Perle Systems Limited - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- upon completion of consolidation, outstanding securities of issuer held by less than 15 security holders -- issuer deemed to have ceased being a reporting issuer.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am. s. 83.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA, SASKATCHEWAN, ONTARIO, QUEBEC,

NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

PERLE SYSTEMS LIMITED

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia and Newfoundland and Labrador (collectively, the "Jurisdictions") has received an application from Perle Systems Limited ("Perle") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation"), in connection with Perle's consolidation of outstanding common shares on the basis of 1 new share for every 2 million old shares (the "Consolidation"), that Perle shall be deemed to have ceased to be a reporting issuer for the purposes of the Legislation;

AND WHEREAS pursuant to the Mutual Reliance Review System for exemptive relief applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS Perle has represented to the Decision Makers as follows:

1. Perle is a corporation incorporated under the laws of the Province of Ontario.

2. Perle is a reporting issuer in each of the Jurisdictions. Perle is not a reporting issuer any other jurisdiction in Canada.

3. Perle's authorized share capital consists of an unlimited number of common shares (the "Common Shares").

4. Royal Capital Management Inc. ("Roycap") is a private equity investment company based in Toronto, Ontario.

5. On October 17, 2003, Perle and Roycap entered into a subscription and support agreement (the "Agreement") pursuant to which Roycap agreed to subscribe for 500 million Common Shares in satisfaction of Cdn$20 million of debt owed by Perle to Roycap.

6. The Agreement further provided that, following Roycap's subscription for the 500 million Common Shares and subject to shareholder approval, Perle would complete the Consolidation, leaving Roycap the sole remaining shareholder holding at least one whole new Common Share.

7. On November 28, 2003, Perle filed articles of amendment to effect the Consolidation, resulting in 250 post-consolidation Common Shares remaining outstanding, all of which were held by Roycap.

8. All outstanding securities of Perle, including debt securities, are beneficially owned, directly or indirectly, by less than 15 security holders in each of the jurisdictions in Canada and less than 51 security holders in total in Canada.

9. Effective October 7, 2003, the outstanding Common Shares were de-listed from the Toronto Stock Exchange. Consequently, no securities of Perle are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operation.

10. Perle has not mailed to its securityholders or filed its annual financial statements for the fiscal year ended May 31, 2003 or interim financial statements for the fiscal periods ended August 31, 2003 and November 30, 2003.

11. Other than described in paragraph 10 above, Perle is not in default of any of its obligations under the Legislation as a reporting issuer.

12. Perle has no intention of seeking public financing by way of an offering of securities.

AND WHEREAS pursuant to the System, this MRRS decision document evidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation provides that Decision Makers with the Jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers in the Jurisdictions pursuant to the Legislation is that Perle is deemed to have ceased to be a reporting issuer under the Legislation.

February 17, 2004.