Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Dual application for relief from the prospectus and registration requirements for certain trades made in connection with an employee share offering by a French issuer -- The issuer cannot rely on the employee exemption in section 2.24 of National Instrument 45-106 Prospectus and Registration Exemptions because the securities are not being offered to Canadian employees directly by the issuer but rather through a special purpose entity -- Canadian participants will receive disclosure documents -- The special purpose entity is subject to the supervision of the local securities regulator -- Canadian employees will not be induced to participate in the offering by expectation of employment or continued employment -- There is no market for the securities of the issuer in Canada -- The securities will not be listed on any stock exchange -- Units are not transferable by the Canadian participants -- The number of Canadian share ownership is de minimis -- Relief granted.

Applicable Legislative Provisions

Securities Act (Ontario), ss. 53, 74.

National Instrument 45-106 Prospectus and Registration Exemptions, s. 24

National Instrument 31-103 Registration Requirements and Exemptions, s. 8.16.

National Instrument 45-102 Resale of Securities, s. 2.14.

TRANSLATION

April 23, 2014

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (THE "FILING JURISDICTIONS") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF ALVEST INTERNATIONAL (THE "FILER")

DECISION

Background

The securities regulatory authority or regulator in each of the Filing Jurisdictions (the "Decision Makers") has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") for:

1. an exemption from the prospectus requirements of the Legislation (the "Prospectus Relief") so that such requirements do not apply to trades in units "C" and "units "D" (collectively, the "Units") of a fonds commun de placement d'entreprise named Alvest (the "FCPE"), made pursuant to the Employee Share Offering (as defined below) to or with Qualifying Employees (as defined below) resident in the Filing Jurisdictions and in the Provinces of British Columbia and Alberta (collectively, the "Canadian Employees", and Canadian Employees who subscribe for Units, the "Canadian Participants"); and

2. an exemption from the dealer registration requirements of the Legislation (the "Registration Relief") so that such requirements do not apply to the Filer and the Local Affiliates (as defined below), the FCPE and Equalis Capital France (the "Management Company") in respect of trades in Units made pursuant to the Employee Share Offering to or with Canadian Employees.

(the Prospectus Relief and the Registration Relief being collectively referred to as the "Offering Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application,

(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia and Alberta, and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, Regulation 45-106 respecting Prospectus and Registration Exemptions and Regulation 11-102 have the same meaning as used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation formed under the laws of France. It is not, and has no current intention of becoming, a reporting issuer under the Legislation or under the securities legislation of any other jurisdiction of Canada. The head office of the Filer is located in France. The shares of the Filer (the "Shares") are privately owned. No Share is listed on a stock exchange and the Filer currently does not intend to list one of its securities on a stock exchange. None of the shareholders is a Canadian resident. The Filer is not in default under the Legislation or under the securities legislation of any other jurisdiction of Canada.

2. The Filer carries on business in Canada through two affiliated companies that employ Canadian Employees, TLD (Canada) Inc. and Sage Parts Canada Inc. (collectively, the "Local Affiliates," and together with the Filer and other affiliates of the Filer, the "Alvest Group"). The Local Affiliates are not in default under the Legislation or under the securities legislation of any other jurisdiction of Canada.

3. Each of the Local Affiliates is a direct or indirect controlled subsidiary of the Filer and is not, and has no current intention of becoming, a reporting issuer under the Legislation or under the securities legislation of any other jurisdiction of Canada. The main affiliate of the Filer in Canada is TLD (Canada) Inc., located in Sherbrooke (Québec). There are more Canadian senior management members of the Filer that reside in Québec and there are more assets of the Filer located in Québec than any other Province of Canada.

4. The Filer has established a global employee share offering for employees of the Alvest Group (the "Employee Share Offering"). The Employee Share Offering involves an offering of Units to be subscribed through the FCPE, which has been established for the purposes of implementing the Employee Share Offering. There is no current intention for the FCPE to become a reporting issuer under the Legislation or the securities legislation of any other jurisdiction of Canada.

