its
officers and directors, each Person controlling the Company
within the meaning of the Securities Act and all other
prospective sellers and their directors, officers, general
and limited partners and respective controlling Persons with
respect to any untrue statement or alleged untrue statement
of any material fact in, or omission or alleged omission of
any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information
furnished to the Company or its representatives by or on
behalf of such Holder or underwriter specifically stating
that it is for use in such registration statement,
preliminary, final or summary prospectus or amendment or
supplement thereto or document incorporated by reference
into any of the foregoing; provided, however, that the
aggregate amount which any such Holder shall be required to
pay pursuant to this Section 3.9(b) and Sections 3.9(c) and
(e) shall be limited to the amount of the net proceeds
received by such person upon the sale of the Registrable
Securities pursuant to the registration statement giving
rise to such claim. Such indemnity shall remain in full
force and effect regardless of any investigation made by or
on behalf of such indemnified party and shall survive the
transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding paragraphs (a) and (b) of this Section 3.9 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any applicable state securities and "blue sky" laws or any filings made under any applicable Canadian Securities Laws.
(d) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of
the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to
this Section 3.9, but the failure of any indemnified party
to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of
this Section 3.9, except to the extent the indemnifying
party is materially prejudiced thereby and shall not relieve
the indemnifying party from any liability which it may have
to any indemnified party otherwise than under this Article
3. In case any action or proceeding is brought against an
indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the
reasonable opinion of outside counsel to the indemnified
party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other
indemnifying party similarly notified, to the extent that it
chooses, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of
the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party
shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that
(i) if the indemnifying party fails to take reasonable steps
necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified
party that the indemnified party believes it has failed to
do so, (ii) if such indemnified party who is a defendant in
any action or proceeding which is also brought against the
indemnifying party reasonably shall have concluded that
there may be one or more legal defenses available to such
indemnified party which are not available to the
indemnifying party, or (iii) if representation of both
parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct, then, in any
such case, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but
with no more than one firm of counsel for all indemnified
parties in each jurisdiction, except to the extent any
indemnified party or parties reasonably shall have concluded
that there may be legal defenses available to such party or
parties which are not available to the other indemnified
parties or to the extent representation of all indemnified
parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses
therefor. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless
such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all
liability arising out
of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or
is insufficient to hold harmless an indemnified party under
Sections 3.9(a), (b) or (c), then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of any Claim in such
proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand
and the indemnified party on the other from such offering of
securities. If, however, the allocation provided in the
immediately preceding sentence is not permitted by
applicable law, or if the indemnified party failed to give
the notice required by subsection (d) above and the
indemnifying party is materially prejudiced thereby, then
each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits
but also the relative fault of the indemnifying party, on
the one hand, and the indemnified party, on the other hand,
as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section
3.9(e) were to be determined by pro rata allocation or by
any other method of allocation which does not take account
of the equitable considerations referred to in the preceding
sentences of this Section 3.9(e). The amount paid or payable
in respect of any Claim shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such
Claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Notwithstanding anything in this Section 3.9(e) to the
contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 3.9(e) to
contribute any amount in excess of the net proceeds received
by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims,
damages or liabilities of the indemnified parties relate,
less the amount of any indemnification payment made pursuant
to Sections 3.9(b) and (c).
(f) The indemnity agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party.
(g) The indemnification and contribution required by this
Section 3.9 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense,
as and when bills are received or expense, loss, damage or
liability is incurred.
4. Underwritten Offering.
4.1. Requested Underwritten Offering. If requested by the underwriters for any underwritten offering by the Holders pursuant to a registration requested under Section 3.1, the Company shall enter into a customary underwriting agreement with the underwriters. Such underwriting agreement shall be satisfactory in form and substance to the Holders which requested such registration and shall contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities and contribution agreements. Any Holder participating in the offering shall be a party to such underwriting agreement and may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Holder. Such underwriting agreement shall also contain such representations, warranties and indemnities by the participating Holders as are customary in agreements of that type.
4.2. Piggyback Underwritten Offering. In the case of a registration pursuant to Section 3.2 hereof, if the Company shall have determined to enter into any underwriting agreements in connection therewith, all of the Holders' Registrable Securities to be included in such registration shall be subject to such underwriting agreements. Any Holder participating in such registration may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Holder. Such underwriting agreement shall also contain such representations, warranties and indemnities by the participating Holders as are customary in agreements of that type.
5. General.
5.1. Adjustments Affecting Registrable Securities. The Company agrees that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any Registrable Securities to include such Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration. The Company agrees that it will take all reasonable steps necessary to effect a subdivision of shares if in the reasonable judgment of (a) the Holder of Registrable Securities that makes a Demand Registration Request and (b) the Lead Underwriter, such subdivision would enhance the marketability of the Registrable Securities.
5.2. Rule 144. The Company covenants that it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities Act), and will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.
5.3. Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give the Holders participating in the offering, their underwriters, if any, and their respective counsel, accountants and other representatives and agents the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and, to the extent practicable, each amendment thereof or supplement thereto, and give each of them reasonable access to its books and records and properties and such opportunities to discuss the business of the Company and such other matters with the Company's directors, officers and employees and the independent chartered accountants who have certified its financial statements, and the Company will supply, or cause its directors, officers, employees and independent chartered accountants to supply, all other information reasonably requested by each of them, as shall be reasonably necessary or appropriate, in the opinion of the Holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.
5.4. Nominees for Beneficial Owners. If Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders of Registrable Securities pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Securities held by any Holder or Holders of Registrable
Securities contemplated by this Agreement); provided, that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership.
5.6. Amendments and Waivers. This Agreement may be amended, modified, supplemented or waived only upon the written agreement of the party against whom enforcement of such amendment, modification, supplement or waiver is sought; provided, that the written agreement of the holders of a majority of the Registrable Securities held by the Lamonde Group shall be considered to be signed by all members of the Lamonde Group.
5.6. Notices. Except as otherwise provided in this Agreement, notices
and other communications under this Agreement shall be in writing
and delivered personally, by telecopy (with confirmation sent
within three business days by overnight courier) or by overnight
courier, addressed to the Company at 465 Godin Avenue, Vanier,
Quebec G1M 3G7, Canada (telecopier: (418) 683-2170) (Attention:
Chief Financial Officer), and to Mr. Lamonde on behalf of the
members of the Lamonde Group at c/o EXFO Electro-Optical
Engineering Inc., 465 Godin Avenue, Vanier, Quebec G1M 3G7,
Canada (telecopier: (418) 683-2170), in each case with a copy to
Fasken Martineau DuMoulin LLP, at 800 Victoria Square, Suite
3400, P.O. Box 242, Montreal, Quebec H4Z 1E9, Canada (telecopier:
(514) 397-7600) (Attention: Robert Pare, Esq.) and to Paul,
Weiss, Rifkind, Wharton & Garrison at 1285 Avenue of the
Americas, New York, NY 10019, U.S.A. (telecopier: (212) 757-3990)
(Attention: Edwin S. Maynard, Esq.). Each Holder, by written
notice given to the Company in accordance with this Section 5.6,
may change the address to which such notice or other
communications are to be sent to such Holder. All such notices
and communications shall be deemed to have been received on the
date of delivery thereof, if delivered by hand, the next day
after the sending thereof, if by overnight courier and when
receipt is acknowledged, if telecopied.
