Pink Elephant Inc. - ss. 74(1)

Ruling
IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990 CHAPTER S.5, AS AMENDED (the "Act")


AND


IN THE MATTER OF

PINK ELEPHANT INC.


RULING

(Subsection 74(l))


UPON the application of Pink Elephant Inc. ("Pink Elephant") and Pink Roccade nv ("Parentco") to the Ontario Securities Commission (the "Commission") for a ruling, pursuant to subsection 74(l) of the Act that certain first trades in shares of common stock of Parentco (the "Plan Shares") issued pursuant to the Pink Elephant Share Incentive Programmes for Employees of Parentco and its subsidiaries (the "Plans") shall not be subject to section 25 of the Act;


AND UPON considering the application and recommendation of the staff of the Commission;


AND UPON Pink Elephant and Parentco having represented to the Commission as follows:


1. Pink Elephant is incorporated pursuant to the laws of Ontario, is not a reporting issuer under the Act and has no present intention of becoming a reporting issuer under the Act.


2. Pink Elephant is a wholly-owned subsidiary of Parentco.


3. Parentco is incorporated pursuant to the laws of Holland, is not a reporting issuer under the Act and has no present intention of becoming a reporting issuer under the Act.


4. Parentco is subject to the securities regulation of Holland and the Plan Shares are listed and posted for trading on the Amsterdam Stock Exchange (the "ASE").


5. Pink Elephant uses the services of ABN AMRO Bank of Holland (the "Plan Administrator") in connection with the Plans. The Plan Administrator is not registered under the Act.


6. Residents of Ontario of record hold not more than 10% of all of the issued and outstanding shares of common stock of Parentco, and the number of Ontario residents of record holding shares of common stock of Parentco is not more than 10% of the total number of holders of shares of common stock of Parentco.


7. The Plans were established for the benefit of eligible employees of Parentco and its subsidiaries, including Ontario employees of Pink Elephant (the "Ontario Employees").


8. Pursuant to the Plans, Ontario Employees will be offered stock options ("Options") to purchase the Plan Shares.


9. As of November 6, 2000 there were approximately 72 Ontario Employees who were eligible to participate in the Plans.


10. An exemption from section 25 of the Act is not available for trades in the Plan Shares that are (i) made by former Ontario Employees directly over the ASE or otherwise in accordance with paragraph (b) below, (ii) made by the Plan Administrator on behalf of former Ontario Employees or (iii) made by the Plan Administrator on behalf of the legal representatives of former Ontario Employees.


11. Because there is no market in Ontario for the Plan Shares and none is expected to develop, any resale of the Plan Shares will be effected through the facilities of and in accordance with the rules of the ASE or otherwise in accordance with paragraph (b) below.


AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest,


IT IS RULED, pursuant to subsection 74(l) of the Act, that first trades in Plan Shares made by (i) former Ontario Employees directly over the ASE or otherwise in accordance with paragraph (b) below, (ii) the Plan Administrator on behalf of former Ontario Employees, or (iii) the Plan Administrator on behalf of the legal representatives of former Ontario Employees will not be subject to section 25 of the Act provided that:


(a) at the time of such first trade neither Parentco or Pink Elephant are reporting issuers under the Act; and


(b) such first trade is executed


(i) through the facilities of a stock exchange outside Ontario;


(ii) on the Nasdaq Stock Market; or


(iii) on the Stock Exchange Automated Quotation System of the London Stock Exchange Limited.


December 22, 2000.


J. A. Geller, R. Stephen Paddon