4453794 Canada Inc. - MRRS Decision

MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Application by reporting issuer for a decision that it is not a reporting issuer. Requested relief granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)b.

February 4, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC, ONTARIO AND ALBERTA

(THE "JURISDICTIONS")

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

4453794 CANADA INC.,

SUCCESSOR IN INTEREST TO PROMATEK INDUSTRIES LTD.

(THE "FILER")

 

MRRS DECISION DOCUMENT

(Translation)

Background

The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") , that the Filer is not a reporting issuer (the "Requested Relief").

Under the Mutual Reliance Review System for Exemptive Relief Applications ("MRRS"):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Filer:

1. Copitrak Inc. ("Copitrak") is the corporation which resulted from the amalgamation of Promatek Industries Ltd. ("Promatek") with 6809618 Canada Inc. ("680") on November 6, 2007 pursuant to the privatization transaction described below.

2. On November 19, 2007, Copitrak's sole shareholder, 146567 Canada Inc. ("146"), amalgamated with Copitrak International Inc. and V. Y. Holdings Inc. (the "Second Step Amalgamation") to form Copitrak International Inc., whose name was changed on November 21, 2007 to Copitrak Inc. (the "Shareholder").

3. Following the Second Step Amalgamation, Copitrak changed its name to 4453794 Canada Inc. (the "Filer") and transferred all of its assets to the Shareholder (the "Asset Transfer").

4. The Filer is a reporting issuer in the Jurisdictions, as a result of being the successor to Promatek.

5. Prior to the Asset Transfer, the Filer was a design and manufacturing company whose products serve the professional charge-back market.

6. The head office of the Filer is located at 8390 Mayrand, Montreal, Quebec H4P 2C9.

7. The authorized capital of the Filer consists of an unlimited number of common shares (the "Common Shares") and an unlimited number of preferred shares (the "Preferred Shares"), of which 2,000,001 Common Shares were issued and outstanding as of January 10, 2008.

8. The common shares of Promatek (the "Promatek Shares") were listed on the Toronto Stock Exchange (the "TSX").

9. As of the date of the Application, the Filer was not in default of any of its obligations under the Legislation as a reporting issuer. Currently, the Filer is not in default of any of its obligations under the Legislation as a reporting issuer, other than its obligation to file its interim financial statements for the period ended September 30, 2007, its Management Discussion and Analysis in respect of such financial statements as required under the National Instrument 51-102, Continuous Disclosure Obligations and the related certification of such financial statements as required under Multilateral Instrument 52-109, Certification of Disclosure in Issuers' Annual and Interim Filings all of which became due on November 14, 2007.

10. On September 4, 2007, Promatek entered into a Business Combination Agreement (the "Agreement") with its principal shareholders pursuant to which the latter agreed to acquire all of the outstanding Promatek Shares not already held by them.

11. Under the terms of the Agreement, Les Placements Arlev Inc. ("Arlev"), 9086-2301 Québec Inc. ("9086"), 146 and 680, the holding companies of Mark Levine, the then President and Chief Executive Officer of Promatek, and Arthur Levine, the then Chairman and Vice-President, Business Development of Promatek, who together held, both directly and indirectly, approximately 54.52% of the outstanding Promatek Shares, agreed that 680 shall amalgamate (the "Amalgamation") with Promatek pursuant to the provisions of the Canada Business Corporations Act to form a newly amalgamated corporation, Copitrak.

12. On November 6, 2007, the effective date of the Amalgamation (the "Effective Date"), Arlev, 9086, 146, 680 and Promatek entered into an Amalgamation Agreement setting forth the terms of the Amalgamation, which were as follows:

a) on the Effective Date, the shareholders of Promatek other than 680 received one Preferred Share for each Promatek Share held (no dissent rights were exercised by any holders of Promatek Shares). No share certificates were issued in respect of the Preferred Shares and such shares were evidenced by certificates representing the Promatek Shares. All of the Preferred Shares were redeemed automatically on November 9, 2007 for a cash consideration per share of $2.00, except for 26,000 Preferred Shares beneficially held by a single shareholder which were redeemed on November 20, 2007, upon the written request of such shareholder submitted in accordance with the provisions of the articles of amalgamation creating the Preferred Shares. The consideration of $2.00 per share was set in accordance with a Valuation and Fairness Opinion prepared by Nexia Friedman LLP, which established the fair market value of the Promatek Shares to be in the range of $1.93 to $2.15, and the recommendation of the special committee of the Board of Directors of Promatek formed to consider the Amalgamation;

b) the 1,990,356 Promatek Shares held by 680 were cancelled for no consideration; and

c) 146, being the sole shareholder of 680, received one Common Share for each Class "A" shares held in 680.

13. As of the Effective Date, 146 became the holder of 2,000,001 Common Shares and, as of November 20, 2007, the sole security holder of Copitrak. As a result of the Second Step Amalgamation, the Shareholder became the holder of the 2,000,001 Common Shares previously owned by 146.

14. The completion of the Amalgamation was subject to customary terms and conditions, including regulatory approval and the approval of the holders of Promatek Shares holding at least 66 2/3% of the Promatek Shares, and a majority of the Promatek Shares which are not controlled by either Mark Levine or Arthur Levine, present in person or by proxy at a special meeting called by Promatek in order to obtain such approval.

15. A Management Proxy Circular and Letters of Transmittal were mailed on or about October 11, 2007 to shareholders of Promatek. The Letters of Transmittal were to be executed and returned, together with the certificates representing Promatek Shares, to Computershare Investor Services Inc. at its principal office in Montréal or Toronto in order for shareholders to receive the consideration to which they are entitled as the holders of Preferred Shares.

16. Shareholders' approval of the Amalgamation was obtained at the annual and special meeting of shareholders of Promatek which was held on November 5, 2007.

17. Regulatory approval of the Amalgamation was obtained, and a bulletin was issued by the TSX on November 9, 2007 announcing the delisting of the Promatek Shares at the close of business on Monday, November 12, 2007.

18. No securities of the Filer are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operation.

19. The outstanding securities of the Filer, 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.

20. The Filer has no current intention to seek public financing by way of an offering of securities.

21. The Filer has applied for relief in order to cease to be a reporting issuer in all of the jurisdictions in Canada in which it is currently a reporting issuer.

22. The Filer, upon the grant of the Requested Relief, will no longer be a reporting issuer or the equivalent in any jurisdiction in Canada.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provided the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted.

"Marie-Christine Barrette"
Chef du Service de l'information financière
Autorité des marchés financiers