National Policy 11-203 -- Process for Exemptive Relief in Multiple Jurisdictions -- National Instrument 51-102 -- Continuous Disclosure Obligations, s. 13.1 -- Interim financial statements -- An issuer wants relief from the requirements to file and/or deliver interim financial statements for a particular period -- A compulsory acquisition procedure pursuant to corporate legislation has been undertaken, prior to the filing deadline, in relation to the issuer and its shareholders pursuant to which all of the issuer's securities will be acquired by the offer by a fixed date.
National Instrument 52-109 -- Certification of Disclosure in Issuer's Annual and Interim Filings, s. 8.6 -- An issuer wants relief from the requirements in Part 5 of NI 52-109 to prepare officer certifications -- The issuer has applied for and received an exemption from filing interim financial statements.
Applicable Legislative Provisions
Section 13.1 of NI 51-102.
Section 8.6 of NI 52-109.
February 11, 2010
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO (the "Jurisdiction")
IN THE MATTER OF
THE PROCESS FOR EXEMPT OF RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
XENOS GROUP INC. (the "Filer")
1. 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") for a decision that Xenos Group Inc. ("Xenos") be exempt from the requirements: (a) under National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102"), to prepare, file and, where required, deliver to shareholders interim financial statements and management's discussion and analysis for the three months ended December 31, 2009, (the "Interim Filings"); and (b) under National Instrument 52-109 Certification of Disclosure ("NI 52-109"), to file interim certificates (the "Officer Certificates") relating to the Interim Filings (together, the"Requested Relief").
2. 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, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, the Yukon, Northwest Territories and Nunavut.
3. Defined terms contain in National Instrument 14-101 Definitions have the same meaning in this decision unless otherwise defined.
4. This decision is based on the following facts represented by the Filer:
1. Xenos is a corporation existing under the Business Corporations Act (Ontario) (the "OBCA"). Xenos' head office and mailing address is at 95 Mural Street, Suite 201, Richmond Hill, Ontario, L4B 3G2.
2. Xenos is a reporting issuer in the Jurisdictions and is not in default of securities legislation in any of the Jurisdictions.
3. For the purposes of NP 11-203, Xenos has selected Ontario as its principal regulator.
4. Xenos is a Canadian technology company that specializes in the development of information technology solutions for organizations in numerous industries around the world.
5. The Common Shares of Xenos are listed on the Toronto Stock Exchange under the symbol "XNS". No securities of Xenos other than the Common Shares are issued and outstanding or publicly held as of the date hereof.
6. On December 23, 2009, Actuate Canada International Corporation ("ACIC"), a wholly-owned subsidiary of Actuate Corporation ("Actuate"), commenced an offer (the "Offer") to acquire all of the outstanding common shares ("Common Shares") including Common Shares that became issued and outstanding after the date of the Offer but before the expiry of the Offer upon the conversion, exchange or exercise of options to purchase Common Shares, at a price of Cdn.$3.50 cash per Common Share.
7. On February 1, 2010, ACIC acquired approximately 95.2% of the issued and outstanding Common Shares on a fully diluted basis. Prior to this date, neither of Actuate nor ACIC held any Common Shares. The Offer expired at 5:00 p.m. (Toronto time) on February 1, 2010. In a press release dated February 1, 2010 announcing the completion of the Offer, Xenos announced that it would be seeking an exemption from applicable requirements to file and deliver certain continuous disclosure materials (including its interim financial statements and related materials, as at and for the three month period ended December 31, 2009) pending its anticipated acquisition of those Common Shares not deposited under the Offer.
8. In the take-over bid circular dated December 23, 2009 accompanying the Offer, ACIC disclosed that if the Offer was accepted by shareholders who, in the aggregate, held not less than 90% of the issued and outstanding Common Shares (excluding Common Shares held by ACIC or any affiliates or associates thereof), ACIC intended to acquire those Common Shares which remained outstanding held by holders of Common Shares who did not accept the Offer (and each person who subsequently acquired any of such Common Shares) pursuant to the provisions of Part 15 of the OBCA.