5. A fonds commun de placement d'entreprise is a form of collective shareholding vehicle commonly used in France for the conservation or custodianship of shares held by employee investors. The FCPE is a limited liability entity under the French law. The FCPE has been registered with the French Autorité des marchés financiers (the "French AMF") and approved by it on December 27th 2013 and remains subject to the regulatory and supervisory authority of the French AMF.

6. Only persons who are employees of a member of the Alvest Group for at least three months at the end of the subscription period for the Employee Share Offering (the "Qualifying Employees") will be allowed to participate in the Employee Share Offering.

7. The Units are not currently and will not be listed on any stock exchange.

8. Units acquired in the Employee Share Offering by Canadian Participants will be subject to a hold period of approximately five years (the "Lock-Up Period"), subject to certain exceptions prescribed by French law and adopted under the Employee Share Offering (such as a release on death or termination of employment, or the exception that the Canadian Participant's employer ceases to be an affiliate of the Filer).

9. Under the Employee Share Offering, Canadian Participants will subscribe for Units in the FCPE which itself will then subscribe for Shares, and hold them on behalf of Canadian Participants, using the Canadian Participants' contributions and the employer contributions from Local Affiliates that employ the Canadian Participants, as described in paragraph 10. Subscription to the FCPE will be limited to a single period of three weeks, beginning as soon as the Offering Relief has been granted by the Decision Makers. The subscription price will be the Canadian dollar equivalent equal to the Unit price, set at 10 Euro per Unit, based itself on a Share price set at 1 Euro per Share. The Share price has been set by an independent appraiser (the "Independent Appraiser") in accordance with regulations from the French AMF and as described in the terms and rules (the "Rules") of the FCPE.

10. The Local Affiliate employing a Canadian Participant will also contribute on behalf of such Canadian Participant an amount into the Employee Share Offering. For each contribution that a Canadian Participant makes up to the Canadian dollar equivalent of 500 Euros, the Local Affiliate employing such Canadian Participant will contribute 100 % of such amount on behalf of such Canadian Participant. If a Canadian Participant contributes more than the Canadian dollar equivalent of 500 Euros, then the Local Affiliate that employs such Canadian Participant will not contribute any amount in respect of the portion of the Canadian Participant's contribution that exceeds the Canadian dollar equivalent of 500 Euros. The maximum amount that a Canadian Participant is allowed to contribute is the Canadian dollar equivalent of 1,000 Euros.

11. The Unit value of the FCPE will be calculated and reported to the French AMF every six months, based on the net assets of the FCPE divided by the number of Units outstanding. The value of FCPE Units will be based on the value of the underlying Shares but, as described in paragraph 9, the number of Units of the FCPE will not correspond to the number of the underlying Shares. The underlying value of the Shares will be re-evaluated once a year by the Independent Appraiser in accordance with regulations from the French AMF and as described in the Rules of the FCPE.

12. Under no circumstances will a Canadian Participant be liable, to the Filer or the FCPE, for an amount exceeding its contribution to the Employee Share Offering.

13. At the end of the Lock-Up Period a Canadian Participant may:

(a) request the redemption of Units in the FCPE in consideration for a cash payment equal to the then value of the Unit, less a transaction cost of 1 % (the "Transaction Cost"), or

(b) continue to hold Units in the FCPE and request the redemption of those Units at a later date in consideration for a cash payment equal to the then value of the Unit less the Transaction Cost.

14. In the event of an early unwind resulting from the Canadian Participant exercising one of the exceptions to the Lock-Up Period prescribed by French law and meeting the applicable criteria, a Canadian Participant may request the redemption of Units in the FCPE in consideration for a cash payment equal to the then value of the Unit less the Transaction Cost.

15. Dividends paid on the Shares held in the FCPE will be contributed to the FCPE and

(a) either paid in cash to the Unit "D" holder; or

(b) reinvested by the FCPE in cash or cash equivalents on behalf of the Unit "C" holder. To reflect this reinvestment, no new Units will be issued. Instead, the reinvestment will increase the asset base of the Unit "C" of the FCPE as well as the value of the Units "C" held by the Canadian Participants.