5.7. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto, whether so expressed or not. No Person other than a Holder shall be entitled to any benefits under this Agreement, except as otherwise expressly provided herein. This Agreement and the rights of the parties hereunder may be assigned by any of the parties hereto to any transferee of Registrable Securities who is a Multiple Voting Share Permitted Transferee.
(b) This Agreement (with the documents referred to herein or delivered pursuant hereto) embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York without giving effect to the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. All section references are to this Agreement unless otherwise expressly provided.
(e) This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.
(f) Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
(g) It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.
(h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
5.8. No Inconsistent Agreements. Without the prior written consent of the Lamonde Group, initially through Mr. Lamonde or his designee, neither the Company nor any Holder will, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted in this Agreement or otherwise conflicts with the provisions hereof, other than any lock-up agreement with the underwriters in connection with any registered offering effected hereunder, pursuant to which the Company shall agree not to register for sale, and the
Company shall agree not to sell or otherwise dispose of, Voting Shares or any securities convertible into or exercisable or exchangeable for Voting Shares, for a specified period following the registered offering. The Company shall not grant any other Person registration rights without the written consent of the Holders holding at least a majority of the Registrable Securities held by all of the Holders. If the Company shall at any time hereafter provide to any holder of any securities of the Company rights with respect to the registration of such securities and such rights are provided on terms or conditions more favorable to such holder than the terms or conditions applicable to the Holders herein, the Company shall provide (by way of amendment to this Agreement or otherwise) such more favorable terms or conditions to the Holders under this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above.
EXFO ELECTRO-OPTICAL ENGINEERING, INC.
By: ________________________________________
Name:
Title:
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
By: ________________________________________
Name:
Title:
G. LAMONDE INVESTISSEMENTS
FINANCIERS INC.
By: _________________________________________
Name:
Title:
FIDUCIE GERMAIN LAMONDE
By: _________________________________________
Name:
Title:
EXHIBIT 10.14
SUMMARY IN ENGLISH
Sale Agreement entered into as of September 1, 1999 between 9080-9823 Quebec inc. and GEXFO Investissements Technologiques inc.
TRANSACTION: GEXFO Investissements Technologiques inc. ("GEXFO") sells, assigns and transfers to 9080-9823 Quebec Inc. ("9080-9823") the following assets:
- pre-paid expenses: CDN$26,000;
- investments: CDN$3,001,900, including a CDN$2,000,000 advance to EXFO Electro-Optical Engineering Inc.;
- buildings: CDN$1,868,000.
In addition, 9080-9823 assumes debts of GEXFO totalling CDN$52,900.
PRICE: CDN$4,844,100 paid by the issuance to GEXFO of
4,844,100 Class "B" Shares of 9080-9823.
GOVERNING LAW: Laws of the Province of Quebec, Canada.
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CONTRAT DE VENTE INTERVENU EN DATE DU 1er SEPTEMBRE 1999
INTERVENU ENTRE: 9080-9823 QUEBEC INC., compagnie legalement constituee,
ayant son siege social au 465, rue Godin, Vanier,
Quebec, province de Quebec, G1M 3G7, agissant et
representee aux presentes par son president, monsieur
Germain Lamonde, dument autorise tel qu'il le declare;
(Ci-apres designee l'"Acheteur")
ET: GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., compagnie
legalement constituee, ayant son siege social au 465,
rue Godin, Vanier, Quebec, province de Quebec, G1M 3G7,
agissant et representee aux presentes par son
president, monsieur Germain Lamonde, dument autorise
tel qu'il le declare;
(Ci-apres designee le "Vendeur")
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1. LES PARTIES CONVIENNENT DE CE QUI SUIT :
1.1 Le Vendeur vend, cede et transfert a l'Acheteur, ce acceptant, les actifs suivants, meubles et immeubles, avec garantie legale, sous reserve des dispositions du paragraphe 5.1.3, et assume les dettes suivantes du Vendeur a l'entiere exoneration du Vendeur, aux prix, conditions et modalites ci-apres convenus :
Actif a court terme
Frais payes d'avance 26 000
Placements
Avance a EXFO Ingenierie 2 000 000
Comptes de placements en fonds mutuels 951 000
Depots a long terme 50 000 3 001 900
---------
Immeubles
Immeuble rue Godin 818 000
Immeuble rue Nolin 1 050 000 1 868 000
---------
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Dette assumee
Taxes a remettre 12 000
Taxes sur le capital 23 500
Autres dettes 16 400 51 900
------ ------
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Ces biens etant ci-apres designes "les Actifs et les dettes". Tel et dans l'etat ou le tout se trouve a la date des presentes, sans aucune restriction ou reserve de la part du Vendeur et sans plus ample inventaire.
1.2 Il existe un lien de dependance entre le Vendeur et l'Acheteur au sens qui est donne a cette expression dans la Loi de l'impot sur le revenu (Canada) et dans la Loi sur les impots (Quebec).
1.3 Le Vendeur et l'Acheteur ont l'intention de transferer les Actifs pour une contrepartie egale a la juste valeur marchande des Actifs au et a cette fin, le prix de vente dont il est fait mention ci-dessous reflete ce que le Vendeur et l'Acheteur considerent etre la juste valeur marchande des Actifs a la date des presentes.
1.4 Le Vendeur et l'Acheteur conviennent de plus que le prix de vente dont il est fait mention ci-dessous pourra etre rajuste selon la valeur etablie par les autorites fiscales federale ou provinciale ou par les tribunaux competents, le cas echeant.
1.5 Le Vendeur et l'Acheteur desirent egalement que cette vente soit soumise aux termes et conditions ci-apres mentionnes et notamment aux dispositions de roulement contenues dans la Loi de l'impot sur le revenu (Canada) et dans la Loi sur les impots (Quebec).
2. PRIX DE VENTE :
2.1 La presente vente est faite pour la consideration totale de quatre millions huit cent quarante-quatre mille cent dollars (4 844 100 $) ventilee et payable par l'emission et la repartition au Vendeur de quatre millions huit cent quarante-quatre mille cent (4 844 100) actions categorie B emises par l'Acheteur a meme son capital-actions pour un capital verse total de quatre millions huit cent quarante-quatre mille cent dollars (4 844 100 $), ayant les caracteristiques suivantes :
a) votantes;
b) non-participantes;
c) rachetables au gre des detenteurs ou de la compagnie;
d) donnant droit a un dividende non cumulatif de 1/6 de 1% par mois.
