Mutual Reliance Review System for Exemptive Relief Applications - relief from theregistration and prospectus requirements in respect of certain trades made inconnection with a take-over involving a Canadian reporting issuer and a Denmarkcompany where exemptions from the registration and prospectus requirements are notavailable for technical reasons.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 35(1)16,53,72(1)(j),72(4),72(5),74(1) and 89(1).
IN THE MATTER OF THE
MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
UNIQUE BROADBAND SYSTEMS, INC.
WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker"), in each of British Columbia, Alberta and Ontario (collectively the "Jurisdictions")has received an application from Unique Broadband Systems, Inc. ("UBS") for a decisionunder the securities legislation, regulations, rules and/or policies of the Jurisdictions (the"Legislation") that:
(i) certain trades in common shares of UBS made in connection with orresulting from the proposed take-over of Pro Television Technologies A/S("Pro-Television"), a Denmark company, (the "Acquisition") shall not besubject to the requirements contained in the Legislation to be registered totrade in a security (the "Registration Requirements") and to file a preliminaryprospectus and a prospectus and receive receipts therefor (the "ProspectusRequirements"); and
(ii) the first trade in common shares issued in connection with the Acquisition(the "Acquisition Common Shares") shall not be subject to the ProspectusRequirements.
AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application;
AND WHEREAS UBS has represented to the Decision Makers that:
1. UBS is a corporation amalgamated under the laws of the Province of Ontario.
2. UBS completed a reverse take-over with PCS Wireless, Inc. on September 27,1997 and has been a reporting issuer in British Columbia, Alberta and Ontario sincesuch date.
3. UBS is not in default of any requirement of the Legislation.
4. UBS's principal business is the development and manufacturing of broadbandwireless solutions by utilizing high-speed broadband mobile wireless transmissionof voice, data and other information.
5. UBS's principal executive offices are located in Concord, Ontario.
6. The authorized share capital of UBS consists of an unlimited number of commonshares of which there are currently 98,826,980 common shares issued andoutstanding.
7. The common shares of UBS are currently listed and posted for trading on theCanadian Venture Exchange ("CDNX").
8. Pro Television is a limited liability company registered in Denmark with its headoffice and principal place of business located in Brondby, Denmark.
9. The issued and outstanding share capital of Pro Television consists of 1,000,000shares which are directly owned and registered in the name of Panta ElectronicsB.V. ("Panta"), a limited liability company incorporated under the laws of Denmark.
10. Pro Television and Panta are not reporting issuers in the Jurisdictions.
11. The Acquisition is to be effected pursuant to an agreement of purchase and salebetween UBS and Panta with respect to the purchase by UBS from Panta of all ofthe shares of Pro-Television in consideration for the issuance to Panta of a certainnumber of common shares of UBS, (to be determined pursuant to a formula) anda certain sum of cash.
12. The Acquisition will be made in accordance and in compliance with the laws ofDenmark.
13. If Panta were a "person in Ontario (or other Jurisdiction)" as contemplated in thedefinition of "take-over bid" in the Legislation, the Acquisition would constitute atake-over bid under the Legislation, and the issuance of the Acquisition CommonShares to Panta could be effected in reliance upon the exemptions from theregistration and prospectus requirements set out in the Legislation. In that event,the first trade of the Acquisition Common Shares would be subject to similar resalerestrictions in the Legislation of the respective Jurisdictions.
14. If Panta were a "person in Ontario (or other Jurisdiction)" and the Acquisitionconstituted a "take-over bid" under the Legislation, the take-over bid would be anexempt take-over bid as Pro-Television is not a reporting issuer in the Jurisdictionsand has fewer than 50 shareholders.
15. The Acquisition is a bona fide commercial transaction negotiated at arm's lengthwith Panta, and is not intended to be a back-door distribution of the AcquisitionCommon Shares into the capital markets of Canada.
16. A distribution of securities outside of a Jurisdiction may also be considered to bea distribution of securities in the Jurisdiction depending on the connecting factorsof the distribution to the Jurisdiction. Due to the connecting factors of theAcquisition to the capital markets of Canada including the intention of Panta to sellthe Acquisition Common Shares through the facilities of the CDNX, UBS is seekingrelief from the Registration and Prospectus Requirements for the distribution andresale of the Acquisition Common Shares issued and acquired pursuant to theAcquisition to ensure compliance with the Legislation.
AND WHEREAS under the System this MRRS Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that:
A. the Registration Requirement and the Prospectus Requirement shall notapply to the distribution of the Acquisition Common Shares made inconnection with the Acquisition; and
B. the first trade of the Acquisition Common Shares shall be a distributionunless:
1. UBS is a reporting issuer or equivalent under the Legislation of theJurisdiction (the "Applicable Legislation") in which the trade occurs;
2. no unusual effort is made to prepare the market or create a demandfor the Acquisition Common Shares;
3. no extraordinary commission or other consideration is paid in respectof the first trade;
4. if the seller is in a "special relationship" with or is an "insider" of UBS(each as defined in the Applicable Legislation), the seller hasreasonable grounds to believe that UBS is not in default of anyrequirements of the Applicable Legislation; and
5. the first trade is not a distribution from the holdings of a person orcompany, or combination of persons and companies, acting inconcert or by virtue of an agreement, arrangement, commitment orunderstanding, which holds in total a sufficient number of any votingsecurities of UBS to affect materially the control of UBS, and if aperson or company or combination of persons and companies holdsmore than 20% of the voting attached to all outstanding securities ofUBS, the person or company or combination of persons andcompanies is deemed, in the absence of evidence to the contrary, tohold a sufficient number of the voting rights to affect materially thecontrol of UBS.
September 14th, 2000.
"J. A. Geller" "K. D. Adams"