16. The portfolio of the FCPE will consist almost entirely of Shares, but may, from time to time, include cash in respect of dividends paid on the Shares. From time to time, the portfolio may also include cash or cash equivalents that the FCPE may hold for the purposes of Unit redemptions. Initially the portfolio of the FCPE will consist of 90 % of Shares and 10 % of cash equivalents.

17. The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF as an investment manager and complies with the rules of the French AMF. To the Filer's knowledge, the Management Company is not, and has no current intention of becoming, a reporting issuer under the Legislation or the securities legislation of any other jurisdiction of Canada.

18. The Management Company's portfolio management activities in connection with the Employee Share Offering and the FCPE are limited to subscribing for Shares from the Filer, selling such Shares to the Filer at the Share price set by the Independent Appraiser as necessary in order to fund redemption requests and investing available cash in cash equivalents.

19. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents about the FCPE as provided by the Rules of the FCPE. The Management Company's activities do not affect the underlying value of the Shares. To the Filer's knowledge, the Management Company is not in default of the Legislation or the securities legislation of any other jurisdiction of Canada.

20. The Management Company is obliged to act exclusively in the best interest of the Canadian Participants and is liable to them, jointly and severally with the Depositary (as this term is defined hereinafter) for any violation of rules and regulations governing the FCPE, any violation of the Rules of the FCPE or for any self-dealing or negligence.

21. The members of the Alvest Group, the FCPE and the Management Company, as well as any director, officer, employee, agent or representative respective thereof will not provide investment advice to the Canadians Employees with respect to an investment in the Shares or the Units nor to the Canadian Participants in respect of the holding or redemption of the Units.

22. Shares issued in the Employee Share Offering will be deposited in the FCPE through Banque Fédérative du Crédit Mutuel (the "Depositary"), a large French commercial bank subject to French banking legislation.

23. The accounts of the FCPE are audited by chartered auditors, appointed for a period of six years with the agreement of the French AMF.

24. All management charges relating to the FCPE will be paid by the Filer, as provided in the Rules of the FCPE.

25. Participation in the Employee Share Offering is voluntary, and the Canadian Employees will not be induced to participate in the Employee Share Offering by expectation of employment or continued employment.

26. The total amount which may be invested by a Canadian Employee in the Employee Share Offering cannot exceed 25 % of his or her gross annual compensation for the 2014 calendar year.

27. The Canadian Employees will receive an information package in the French or English language, according to their preference, which will include a summary of the terms of the Employee Share Offering and a tax notice containing a description of Canadian income tax consequences of subscribing to and holding Units of the FCPE and requesting the redemption of such Units for cash at the end of the Lock-Up Period.

28. Canadian Employees can have access, through their Management or their Human Resources Services, to a copy of a presentation of the Filer, its annual financial statements consolidated and audited, as well as a copy of the information documents of the Filer deposited with the French AMF relating to the Shares and the Rules of the FCPE. The new value of the Share and general information on the business of the Filer will also be communicated annually to the Canadian Employees.

29. Canadian Participants will receive an initial statement of their holdings under the Employee Share Offering, together with an updated statement at least once per year.

30. There are approximately 150 Qualifying Employees resident in Canada (with the greatest number, approximately 120, resident of Québec), who represent, in aggregate, less than 15 % of the total number of employees in the Alvest Group worldwide.

31. At the date hereof and after giving effect to the Employee Share Offering, Canadian Participants do not and will not beneficially own (which term, for the purposes of this paragraph, is deemed to include all Shares held by the FCPE on behalf of Canadian Participants) more than 1 % of the outstanding Shares as shown on the books of the Filer.

32. Neither the FCPE nor an entity being a member of the Alvest Group are in default under the Legislation or under the securities legislation of any other jurisdiction of Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Offering Relief is granted provided that the prospectus requirements of the Legislation will apply to the first trade in any Units acquired by Canadian Participants pursuant to this decision.

"Lucie J. Roy"
Senior Director, Corporate Finance