2.2 Le Vendeur declare avoir recu le certificat numero B-1 representant les 4 844 100 actions categorie "B" du capital-actions de l'Acheteur et dont quittance pour autant.
2.3 Les parties conviennent que la repartition du prix de vente entre les divers elements d'actif et de passif sera confirmee sur la base des etats financiers du Vendeur au 31 aout 1999. Dans les 180 jours suivant la date de la signature des presentes, le Vendeur et l'Acheteur devront confirmer le prix de vente des elements d'actif et de passif, la portion du prix de vente mentionnee a l'article 2.1, la valeur de rachat des actions de categorie "B" et la repartition du prix de vente.
3. ROULEMENT
3.1 Le Vendeur et l'Acheteur declarent expressement se prevaloir des dispositions de roulement contenues au paragraphe 85(1) de la Loi de l'impot sur le revenu (Canada) et l'article 518 de la Loi sur les impots (Quebec) et s'engagent de plus a signer tout document et a faire toute chose necessaire aux fins de se conformer aux exigences de ces lois a cet egard.
3.2 Le Vendeur et l'Acheteur conviennent de plus que le montant ou la somme convenue en vertu des dispositions de roulement sera egal au cout indique du bien, au sens qui est donne a cette expression dans la Loi de l'impot sur le revenu (Canada) ou la Loi sur les impots (Quebec).
3.3 En raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, il est entendu et convenu que si la juste valeur marchande des Actifs vendus par les presentes, telle qu'etablie par les autorites fiscales competentes, soit le ministere du Revenu national (Canada) et le ministere du Revenu (Quebec), ou par les tribunaux competents dans le cas ou le litige serait porte par les parties devant ces tribunaux, differait de la valeur de la contrepartie qui est stipulee a l'article 2 des presentes, ou si la valeur de realisation des biens transferes etait differente de celle prevue a l'article 2 des presentes, alors l'Acheteur apportera les corrections appropriees en modifiant la valeur de rachat en raison du choix effectue conformement aux dispositions du paragraphe 123.49 de la Loi sur les compagnies du Quebec (26(3) de la Loi canadienne sur les societes par actions), soit :
a) en l'(les) augmentant de facon a tenir compte de la difference qui pourra exister dans le cas ou la juste valeur marchande etablie par
les autorites fiscales ou les tribunaux competents, selon le cas, serait plus elevee que le prix indique a l'article 2; ou
b) en le(les) diminuant de facon a tenir compte de la difference qui pourra exister dans le cas ou la juste valeur marchande etablie par les autorites fiscales ou les tribunaux competents, selon le cas, serait moindre que le prix indique a l'article 2.
3.4 En raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, il est egalement entendu et convenu que si la valeur marchande des Actifs vendus par les presentes, telle qu'etablie par les autorites fiscales competentes, soit le ministere du Revenu national (Canada) et le ministere du Revenu (Quebec), ou par les tribunaux competents dans le cas ou le litige serait porte par les parties devant ces tribunaux, differait de la valeur indiquee sur les formules de roulement appropriees, l'Acheteur et le Vendeur s'engagent a modifier et amender ces formules de facon a se conformer a la decision des autorites fiscales ou des tribunaux competents selon le cas.
3.5 Le Vendeur et l'Acheteur declarent expressement se prevaloir du choix
offert en vertu de l'article 85(1) de la Loi de l'impot sur le revenu
(Canada) ainsi que de l'article 518 de la Loi sur les impots (Quebec)
et s'engagent de plus a signer tout document et a faire toute chose
necessaire aux fins de se conformer aux exigences de cette loi a cet
egard.
4. TAXES
4.1 Toute taxe de vente qui pourrait etre exigible en raison des presentes sera acquittee par l'Acheteur. En raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, le Vendeur convient de faire tout ce qui sera requis, de concert avec l'Acheteur, pour que l'Acheteur soit exempte du paiement de la T.P.S. et de la T.V.Q. a l'egard de la presente vente.
5. REPRESENTATIONS ET GARANTIES DE L'ACHETEUR:
5.1 L'Acheteur represente et garantit ce qui suit:
5.1.1. L'Acheteur est une compagnie subsistante et valide, legalement constituee par certificat de constitution sous l'autorite des lois de la province de Quebec et possedant le pouvoir d'acheter les biens vendus.
5.1.2 Le conseil d'administration a regulierement et validement
autorise l'execution de la presente transaction.
5.1.3 Il a vu et examine a son entiere satisfaction les Actifs et les
Dettes, s'en declare satisfait et n'exige aucune garantie quant
a la qualite et l'etat desdits Actifs et Dettes. De plus,
l'Acheteur accepte que l'hypotheque publiee au Bureau de la
publicite des droits de la circonscription fonciere de Quebec
sous le numero 1605884 continue de grever l'immeuble vendu
jusqu'a l'echeance des obligations qu'elle garantit,
obligations qui toutefois continuent a etre acquittees par le
Vendeur.
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6. DECLARATION DU VENDEUR
6.1 Le Vendeur, par les presentes, declare et garantit a l'Acheteur :
6.1.1 que le Vendeur est une compagnie subsistante et valide,
legalement constituee par certificat de constitution sous
l'autorite des lois de la province de Quebec et possedant le
pouvoir de vendre les biens vendus ;
6.1.2 qu'aucune personne, entreprise ou corporation n'a de convention
ou option ou droits susceptibles de devenir une convention ou
option pour l'achat de tout ou d'une partie des Actifs ;
6.1.3 qu'il n'y a aucune reclamation, action, poursuite ou procedure
intentee, pendante ou menacee contre le Vendeur qui peut ou qui
pourrait affecter les droits du Vendeur, son titre ou interet
dans les Actifs ou dans toute partie de ceux-ci ;
6.1.4 qu'il a obtenu l'autorisation de ses creanciers, lorsque
requis, aux fins des presentes.
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6.2 Les representations et garanties enoncees au paragraphe 6.1 des presentes auront force au-dela de la date des presentes et demeureront en vigueur pour le benefice de l'Acheteur et ses ayants-droits.
7. POSSESSION ET PROPRIETE DE L'ACHETEUR
7.1 L'Acheteur est considere avoir la possession physique et legale, ainsi que la propriete de tout ce qui fait l'objet de la presente vente a compter du 1er septembre 1999.
8. AJUSTEMENTS
8.1 Les parties conviennent d'effectuer les ajustements d'usage comme en date des presentes. Si d'autres ajustements sont necessaires, ils seront effectues comme a la meme date.