9. ACIC has indicated that it expects to, by no later than February 4, 2010, send to those shareholders of Xenos who did not accept the Offer (the "Dissenting Offerees") (which definition includes any person who subsequently acquires such Common Shares) written notice (the "Acquisition Notice") that ACIC will acquire the Common Shares held by the Dissenting Offerees pursuant to, and in accordance with, Section 188 of the OBCA (the "Compulsory Acquisition").
10. Section 188 of the OBCA provides that once the Offeror Notice has been sent, ACIC is entitled to acquire all of the Common Shares held by the Dissenting Offerees for a price equal to (and on the same terms) as provided for in the Offer, or, at the election of a Dissenting Offeree, the "fair value" of such Common Shares as determined in accordance with Sections 188(13) -- (21) of the OBCA.
11. Pursuant to Section 188 of the OBCA, a Dissenting Offeree is entitled to make an application to the Ontario Superior Court of Justice (the "Court") in connection with any proposed Compulsory Acquisition. The Court may, by order, set the price and terms for payment for the Common Shares and make consequential orders and give such directions as the Court considers appropriate.
12. Under the provisions of Section 188 of the OBCA, ACIC is required to deliver to Xenos within twenty days of the date of delivery of the Offeror Notice a cash payment in the amount equal to the number of Common Shares held by the Dissenting Offerees multiplied by Cdn.$3.50, (being approximately Cdn.$1,671,621) (the "Acquisition Amount"), the aggregate amount the Dissenting Offerees are entitled to receive as payment for their Common Shares pursuant to the Compulsory Acquisition, assuming that each Dissenting Offeree elects, or is deemed to have elected, to receive such amount for each Common Share held thereby. On February 2, 2010, ACIC provided the Acquisition Amount to the transfer agent of Xenos pursuant to a direction from Xenos to ACIC.
13. Section 188 of the OBCA provides that ACIC will be deemed to have acquired all Common Shares held by Dissenting Offerees: (a) where a Dissenting Offeree has demanded payment of the "fair value" of his, her or its Common Shares and has applied to the Court for an order requiring ACIC to provide additional security for payment to Dissenting Offerees, upon compliance by ACIC with such order as the Court may make in respect of such application; or (b) where no such application is made prior to the thirtieth day following the date that the Offeror Notice is sent to Dissenting Offerees, upon the expiration of that period (the "Acquisition Date").
14. The Dissenting Offerees will continue as shareholders of Xenos until the Acquisition Date. The Common Shares will continue to be listed on the Toronto Stock Exchange until after the Acquisition Date.
15. Immediately after the Acquisition Date, Xenos intends to cause the Common Shares to be delisted from the Toronto Stock Exchange. As soon as practicable thereafter, Xenos also intends to apply to the securities regulatory authorities of the Jurisdictions for an order that Xenos cease to be a "reporting issuer" under the laws of the Jurisdictions. It is expected that Xenos will be 100% owned by ACIC by no later than March 6, 2010 and will cease to be a reporting issuer by the end of March 2010.
16. Absent the Requested Relief being granted, Xenos is, pursuant to the provisions of Sections 4.3, 4.6, 5.1 and 5.6 of NI 51-102, required, on or before February 12, 2010, to file the Interim Filings with the securities regulatory authorities of the Jurisdictions and to deliver copies of the Interim Filings to its shareholders.
17. Pursuant to the provisions of Part 5 of NI 52-109, Xenos is required to file the prescribed certification form of its Chief Executive Officer and Chief Financial Officer in respect of the three month period ended December 30, 2009 concurrently with the filing of the Interim Filings (the "Officer Certificates").
The Decision Maker is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.
The decision of the Decision Maker under the Legislation is that the Requested Relief is granted.