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Turbosonic Technologies, Inc. and Turbosonic Canada, Inc. - s. 144
Headnote
Variation of a 1997 ruling thatextends relief from the registration and prospectus requirementsto certain trades upon the exchange of previously issued exchangeableshares that will occur after the original relief technicallyexpires.
Statutes Cited
Securities Act, R.S.O. 1990,c. S.5, as am., ss. 25, 53, 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED(the "Act")
AND
IN THE MATTER OF
TURBOSONIC TECHNOLOGIES, INC.AND
TURBOSONIC CANADA, INC.
ORDER
(Section 144)
UPON the applicationof Turbosonic Technologies, Inc. ("Turbosonic U.S.")and Turbosonic Canada, Inc. ("Turbosonic Canada")to the Ontario Securities Commission (the "Commission")for an order pursuant to section 144 of the Act that the ruling(the "Original Ruling") dated August 22, 1997 in favourof Turbotak Technologies Inc., Sonic Canada, Inc. and SonicEnvironment Systems, Inc. be varied so that the requirementscontained in sections 25 and 53 of the Act to be registeredto trade in a security and to file and obtain a receipt fora preliminary prospectus and a prospectus (the "Registrationand Prospectus Requirements") shall not apply, subjectto certain terms and conditions, to any trades after June 30,2002 of common shares of Turbosonic U.S. to holders of exchangeableshares of Turbosonic Canada ("Exchangeable Shares")upon the exchange (either automatic or otherwise) of such holder'sExchangeable Shares;
AND UPON consideringthe application and the recommendation of the staff of the Commission;
AND UPON Turbosonic U.S.and Turbosonic Canada having represented to the Commission asfollows:
1. Pursuant to the OriginalRuling, certain trades in securities to be made in connectionwith a plan of arrangement (the "Plan of Arrangement")involving Turbotak Technologies Inc., Sonic Canada, Inc. andSonic Environment Systems, Inc., including trades of commonshares of Turbosonic U.S. to holders of Exchangeable Sharesupon the exchange (either automatic or otherwise) of suchholder's Exchangeable Shares, were exempted from the Registrationand Prospectus Requirements, subject to certain terms andconditions.
2. The Plan of Arrangementwas implemented upon the receipt of the final order of theOntario Court (General Division) dated August 26, 1997 andthe filing of articles of arrangement on August 30, 1997.Pursuant to the articles of arrangement, Sonic Canada, Inc.changed its name to Turbosonic Canada, Inc. By certificateof amendment dated August 27, 1997, and pursuant to the lawsof the state of Delaware, Sonic Environmental System, Inc.changed its name to Turbosonic Technologies, Inc.
3. Of the 8,119,589 ExchangeableShares originally issued to Ontario residents pursuant tothe Plan of Arrangement, 4,594,720 have not been exchangedas of June 20, 2002. This represents approximately 56% ofthe issued and outstanding Exchangeable Shares (with the balanceof the Exchangeable Shares being held by Turbosonic U.S.,post-exchange) and represents approximately 44%, on an exchangedbasis, of the issued and outstanding common shares of TurbosonicU.S. The Exchangeable Shares (other than those held by TurbosonicU.S. following exchanges to date) are held by 25 differentshareholders, of which several are directly or indirectlycontrolled by others. These 25 shareholders represent lessthan 2% of the common shareholders of Turbosonic U.S.
4. The Original Ruling containeda representation in paragraph 23 that the Automatic RedemptionDate (as defined therein) in respect of the Exchangeable Sharesis June 30, 2002. By virtue of this representation and theuse of the defined term "Automatic Redemption Date"in the Original Ruling, certain of the relief granted in theOriginal Ruling automatically expires as of June 30, 2002.
5. On June 20, 2002, the boardsof directors of each of Turbosonic Canada and Turbosonic U.S.on June 20 determined that it would be appropriate extendthe Automatic Redemption Date of the Exchangeable Shares fromJune 30, 2002 to June 30, 2007 and approved the filing ofarticles of amendment for Turbosonic Canada to give effectto such extension. The filing of such articles of amendmentwas also approved by the shareholders of Turbosonic Canadain accordance with applicable laws at a meeting of the shareholdersof Turbosonic Canada held on June 20, 2002. U.S. counsel toTurbosonic U.S. has advised management of Turbosonic U.S.that there are no substantive U.S. securities laws issuesraised by the proposed extension of the Automatic RedemptionDate.
6. After June 30, 2002, noexemption from the Registration and Prospectus Requirementswill be available for any trades of common shares of TurbosonicU.S. to holders of Exchangeable Shares upon the exchange (automaticor otherwise) of such holder's Exchangeable Shares.
7. Turbosonic Canada was incorporatedunder the laws of the province of Ontario on July 11, 1997in order to facilitate the Plan of Arrangement. TurbosonicCanada is not, and has no present intention of becoming, areporting issuer under the Act. The authorized share capitalof Turbosonic Canada consists of an unlimited number of commonshares, of which 100 common shares have been issued and areheld by Turbosonic U.S., and an unlimited number of ExchangeableShares, of which 8,119,589 are issued and are held as setout in paragraph 3 above. The Exchangeable Shares are notlisted for trading on any stock exchange or quoted on anyquotation and trade reporting system.
8. Turbosonic U.S. is subjectto the reporting requirements of the United States SecuritiesExchange Act of 1934, as amended, (the "Exchange Act").Turbosonic U.S. is not, and has no present intention of becoming,a reporting issuer under the Act or under the securities legislationof any other jurisdiction in Canada. Management of TurbosonicU.S. estimates that, taking into account shares held in streetname, there are between 1,500 and 3,000 Turbosonic U.S. shareholders,most of whom are resident in the United States or Europe.Turbosonic U.S. shares trade on the OTC Bulletin Board Serviceoperated by the National Association of Securities Dealers,Inc. in the United States.
AND UPON the Commissionbeing satisfied that to do so would not be prejudicial to thepublic interest;
IT IS ORDERED that theOriginal Ruling be varied so that the Registration and ProspectusRequirements shall not apply to any trades of common sharesof Turbosonic U.S. made after June 30, 2002 to holders of ExchangeableShares upon the exchange (either automatic or otherwise) ofsuch holder's Exchangeable Shares, provided that the first tradeof any such common shares of Turbosonic U.S. acquired pursuantto this order shall be deemed to be a distribution unless theconditions of subsection (1)(a) and (c) of section 2.14 of MultilateralInstrument 45-102 are satisfied.
June 25, 2002.
"H. Lorne Morphy" "RobertL. Shirriff"