8.2 Aucune representation ou garantie faite par le Vendeur contenue au present contrat ou autrement faite par le Vendeur en rapport avec la transaction enoncee aux presentes, ne contient une fausse declaration de faits ou n'omet d'enoncer un fait necessaire pour eviter que telle transaction n'induise en erreur.
9. CONTRAT DE VENTE D'IMMEUBLE
9.1 Aux seules fins de la publicite fonciere et sans pour autant alterer les dispositions des presentes quant a la vente des Actifs et l'assumation des Dettes, les parties conviennent de signer une convention de vente d'immeuble distincte simultanement a la signature des presentes.
10. CLAUSES INTERPRETATIVES
10.1 Selon que le contexte le requerra, tout mot ecrit au singulier comprend aussi le pluriel et vice versa, et tout mot ecrit au genre masculin comprend aussi le genre feminin.
10.2 Le present contrat est regi par les Lois de la province de Quebec.
10.3 Le present contrat lie les Parties aux presentes, leurs representants legaux et ayants-droits.
10.4 Chacun des articles ou paragraphes du present contrat sera interprete separement et l'invalidite de l'un d'entre eux n'aura pas pour effet d'invalider la totalite de ce contrat.
10.5 Les titres des articles et paragraphes du present contrat n'y sont inseres que pour faciliter la lecture et ne peuvent servir a l'interpreter.
EN FOI DE QUOI, les parties aux presentes ont signe le present contrat a Quebec, province de Quebec, le 1er septembre 1999.
LE VENDEUR : GEXFO INVESTISSEMENTS
TECHNOLOGIQUES INC.
Par :
Germain Lamonde
----------------------------------------
Germain Lamonde, president
L'ACHETEUR : 9080-9823 QUEBEC INC.
Par :
Germain Lamonde
----------------------------------------
Germain Lamonde, president
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CONVENTION DE VENTE SOUS SEING PRIVE
ENTRE : GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC., personne
morale de droit prive, legalement constituee en vertu
de la Partie 1A de la Loi sur les compagnies, ayant son
siege social au 465, rue Godin, Vanier, province de
Quebec, G1M 3G7, agissant aux presentes et ici
representee par monsieur Germain Lamonde, president,
dument autorise aux fins des presentes en vertu d'une
resolution des administrateurs datee du 1er septembre
1999 ;
(Ci-apres nommee le "Vendeur")
ET : 9080-9823 QUEBEC INC., personne morale de droit prive,
legalement constituee en vertu de la Partie 1A de la
Loi sur les compagnies, ayant son siege social au 465,
rue Godin, Vanier, province de Quebec, G1M 3G7,
agissant aux presentes et ici representee par monsieur
Germain Lamonde, president, dument autorise aux fins
des presentes en vertu d'une resolution des
administrateurs datee du 1er septembre 1999 ;
(Ci-apres nommee l'"Acheteur")
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ATTENDU que les parties ont signe ce jour une convention de vente d'actifs et d'assumation de dettes ;
ATTENDU qu'aux seules fins de publicite fonciere et sans pour autant alterer les dispositions de la susdite convention de vente d'actifs et d'assumation de dettes, les parties ont convenu de signer et d'executer la presente convention de vente ;
EN CONSEQUENCE, LES PARTIES CONVIENNENT DE CE QUI SUIT :
1. OBJET
1.1 Le Vendeur vend a l'Acheteur, ce acceptant, l'immeuble ci-apres designe :
Designation
1.1.1 Un immeuble connu et designe comme etant forme des lots
suivants :
- Le lot originaire numero QUATRE MILLE QUATRE CENT VINGT-TROIS
(4423) du cadastre officiel de la paroisse de Saint-Sauveur,
circonscription fonciere de Quebec.
- Le lot originaire numero CINQ MILLE QUATRE CENT VINGT-ET-UN
(5421) du cadastre officiel de la paroisse de Saint-Sauveur,
circonscription fonciere de Quebec.
Avec batisse dessus construite, portant le numero civique 436,
rue Nolin, a Ville de Vanier, province de Quebec, G1M 1E7,
circonstances et dependances.
1.1.2 Un immeuble connu et designe comme etant forme des lots
suivants :
- La subdivision TROIS du lot originaire numero QUATRE MILLE
SEPT CENT VINGT-SIX (4726-3) du cadastre officiel de la
paroisse de Saint-Sauveur, circonscription fonciere de Quebec.
- Le lot originaire numero QUATRE MILLE QUATRE CENT NEUF (4409)
du cadastre officiel de la paroisse de Saint-Sauveur,
circonscription fonciere de Quebec.
- La subdivision DEUX du lot originaire numero CINQ MILLE TROIS
CENT SOIXANTE-TREIZE (5373-2) du cadastre officiel de la
paroisse de Saint-Sauveur, circonscription fonciere de Quebec.
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Avec batisse dessus construite, portant le numero civique 465, avenue Godin, a Ville de Vanier, province de Quebec, G1M 3G7, circonstances et dependances.
2. PRIX
2.1 La presente vente est faite pour le prix de un million huit cent soixante-huit mille dollars (1 868 000 $), reparti et payable par l'emission et la repartition au Vendeur de un million huit cent soixante-huit mille (1 868 000) actions categorie B emises par l'Acheteur a meme son capital-actions et d'une valeur de 1,00 $ chacune, ayant les caracteristiques suivantes :
a) votantes ;
b) non-participantes ;
c) rachetables au gre des detenteurs ou de la compagnie ;
d) donnant droit a un dividende non cumulatif de 1/6 de 1% par mois.
2.2 Le prix de vente est reparti comme suit :
2.2.1 Immeuble rue Nolin (art. 1.1.1)
Terrain : 200 000 $ Batisses : 850 000 $
2.2.2 Immeuble rue Godin (art. 1.1.2)
Terrain : 200 000 $ Batisses : 684 000 $
2.3 Le Vendeur declare avoir recu le certificat numero B-1 representant les actions categorie "B" du capital-actions de l'Acheteur et dont quittance pour autant.
3. SERVITUDE ET BAUX
3.1 Le lot numero 4423 ci-avant designe est greve d'une servitude et de deux baux publies au Bureau de la publicite des droits de la circonscription fonciere de Quebec respectivement sous les numeros 1212738, 1465274 et 1461580, ladite servitude et lesdits baux etant mentionnes a l'acte d'hypotheque ci-apres decrit.
4. HYPOTHEQUE
4.1 Le lot numero 4423 ci-avant designe est greve d'une hypotheque en faveur de la Banque Nationale du Canada pour un montant de 1 100 000,00 $, laquelle a ete publiee le 10 avril 1996 au Bureau de la publicite des droits de la circonscription fonciere de Quebec sous le numero 1605884, recue devant Me Vallier Villeneuve, notaire, le 9 avril 1996.
