Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications -- French-based issuer acquired all of theissued and outstanding securities of TSX-listed issuer by wayof a plan of arrangement -- as a result of the arrangement,acquired issuer has no securities, including debt securities,outstanding other than i) common shares owned by acquiror issuer,and ii) options issued under a stock option plan -- under thearrangement, the terms of the options were amended so that theynow represent options to acquire shares of acquiror issuer --acquired issuer deemed to have ceased to be a reporting issuer.

Applicable Ontario Statutory Provisions

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

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, ONTARIO, QUÉBEC, NOVA

SCOTIA, NEWFOUNDLAND AND LABRADOR,AND THE YUKON TERRITORY

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

IMAGICTV INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Ontario, Québec,Nova Scotia, Newfoundland and Labrador, and the Yukon Territory(the "Jurisdictions") has received an applicationfrom ImagicTV Inc. ("ImagicTV") for a decision pursuantto the securities legislation, regulations, rules and/or policiesof the Jurisdictions (the "Legislation") that ImagicTVbe deemed to have ceased to be a reporting issuer under theLegislation;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this Application;

AND WHEREAS, unless otherwise definedherein the terms herein have the meaning set out in NationalInstrument 14-101 Definitions or in Québec CommissionNotice 14-101;

AND WHEREAS ImagicTV has representedto the Decision Makers that:

1. ImagicTV was incorporated in 1997 underthe name "imagicTV Inc." In 1998, ImagicTV changedits name to "ImagicTV Inc." ImagicTV's corporateheadquarters are located at One Brunswick Square, 14th Floor,Saint John, New Brunswick E2L 3Y2.

2. ImagicTV became a reporting issuer in November2000 pursuant to an initial public offering of the ImagicTVShares in all provinces and territories of Canada. ImagicTVis not on the list of defaulting reporting issuers maintainedby the Decision Makers.

3. ImagicTV's authorized capital consistsof an unlimited number of common shares (the "ImagicTVShares") and an unlimited number of preferred sharesissuable in series. As at April 29, 2003, there were 24,813,218ImagicTV Shares issued and outstanding and no preferred shareswere issued or outstanding. As at April 29, 2003, optionsto acquire 2,623,834 ImagicTV Shares were granted and outstandingpursuant to ImagicTV's employee stock option plans (the "ImagicTVOptions").

4. The ImagicTV Shares were formerly listedand posted for trading on the TSX (symbol: IMT) and were alsoformerly quoted on the Nasdaq (symbol: IMTV).

5. Alcatel is a company organized under thelaws of France. The Class A shares of Alcatel (the "AlcatelShares") are listed on Euronext Paris among other non-Canadianstock exchanges. Alcatel Shares are also listed on The NewYork Stock Exchange (the "NYSE") in the form ofClass A American Depository Shares ("Alcatel ADSs")(symbol:ALA). Each Alcatel ADS is equivalent to one Alcatel Share,and can be exchanged for Alcatel Shares in accordance withthe provisions of the Alcatel ADSs.

6. On April 30, 2003, Alcatel acquired directlyor indirectly all of the outstanding ImagicTV Shares (excludingshares held by or on behalf of Alcatel) by way of a plan ofarrangement (the "Arrangement") under section 192of the Canada Business Corporations Act (the "CBCA").

7. As a result of the Arrangement, the termsof the ImagicTV Options have been amended so that the ImagicTVOptions now represent options to acquire Alcatel Shares (the"Revised Options"), each such Revised Option tobe exercisable for a number of Alcatel Shares at an exerciseprice in Euros per Alcatel Share based on the exchange ratioand the Euro exchange rate as determined pursuant to the ArrangementAgreement.

8. As a result of the Arrangement, Alcatel,through its subsidiaries, beneficially owns all of the ImagicTVShares. ImagicTV has no securities, including debt securities,outstanding other than

i) the ImagicTV Shares beneficially ownedindirectly by Alcatel, and

ii) the Revised Options, which might possiblybe considered to be securities of ImagicTV (although holdersthereof have no economic interest in ImagicTV and thus,from a Canadian securities law perspective, should be moreproperly viewed as securities of Alcatel).

9. There are approximately 104 holders ofRevised Options, of whom 90 are resident in New Brunswickand of whom one is resident in Nova Scotia. No other holderof Revised Options is resident in Canada.

10. The ImagicTV Shares were delisted fromthe TSX on April 30, 2003 and from the Nasdaq on April 30,2003. No securities of ImagicTV are listed or quoted on anyother exchange or market.

11. ImagicTV does not intend to seek financingby way of an offering of its securities to the public.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers pursuantto the Legislation is that ImagicTV is deemed to have ceasedto be a reporting issuer under the Legislation.

June 3, 2003.

"Harold P. Hands"
"Robert W. Korthals"