Aastra Technologies Limited

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Take-over Bids -- Exemption from the proportionate take-up requirements in section 97.2(1) of the Securities Act (Ontario) -- Exemption from the extension take-up requirements in section 98.3(4) of the Securities Act (Ontario) -- Dutch auction -- An issuer conducting an issuer bid under a modified Dutch auction procedure requires relief from the requirements for proportionate take up, and to take up and pay for securities if all terms and conditions are met and the issuer bid is under-subscribed. The issuer is disclosing the maximum dollar amount of shares it will acquire under the bid, and the minimum and maximum amount it will pay for shares tendered; as a result, the potential for confusion is minimal -- The issuer will comply with the U.S. regime in connection with the Offer.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 97.2(1), 98.3(4),104(2)(c).

OSC Rule 62-504, s. 4.2(2).

March 12, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

AASTRA TECHNOLOGIES LIMITED

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that, in connection with the proposed purchase by the Filer of a portion of its outstanding common shares (the Shares) pursuant to an issuer bid (the Offer), the Filer be exempt from the following requirements in the Legislation (the Exemption Sought):

(a) to take up and pay for securities deposited pursuant to the Offer proportionately according to the number of securities deposited by each depositing security holder;

(b) to provide disclosure of the proportionate take-up and payment in the issuer bid circular (the Circular); and

(c) to not extend the Offer if all the terms and conditions of the Offer have been complied with or waived unless the Filer first takes up all Shares deposited and not withdrawn under the Offer.

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

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Nunavut and the Yukon.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if 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 existing under theCanada Business Corporations Act and is a reporting issuer in each of the Jurisdictions. The Filer is not on the list of defaulting reporting issuers maintained by the securities regulator in each of the Jurisdictions that maintains such a list.

2. The Filer's principal and registered office is located at 155 Snow Boulevard, Concord, Ontario, Canada, L4K 4N9.

3. The authorized share capital of the Filer consists of an unlimited number of preferred shares and an unlimited number of common shares (the "Common Shares"). As of February 21, 2012, 14,031,485 Common Shares and no preferred shares were issued and outstanding.

4. Shen Capital Corporation ("F. Shen Holdco"), a private company under the direction and control of Francis N. Shen, is the owner of 1,403,522 Common Shares, representing approximately 10.0% of the issued and outstanding Common Shares.

5. 1615282 Ontario Limited ("A. Shen Holdco" and, together with F. Shen Holdco, the "Shen Holdcos"), a private company under the direction and control of Anthony P. Shen, is the owner of 427,406 Common Shares, representing approximately 3% of the issued and outstanding Common Shares.

6. The Filer's Common Shares are listed on the Toronto Stock Exchange ("TSX") under the symbol "AAH".

7. On February 21, 2012, the closing price of the Common Shares on the TSX was C$19.94 and on such date the common shares had an aggregate market value of approximately C$279,787,810 based on such closing price. Based on such closing price, the Common Shares, excluding the Common Shares held by the Shen Holdcos, had an aggregate market value of approximately C$243,279,106.

8. The Filer made the Offer on February 27, 2012 by way of a modified Dutch auction procedure as follows:

(a) The Circular specifies the maximum aggregate purchase price of Common Shares ($50 million) which the Filer will purchase under the Offer (the Specified Dollar Amount);

(b) The Circular specifies the range of prices (not less than C$21.00 and not more than C$23.00 and in increments of C$0.20 within that range) within which the Filer is prepared to purchase the Common Shares (the Price Range);

(c) The Filer will fund the purchase of Common Shares pursuant to the Offer, together with the fees and expenses of the Offer, from available cash on hand;

(d) Each holder of Common Shares (collectively the Shareholders) wishing to tender to the Offer has the right either to:

(i) Specify the lowest price within the Price Range (an Auction Price) at which that Shareholder is willing to sell its tendered Common Shares (an Auction Tender), or

(ii) Elect to tender a number of Common Shares that will allow them to retain the Shareholder's proportionate interest in the Filer following the completion of the Offer (a Proportionate Tender);

(e) Shareholders may make multiple Auction Tenders but not in respect of the same Common Shares (that is, shareholders may tender different common shares at different prices but cannot tender the same common shares at different prices); Shareholders who make a Proportionate Tender must tender all Common Shares beneficially owned by them to the Offer; Shareholders who make an Auction Tender may not make a Proportionate Tender; Shareholders who make a Proportionate Tender may not make an Auction Tender;

(f) any Shareholder who owns fewer than 100 Common Shares and tenders all of such Shareholder's Common Shares pursuant to an Auction Tender at or below the Purchase Price will be considered to have made an Odd-Lot Tender;

(g) the Filer will determine the purchase price payable per Common Share (the Purchase Price) based on the Auction Prices and the number of Common Shares specified in valid Auction Tenders; the Purchase Price will be the lowest price that enables the Filer to purchase that number of Common Shares tendered pursuant to valid Auction Tenders having an aggregate purchase price not to exceed an amount (the Auction Tender Limit Amount) equal to:

(i) the Specified Dollar Amount, less

(ii) the product of:

A. the Specified Dollar Amount and

B. a fraction, the numerator of which is the aggregate number of Common Shares owned by shareholders making valid Proportionate Tenders, and the denominator of which is the aggregate number of Common Shares outstanding at the time of the expiry of the Offer;

(h) if the aggregate purchase price for Common Shares validly tendered pursuant to Auction Tenders at Auction Prices at or below the Purchase Price is less than or equal to the Auction Tender Limit Amount, the Filer will purchase all Common Shares so deposited pursuant to Auction Tenders.