4.2 L'Acheteur accepte que l'hypotheque susdite continue de grever l'immeuble jusqu'a l'echeance des obligations qu'elle garantit, obligations qui toutefois continuent a etre acquittees par le Vendeur.
5. GARANTIE
5.1 La presente vente est faite avec garantie legale mais sans aucune garantie quant a la qualite et l'etat des immeubles vendus et sous reserve de l'hypotheque mentionnee a l'article 4.1 ci-devant.
6. POSSESSION
6.1 L'Acheteur devient proprietaire de l'immeuble a compter du 1er septembre 1999 et avec possession et delivrance a compter de la meme date.
7. L'ORIGINE DU DROIT DE PROPRIETE
7.1 Le Vendeur est proprietaire de l'immeuble vendu comme suit :
7.1.1. Il est proprietaire du lot 5421 du susdit cadastre pour l'avoir
acquis de Ville de Vanier, suivant acte recu devant Mme Sylvie
Villeneuve, notaire, le 3 decembre 1998, sous le numero 857 de
ses minutes et publie au Bureau de la publicite des droits de
la circonscription fonciere de Quebec sous le numero 1 690 315;
7.1.2 Il est proprietaire des lots 5373-2 et 4726-3 du susdit
cadastre pour les avoir acquis de Ville de Vanier,
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7.1.3 Il est proprietaire du lot 4409 du susdit cadastre pour l'avoir
acquis de la Banque Royale du Canada, suivant acte recu devant
Me Gaston Lacoursiere, notaire, le 6 decembre 1991, sous le
numero 18223 de ses minutes et publie au Bureau de la publicite
des droits de la circonscription fonciere de Quebec le 9
decembre 1991, sous le numero 1443968.
8. ROULEMENT
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8.1 Le Vendeur et l'Acheteur declarent expressement se prevaloir des dispositions de roulement contenues au paragraphe 85(1) de la Loi de l'impot sur le revenu (Canada) et a l'article 518 de la Loi sur les impots (Quebec) et s'engagent de plus a signer tout document et a faire toute chose necessaire aux fins de se conformer aux exigences de ces lois a cet egard.
8.2 Le Vendeur et l'Acheteur conviennent de plus que le montant ou la somme convenue en vertu des dispositions de roulement sera egal au cout indique du bien, au sens qui est donne a cette expression dans la Loi de l'impot sur le revenu (Canada) ou la Loi sur les impots (Quebec).
8.3 En raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, il est entendu et convenu que si la juste valeur marchande de l'immeuble vendu par les presentes, telle qu'etablie par les autorites fiscales competentes, soit le ministere du Revenu national (Canada) et le ministere du Revenu (Quebec), ou par les tribunaux competents dans le cas ou le litige serait porte par les parties devant ces tribunaux, differait de la valeur de la contrepartie qui est stipulee au paragraphe 2 des presentes, ou si la valeur de realisation des biens transferes etait differente de celle prevue au paragraphe 2 des presente, alors l'Acheteur apportera les corrections appropriees en modifiant le compte de surplus cree en raison du choix effectue conformement aux dispositions du paragraphe 123.49 de la Loi sur les compagnies du Quebec (26(3) de la Loi canadienne sur les societes par actions), soit :
a) en l'(les) augmentant de facon a tenir compte de la difference qui pourra exister dans le cas ou la juste valeur marchande etablie par les autorites fiscales ou les tribunaux competents, selon le cas, serait plus elevee que le prix indique a l'article 2 ; ou
b) en le(les) diminuant de facon a tenir compte de la difference qui pourra exister dans le cas ou la juste valeur marchande etablie par les autorites fiscales ou les tribunaux competents, selon le cas, serait moindre que le prix indique a l'article 2.
8.4 En raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, il est egalement entendu et convenu que si la valeur marchande de l'immeuble vendu par les presentes, telle qu'etablie par les autorites fiscales competentes, soit le ministere du Revenu national (Canada) et le ministere du Revenu (Quebec), ou par les tribunaux competents dans le cas ou le litige serait porte par les parties devant ces tribunaux, differait de la valeur indiquee sur les formules de roulement appropriees, l'Acheteur et le Vendeur s'engagent a modifier et amender ces formules de facon a se conformer a la decision des autorites fiscales ou des tribunaux competents selon le cas.
8.5 Le Vendeur et l'Acheteur declarent expressement se prevaloir du choix
offert en vertu de l'article 22 de la Loi de l'impot sur le revenu
(Canada) ainsi que de l'article 184 de la Loi sur les impots (Quebec)
et s'engagent de plus a signer tout document et a faire toute chose
necessaire aux fins de se conformer aux exigences de cette loi a cet
egard.
9. MECANISMES ET RAJUSTEMENT DE PRIX DE VENTE :
9.1 Les parties declarent avoir fait l'evaluation de l'immeuble presentement vendu de bonne foi et elles desirent transiger a la juste valeur marchande.
9.2 Vu les liens de dependance existant entre le Vendeur et l'Acheteur, les parties conviennent que si la juste valeur marchande de l'immeuble faisant l'objet de la presente cession, telle que determinee suite a une cotisation d'impot, differait de la consideration ci-dessus stipulee, sous reserve du droit des parties de contester devant les tribunaux l'evaluation des autorites fiscales, elles reajusteront cette consideration pour qu'elle soit conforme a la juste valeur marchande determinee, en augmentant ou, selon le cas, en diminuant le nombre d'actions emises en paiement du prix ou, dans le cas ou une prime est prevue lors du rachat, en augmentant ou selon le cas, en diminuant la prime prevue pour le rachat par
action emise en paiement du prix, le tout de facon a ce que le nombre de ces actions ajuste, multiplie par le montant paye sur chacune d'elles corresponde a la valeur telle qu'elle a ete ajustee, ou encore, dans le cas ou une prime est prevue lors du rachat, de facon a ce que le nombre de ces actions multiplie par la prime rajustee et par le montant paye sur chacune d'elles, corresponde a la valeur, telle qu'elle a ete ajustee. Les parties conviennent de plus de faire toute autre chose pour rendre executoire cet ajustement et notamment d'ajuster tout paiement effectue en fonction du montant repute paye sur lesdites actions et de faire le paiement ou le remboursement qui s'impose a la suite de cet ajustement.
9.3 Il est entendu que l'ajustement prevu ci-dessus ne sera execute que lorsque les parties auront epuise tous les recours en revision ou en appel des decisions desdites autorites fiscales, ou encore lorsque les parties auront convenu de ne pas se prevaloir de tels recours.
9.4 Le Vendeur et l'Acheteur s'engagent de plus a faire les ajustements qui s'imposent relativement aux dividendes, soit en payant des dividendes sur les actions additionnelles emises ou en remboursant la societe des dividendes recus sur les actions annulees par la suite de ce rajustement, selon le cas, ou, dans le cas ou une prime est prevue lors du rachat, en payant la partie des dividendes qui aurait du etre payee lors de l'emission de tel dividende si les actions avaient alors ete ajustees de la prime augmentee de la facon prevue ci-avant ou en remboursant la societe de la partie de dividendes recus en trop du au fait que les actions n'avaient pas alors ete ajustees de la prime diminuee de la facon prevue ci-avant.
9.5 Les parties conviennent de signer tout document pour donner plein et entier effet a la clause de rajustement ci-dessus.
10. AJUSTEMENTS
10.1 Les parties declarent avoir fait entre elles les ajustements d'usage comme en date du 1er septembre 1999. Si d'autres ajustements sont necessaires, ils seront egalement faits comme en date du 1er septembre 1999.
11. OBLIGATIONS
11.1 L'Acheteur s'oblige et s'engage envers le Vendeur a ce qui suit :
11.1.1. Prendre l'immeuble dans l'etat dans lequel il se trouve,
declarant l'avoir vu et examine a sa satisfaction ;
11.1.2 Payer tous les impots fonciers echus et a echoir, y compris la
proportion de ceux-ci pour l'annee courante a compter du 1er
septembre 1999 et aussi payer, a compter de la meme date, tous
les versements en capital et interets a echoir sur toutes les
taxes speciales imposees avant ce jour dont le paiement est
reparti sur plusieurs annees.
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12. TPS et TVQ
12.1 Les parties declarent que la valeur de la contrepartie taxable aux fins de la Loi sur la taxe d'accise est de un million huit cent soixante-huit mille dollars (1 868 000 $), et aux fins de la Loi sur la taxe de vente du Quebec est de un million neuf cent quatre-vingt-dix-huit mille sept cent soixante dollars (1 998 760 $). La TPS represente une somme de cent trente mille sept cent soixante dollars (130 760 $) et la TVQ represente une somme de cent quarante neuf mille neuf cent sept dollars (149 907 $).
12.2 L'Acheteur declare que ses numeros d'inscription de TPS et de TVQ sont les suivants :
TPS : 143129179
TVQ : 1022709506TQ0001
et que ces inscriptions n'ont pas ete annulees, ni ne sont en voie de l'etre.
En consequence, la responsabilite relative a la perception de la TPS et de la TVQ relative a la presente vente est supportee par l'Acheteur.
Cependant, en raison du lien de dependance qui existe entre le Vendeur et l'Acheteur, les parties conviennent de faire tout ce qui est necessaire pour que l'Acheteur soit exempte du
paiement de la TPS et de la TVQ et de signer tout document utile ou necessaire a cet effet.
12.3 Les parties font ces declarations sollennelles les croyant consciencieusement vraies et sachant qu'elles ont la meme force et effet que si elles etaient faites sous serment en vertu de la Loi sur la preuve au Canada.
13. DECLARATIONS RELATIVES A LA LOI CONCERNANT LES DROITS SUR LES TRANSFERTS DE TERRAINS
13.1 L'Acheteur declare ne pas etre un cessionnaire au sens de ladite loi.
14. DECLARATION DES PARTIES RELATIVE AUX MENTIONS EXIGEES EN VERTU DE LA LOI CONCERNANT LES DROITS DE MUTATIONS IMMOBILIERES
14.1 L'Acheteur et le Vendeur declarent que :
14.1.1 L'Acheteur est 9080-9823 QUEBEC INC., personne morale de droit
prive, legalement constituee en vertu de la Partie 1A de la
Loi sur les compagnies, ayant son siege au 465, rue Godin,
Vanier, province de Quebec, G1M 3G7, agissant aux presentes et
ici representee par monsieur Germain Lamonde, president,
dument autorise aux fins des presentes en vertu d'une
resolution des administrateurs datee du 1er septembre 1999 ;
14.1.2 Le Vendeur est GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.,
personne morale de droit prive, legalement constituee en vertu
de la Partie 1A de la Loi sur les compagnies, ayant son siege
au 465, rue Godin, Vanier, province de Quebec, G1M 3G7,
agissant aux presentes et ici representee par monsieur Germain
Lamonde, president, dument autorise aux fins des presentes en
vertu d'une resolution des administrateurs datee du 1er
septembre 1999 ;
14.1.3 Le bien faisant l'objet du present transfert est situe sur le
territoire de la Ville de Vanier ;
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- 10 -
14.1.4 Le bien faisant l'objet du transfert n'est qu'un immeuble
corporel et ledit transfert ne comprend pas de meubles qui
sont a demeure, materiellement attaches ou reunis a l'immeuble
sans perdre leur individualite et sans y etre incorpores et
qui dans l'immeuble servent a l'exploitation d'une entreprise
ou a la poursuite d'activites tel que visees a l'article 1.0.1
de la Loi ;
14.1.5 Le montant de la contrepartie pour le transfert de l'immeuble
situe au civique 436, rue Nolin, a Ville de Vanier, province
de Quebec, G1M 1E7, designe a l'article 1.1.1, est selon les
parties de un million cinquante mille dollars (1 050 000 $) ;
14.1.6 Le montant constituant la base d'imposition du droit de
mutation pour cet immeuble est selon les parties de un million
cinquante mille dollars (1 050 000 $) ;
14.1.7 Le montant du droit de mutation pour cet immeuble est selon
les parties de quatorze mille deux cent cinquante dollars (14
250 $) ;
14.1.8 Le montant de la contrepartie pour le transfert de l'immeuble
situe au 465, avenue Godin, a Ville de Vanier, province de
Quebec, G1M 3G7, designe a l'article 1.1.2, est selon les
parties de huit cent dix-huit mille dollars (818 000 $) ;
14.1.9 Le montant constituant la base d'imposition du droit de
mutation pour cet immeuble est selon les parties de huit cent
dix-huit mille dollars (818 000 $) ;
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14.1.10 Le montant du droit de mutation pour cet immeuble est selon les parties de dix mille sept cent soixante-dix dollars (10 770 $) ;
14.1.11 L'Acheteur est une filiale du Vendeur et, par consequent, il beneficie de l'exoneration du paiement du droit de mutation en vertu de l'article 19 d) de la Loi.
EN FOI DE QUOI, LES PARTIES ONT SIGNE A QUEBEC, CE 1ER JOUR DE
SEPTEMBRE 1999.
Le Vendeur :
GEXFO INVESTISSEMENTS TECHNOLOGIQUES INC.