(i) if the aggregate purchase price for Common Shares validly tendered pursuant to Auction Tenders at Auction Prices at or below the Purchase Price is greater than the Auction Tender Limit Amount, the Filer will purchase a portion of the Common Shares so deposited pursuant to Auction Tenders, determined as follows:

(i) the Filer will purchase all such Common Shares tendered by Shareholders pursuant to Odd-Lot Tenders; and

(ii) the Filer will purchase on a pro rata basis that portion of such Common Shares having an aggregate purchase price equal to

A. the Auction Tender Limit Amount, less

B. the aggregate amount paid by the Filer for Common Shares tendered pursuant to Odd-Lot Tenders;

(j) the Filer will purchase at the Purchase Price that portion of the common shares owned by Shareholders making valid Proportionate Tenders that results in the tendering Shareholders maintaining their proportionate Share ownership following completion of the Offer;

(k) the number of common shares that the Filer will purchase pursuant to the Offer and the aggregate purchase price will vary depending on whether the aggregate purchase price payable in respect of common shares required to be purchased pursuant to Auction Tenders (the Auction Tender Purchase Amount) is equal to or less than the Auction Tender Limit Amount. If the Auction Tender Purchase Amount is equal to the Auction Tender Limit Amount, the Filer will purchase common shares for an aggregate purchase price equal to the Specified Dollar Amount; if the Auction Tender Purchase Amount is less than the Auction Tender Limit Amount, the Filer will purchase proportionately fewer common shares, with a proportionately lower aggregate purchase price;

(l) all common shares purchased by the Filer pursuant to the Offer (including common shares tendered at Auction Prices below the Purchase Price) will be purchased at the Purchase Price. Shareholders will receive the Purchase Price in cash; all Auction Tenders and Proportionate Tenders will be subject to adjustment to avoid the purchase of fractional common shares; all payments to Shareholders will be subject to deduction of applicable withholding taxes; and

(m) all Common Shares tendered at prices above the Purchase Price or otherwise invalidly tendered will be returned to the appropriate Shareholders.

9. The Offer is subject to Regulation 14E (Regulation 14E) promulgated under the United States Securities Exchange Act of 1934, as amended. 5.24% of the Filer's Common Shares are held by residents in the United States.

10. F. Shen Holdco and A. Shen Holdco (who own approximately 13% of the outstanding Common Shares) have advised the Filer that each of them intends to make a Proportionate Tender.

11. Until expiry of the Offer, all information about the number of Common Shares tendered and the prices at which the Common Shares are tendered will be required to be kept confidential by the depositary and the Filer until the Purchase Price has been determined.

12. Shareholders who do not accept the Offer will continue to hold the number of Common Shares owned before the Offer and their proportionate Common Share ownership will increase following completion of the Offer.

13. The Filer may elect to extend the bid in circumstances where the Offer is undersubscribed. Under the Legislation, an issuer may not extend an issuer bid if all the terms and conditions of the issuer bid have been complied with or waived unless the issuer first takes up all the securities deposited and not withdrawn under the issuer bid (the Extension Take Up Requirement). Regulation 14E requires an issuer to pay for all equity securities deposited under an issuer bid promptly following the expiry of the bid and, subject to an exception not available in the circumstances described herein, does not permit the bid to be extended after the initial take up of and payment for the securities.

14. The Filer intends to rely on the exemption from the formal valuation requirements applicable to issuer bids under Multilateral Instrument 61-101Protection of Minority Security Holders in Special Transactions (MI 61-101) set out in subsection 3.4(b) of MI 61-101 (the Liquid Market Exemption).

15. There is a "liquid market" for the common shares, as such term is defined in MI 61-101, because:

(a) there is a published market for the common shares (TSX);

(b) during the 12 months before announcement of the issuer bid:

(i) the number of outstanding common shares was at all times at least 5,000,000 (excluding common shares beneficially owned, or over which control and direction was exercised, by related parties and securities that were not freely tradeable);

(ii) the aggregate trading volume of common shares on TSX was at least 1,000,000 common shares;

(iii) there were at least 1,000 trades in the common shares on TSX; and

(iv) the aggregate value of the trades in the common shares on TSX was at least C$15,000,000; and

(c) the market value of the common shares on TSX, as determined in accordance with MI 61-101, was at least C$75,000,000 for February 2012;

16. Based on the facts set forth in paragraph 15 and the maximum number of Common Shares that may be purchased under the Offer, assuming an aggregate purchase price equal to the Specified Dollar Amount, the Filer has determined that there is a liquid market for the Common Shares and that it is reasonable to conclude that, following the completion of the Offer, there will be a market for holders of Common Shares who do not tender to the Offer that is not materially less liquid than the market that existed at the time the Offer was announced.

17. The Circular:

(a) discloses the mechanics for the take-up of and payment for Common Shares as described in paragraph 8 above;

(b) explains that, by tendering Common Shares at the lowest price in the Price Range under an Auction Tender or by tendering common shares under a Proportionate Tender, a Shareholder can reasonably expect that the common shares so tendered will be purchased at the Purchase Price, subject to proration and other terms of the Offer as specified in paragraph 8 above;

(c) discloses that the Filer has filed for an exemption from the Extension Take Up Requirement;

(d) discloses that each of F. Shen Holdco and A. Shen Holdco has advised that it intends to make a Proportionate Tender;

(e) discloses the facts supporting the Filer's reliance on the Liquid Market Exemption; and

(f) except to the extent exemptive relief is granted pursuant to this Decision, contains the disclosure prescribed by the Legislation for issuer bids.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) Shares deposited under the Offer and not withdrawn are taken up and paid for, or dealt with, in the manner described in paragraph 8 above;

(b) The Filer is eligible to rely on the Liquid Market Exemption and complies with the representations in paragraph 15 above; and

(c) The Filer complies with the requirements of Regulation 14E in respect of the conduct of the Offer.