Par :
/s/ Germain Lamonde _________________________________ Germain Lamonde, president |
L'Acheteure :
9080-9823 QUEBEC INC.
Par :
/s/ Germain Lamonde _________________________________ Germain Lamonde, president |
ATTESTATION DE L'AVOCAT
Je, soussigne, Me Louis Rochette, avocat, domicilie et residant au 236, rue du Grand-Hunier, Saint-Agustin-de-Desmaures, province de Quebec, G3A 2J2, atteste ce qui suit :
1. J'ai verifie l'identite, la qualite et la capacite des parties ;
2. L'acte est valide quant a sa forme ;
3. L'acte traduit la volonte esprimee par les parties ;
4. Les titres du Vendeur sont deja valablement publies.
ATTESTE A QUEBEC, le 1er jour de septembre 1999.
/s/ Louis Rochette _________________________________ Louis Rochette, avocat LAVERY, DEBILLY 925, CHEMIN ST-LOUIS, BUREAU 500 Quebec Qc G1S 1C1 |
EXHIBIT 10.15
Form of Employment Agreement of Germain Lamonde.
This Employment Agreement (the "Agreement"), dated as of May 29, 2000, is entered into by and between EXFO Electro-Optical Engineering Inc., a corporation having its principal place of business at 465 Godin Avenue, Vanier, Quebec, G1M 3G7, Canada (the "Corporation") and Germain Lamonde, an individual with an address at 4310, Cure-Drolet, Cap Rouge (Qu#bec) G1Y 3H2 (the "Employee").
TERMS OF AGREEMENT
In consideration of this Agreement and the continued employment of the Employee by the Corporation, the parties agree as follows :
1. EMPLOYMENT
The Corporation hereby agrees to continue to employ Employee, on a full-time basis to continue to act as President and Chief Executive Officer of the Corporation and to perform such acts and duties and furnish such services to the Corporation in connection with and related to that position as is customary for persons with similar positions in like companies, as the Corporation's Board of Directors shall from time to time reasonably direct. Employee hereby accepts said employment. Employee shall use his best and most diligent efforts to promote the interests of the Corporation; shall discharge his duties in a highly competent manner; and shall devote his full business time and his best business judgement, skill and knowledge to the performance of his duties and responsibilities hereunder. This Agreement shall not be interpreted to prohibit Employee from making passive personal investments or conducting private business affairs if such activities do not materially interfere with the services required under this Agreement. Employee shall report to the Board of Directors of the Corporation.
2. COMPENSATION AND BENEFITS
2.1 SALARY
During the term of this Agreement, the Corporation shall pay Employee the remuneration indicated in Schedule A. The Employee's remuneration may be adjusted in accordance with the Corporation's policies and procedures.
2.2 DISCRETIONARY BONUS
During the term of this Agreement, the Employee may participate in such bonus plan or plans of the Corporation as the Board of Directors or its Human Resources Committee may approve for the Employee. Nothing contained in this
Section 2.2 shall be construed to require the Board of Directors to approve a bonus plan or in any way grant to Employee the right to receive bonuses not otherwise approved.
2.3 BENEFITS
During the term of this Agreement, the Employee shall receive such benefits as customarily provided to other officers and employees of the Corporation, as applicable. Details of such benefits as of the date hereof are set forth in Schedule B of this Agreement.
2.4 VACATION
Employee may take the number of weeks of paid vacation during each year that is indicated in Schedule A at such times as shall be consistent with the Corporation's vacation policies and (in the Corporation's judgement) with the Corporation's vacation schedule for officers and other employees.
2.5 EXPENSES
Pursuant to the Corporation's customary policies in force at the time of payment, Employee shall be promptly reimbursed, against presentation of vouchers or receipts therefor, for all authorised expenses properly incurred by him on the Corporation's behalf in the performance of his duties hereunder.
3. TERMINATION
3.1 DISABILITY
If during the term of this Agreement, Employee becomes ill, disabled
or otherwise incapacitated so as to be unable to perform his usual
duties (a) for a period in excess of one hundred twenty (180)
consecutive days and this incapacity has not been remedied within one
(1) year of the first day of disability, or (b) for more than two
hundred and seventy (270) days in any consecutive eighteen (18) month
period and this incapacity has not been remedied within eighteen (18)
months of the first day of disability, then the Corporation shall have
the right to terminate this Agreement, subject only to applicable
laws, on thirty (30) day's notice to Employee. Termination pursuant to
this Section 3.1 shall not affect any rights Employee may otherwise
have under any disability insurance policies in effect at the time of
such termination.
3.2 DISCHARGE FOR CAUSE
The Corporation may discharge Employee and terminate his employment under this Agreement for cause without further liability to the Corporation by the
positive vote of 2/3 of the members of the Board of Directors of the Corporation except that the Employee, if a Director, shall not be entitled to vote thereon. As used in this Section 3.2, "cause" shall mean any or all of the following;
(a) gross or wilful misconduct of Employee during the course of his employment;
(b) conviction of any criminal offence involving dishonesty, breach of trust or moral turpitude during the term of this Agreement; or
(c) Employee's breach of any of the material terms of this Agreement.
3.3 TERMINATION WITHOUT CAUSE
Upon thirty (30) days prior written notice, the Corporation may terminate this Agreement without cause by a positive vote of 2/3 of the members of the Board of Directors of the Corporation except that the Employee, if a Director, shall not be entitled to vote thereon. The Corporation shall incur no liability in this regard except that it shall continue to pay Employee the remuneration in accordance with the terms of Schedule A at his then current rate for a twenty-four (24) month period after termination if termination shall occur prior to the events mentioned in Section 3.4. In addition, any outstanding stock options that have not vested in accordance with their terms, will become fully vested and shall be exercised by Employee within a period of twelve (12) months from the time of such termination or shall be automatically terminated immediately following such twelve (12) month period.
3.4 TERMINATION FOLLOWING MERGER OR ACQUISITION
If the Corporation merges or consolidates with another corporation, if substantially all of the assets of the Corporation are sold, or if a majority of the outstanding stock of the Corporation is acquired by another person and Employee's employment is subsequently terminated by the Corporation or surviving entity other than for cause as described in 3.2, Employee shall be entitled to 24 months' remuneration plus health benefits.
In addition to the foregoing, any outstanding stock options (including substituted stock options of the acquiring or surviving corporation in such merger or acquisition) which have not vested in accordance with their terms will become fully vested and shall be exercised by Employee within a period of twelve (12) months from the time of such termination or shall be automatically terminated immediately following such twelve (12) month period. For purposes of this Section 3.4, Employee shall be entitled to treat a material demotion in title or function or a physical relocation of worksite of more than 50 km as termination under this Section 3.4, but only if Employee expressly so notifies the Corporation and terminates his employment hereunder within thirty (30)
days of such demotion or relocation. If Employee is offered a
substantially similar position with the surviving entity and no
physical relocation (beyond a 50 km radius form Employee's regular
worksite) is required by such position, Employee's refusal to accept
such position shall not be treated as subject to this Section 3.4, but
rather shall be treated as a voluntary termination by Employee under
Section 3.5.
3.5 VOLUNTARY TERMINATION BY EMPLOYEE
In the event of voluntary termination by Employee, Employee shall be entitled only to those amounts that have accrued to the date of termination in accordance with the terms hereof or are expressly payable under the terms of the Corporation applicable benefit plans or are required by applicable law. In addition, any outstanding stock options that have not vested in accordance with their terms, will become fully vested and shall be exercised by Employee within a period of twelve (12) months from the time of such termination or shall be automatically terminated immediately following such twelve (12) month period. The Corporation may, in its sole and absolute discretion, confer such other benefits or payments as it determines, but Employee shall have no entitlement thereto.
4. MISCELLANEOUS
4.1 INSURANCE
The Corporation hereby represents that it is presently the holder of directors and officers insurance in an amount and having a coverage that is recommended by its legal advisors and insurance broker as adequate taking into account the status of the Corporation, its size and the nature of its activities. The Corporation undertakes to ensure that such insurance shall remain in force throughout the term of this Agreement and in the event such insurance is cancelled, the Corporation shall immediately advise the Employee in writing.
4.2 ADDITIONAL AGREEMENTS
Upon execution of this Agreement, the Employee shall execute and deliver to the Corporation, unless previously delivered, an Exclusivity, Confidentiality, Assignment of Work Product, Non-Competition and Non-Solicitation Agreement.
4.3 Notices
Any notice or communication given by any party hereto to the other party with regard to this Agreement shall be in writing and personally delivered or mailed by certified mail, return receipt requested, postage prepaid, to the addresses
provided above. All notices shall be deemed given when actually received. Any person entitled to receive notice (or a copy thereof) may designate in writing, by notice to the others, such other address to which notices to such person shall thereafter be sent.
4.4 ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties in respect of its subject matter and supersedes all prior agreements and understandings between the parties with respect to such subject matter, provided, however that nothing in this Agreement shall affect the Employee's obligations under the Exclusivity, Confidentiality, Assignment Of Work Product, Non-Competition And Non-Solicitation Agreement signed by the Employee.
4.5 AMENDMENT WAIVER
This Agreement may not be amended, supplemented, cancelled or discharged, except by written instrument executed by the party affected thereby. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof. No waiver of any breach of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision.
4.6 BINDING EFFECT, ASSIGNMENT
Employee's rights or obligations under this Agreement may not be assigned by Employee. The rights and obligations set forth in this Agreement shall bind and inure to the benefit of the Corporation and its successors and assigns. The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it as if no such event had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as herein before defined any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
4.7 HEADINGS
The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
4.8 GOVERNING LAW, INTERPRETATION
This Agreement shall be construed in accordance with and governed for all purposes by the laws applicable in the province of Quebec. Service of process
in any dispute shall be effective (a) upon the Corporation, if service is made on any officer of the Corporation other than the Employee; (b) upon the Employee, if served at Employee's residence last known to the Corporation with an information copy to the Employee at any other residence, or care of a subsequent employer, of which the Corporation may be aware.
4.9 FURTHER ASSURANCES
Each of the parties agrees to execute, acknowledge, deliver and perform, or cause to be executed, acknowledged, delivered and performed at any time, or from time to time, as the case may be, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be necessary or proper to carry out the provisions or intent of this Agreement.
4.10 LANGUAGE
This Agreement has been written in English at the express request of the parties. Cette entente a ete redigee en anglais a demande expresse des parties.
4.11 SEVERABILITY
If any one or more of the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
EXFO ELECTRO-OPTICAL
ENGINEERING INC.
BY: ________________________ _________________________ Authorized Signatory GERMAIN LAMONDE
SCHEDULE A
TO
GERMAIN LAMONDE EMPLOYMENT AGREEMENT
REMUNERATION AND VACATION
1. REMUNERATION
(i) Salary from date of Employment Agreement to August 31, 2000:
$275,000 per annum (no variable portion applicable during this
period).
(ii) Remuneration from September 1, 2000 to August 31, 2001: Base
salary of $275,000 per annum, plus a variable portion of
remuneration which is $137,500 per annum upon attainment by the
Corporation of 100% of the Health Indicator established by the
Board of Directors of the Corporation for that financial year.
In the event the Corporation: (a) does not fully attain, or (b)
exceeds, the Health Indicator for the year in question, the
variable portion of the remuneration shall be paid in the same
proportion as the attainment of the Health Indicator up to a
maximum of 150%. The variable portion shall be paid within sixty
(60) days of the end of each of the Corporation's financial years
commencing with the financial year ending August 31, 2001.
In the event the Employee's employment is terminated by the Corporation with cause or the Employee voluntarily terminates his employment, the variable portion of the remuneration shall be payable on a proportionate basis for the financial year during which the employment terminated for such reasons.
(iii) Participation in the Corporation's Stock Option Plan: Upon adoption by the Corporation of its draft Stock Option Plan, the Employee shall be granted 30,000 options in accordance with the terms of the Stock Option Plan and subject to vesting conditions that extend over 4 years, up to a maximum of 5 years, and that are tied to the Corporation's Health Indicator (full details will be available at the granting of the options).
(iv) The first review of remuneration shall occur on or about September 1, 2001 and on or about every September 1 thereafter.
(v) The Corporation shall provide the Employee with an automobile responding to the requirements of the Employee's position in the Corporation.
2. VACATION
Four (4) weeks of paid vacation annually from the date hereof onwards.
SCHEDULE B
TO
GERMAIN LAMONDE EMPLOYMENT AGREEMENT
BENEFITS
The description below is a summary of the Corporation's present benefit package. It is expected that this package will evolve in the future.
1. The Corporation offers to management a long-term disability plan that covers two-thirds of salary for life. The Corporation pays the premium, thus this income would be taxable.
2. Management is covered by collective insurance that is paid by the Corporation in the following proportions: 40%, 60%, 80% and 100% in years 1, 2, 3 and 4 respectively. This insurance covers vision correction, chiropractor, etc. but excludes dental coverage. It also includes life insurance.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use in this Registration Statement on Form F-1 of our audit report and our "Comments by Auditors for U.S. Readers on Canada-U.S. Reporting Difference" dated October 15, 1999, relating to the financial statements of EXFO Electro-Optical Engineering Inc., which appear in such Registration Statement. We also consent to the references to us under the headings "Summary Consolidated Financial Data", "Selected Consolidated Financial Information" and "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP Quebec, Quebec, Canada June 9, 2000 |