Mutual Reliance Review System for ExemptiveRelief Applications -- Relief granted, subject to certain conditions,from the prospectus and registration requirements in respectof trades in connection with a capital reorganization transaction.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 35(1)12.ii., 35(1)15., 53, 72(1)(f)(ii), 72(1)(i), 74(1).
Applicable Ontario Rule
Ontario Securities Commission Rule 45-501 ExemptDistributions.
Applicable Multilateral Instrument
Multilateral Instrument 45-102 Resale of Securities.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, ONTARIO AND QUÉBEC
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
GE CANADA ENTERPRISES COMPANYAND
TRIPLE G SYSTEMS GROUP, INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker")in each of Alberta, Ontario and Québec (collectively,the "Jurisdictions") has received an applicationfrom GE Canada Enterprises Company ("GE Canada")and Triple G Systems Group, Inc. ("Triple G")(collectively, the "Filer") for a decisionpursuant to the securities legislation of the Jurisdictions(the "Legislation") that certain trades ofsecurities contemplated by the proposed capital reorganizationtransaction (the "Transaction") involving GECanada and Triple G to be effected by way of a reorganizationof Triple G's capital structure shall be exempt from the dealerregistration and prospectus requirements of the Legislation;
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 defined,the terms herein have the same meaning set out in National Instrument14-101 Definitions;
AND WHEREAS the Filer has representedto the Decision Makers that:
1. GE Canada and Triple G entered into a transactionagreement made as of June 25, 2003 (the "TransactionAgreement") providing for the Transaction to be effectedby way of a reorganization of Triple G's capital structure(the "Capital Reorganization") involvingthe amending of the articles of incorporation of Triple Gto change the common shares of Triple G ("Triple GCommon Shares"), other than Triple G Common Sharesheld by Dissenting Shareholders (defined below), into a newclass of exchangeable shares of Triple G (the "ExchangeableShares") and the automatic transfer of the ExchangeableShares to GE Canada in exchange for $3.30 in cash per share(the "GE Canada Exchange Consideration")through a series of transactions to holders of Triple G CommonShares ("Triple G Shareholders") all as moreparticularly described in representations 5 and 6 below.
2. GE Canada is an unlimited liability companyincorporated pursuant to the laws of the province of NovaScotia and is a wholly-owned subsidiary of General ElectricCompany. The authorized capital of GE Canada consists of 100,000,000common shares and 1,000,000 tracking shares. To its knowledge,GE Canada is not in default of any applicable requirementof the Legislation. GE Canada's registered office is locatedat Suite 900, 1959 Upper Water Street, Halifax, Nova ScotiaB3J 3N2.
3. Triple G is a company incorporated underthe Business Corporations Act (Ontario) (the "OBCA")and is a reporting issuer or equivalent in British Columbia,Alberta and Ontario. Triple G is not a reporting issuer inQuébec. To its knowledge, Triple G is not in defaultof any applicable requirement of the Legislation. Triple G'sregistered office is located at Suite 600, 3100 Steeles AvenueEast, Markham, Ontario L3R 8T3.
4. The authorized share capital of TripleG consists of an unlimited number of Triple G Common Sharesand an unlimited number of Class A preference shares ("TripleG Preferred Shares"). As of June 25, 2003, therewere 22,602,739 Triple G Common Shares issued and outstandingand no Triple G Preferred Shares issued and outstanding. TheTriple G Common Shares are currently listed and posted fortrading on the Toronto Stock Exchange (the "TSX").
5. The Capital Reorganization will consistof the following:
(a) an amendment will be made to the articlesof incorporation of Triple G to create a new class of ExchangeableShares ranking junior to the Triple G Preferred Shares andequal to the Triple G Common Shares and having the followingprincipal conditions:
(i) each Exchangeable Share will be automaticallytransferred to GE Canada at the Closing Date (definedbelow) in exchange for the GE Canada Exchange Consideration,
(ii) the Exchangeable Shares will becomeconvertible at the option of the holder thereof into TripleG Common Shares; and
(b) an amendment to the articles of incorporationof Triple G to change the Triple G Common Shares (otherthan Triple G Common Shares held by any Dissenting Shareholders(defined below)) into Exchangeable Shares at the ClosingDate on the basis of one Exchangeable Share for each TripleG Common Share.
6. Triple G Common Shares that are issuedand outstanding immediately prior to the Closing Date andthat are held by a Triple G Shareholder who, in connectionwith the Transaction, has exercised his or her right to dissentpursuant to and in compliance with the requirements of Section185 of the OBCA ("Dissent Right"; holderof a Dissent Right a "Dissenting Shareholder"),will thereby become entitled to receive the fair value ofhis or her Triple G Common Shares from Triple G pursuant toSection 185 of the OBCA.
7. Subject to the approval of the amendmentsto the articles of incorporation by the Triple G Shareholdersoutlined in representation 5 above at a special meeting anticipatedto be held on August 13, 2003 (the "Triple G Meeting")to consider a special resolution approving the Capital Reorganization(the "Special Resolution"), at the ClosingDate, the Capital Reorganization will be implemented throughthe occurrence of the following steps in the following order:
(a) each Triple G Common Share, other thanTriple G Common Shares held by Dissenting Shareholders,will be changed into one Exchangeable Share;
(b) each Exchangeable Share will be transferredautomatically to GE Canada, in exchange for the GE CanadaExchange Consideration; and
(c) GE Canada may, at its option, convertthe Exchangeable Shares acquired by it as contemplated aboveinto Triple G Common Shares on a share-for-share basis inaccordance with the share conditions of the ExchangeableShares.
8. The steps outlined in representations 7(a)and (b) above (collectively, the "Trades")will occur automatically, without any further action beingtaken by Triple G Shareholders, upon filing the Triple G articlesof amendment to effect the Capital Reorganization, no laterthan the second business day following all conditions precedentto the Transaction having been satisfied or waived or suchother date as may be agreed to by Triple G and GE Canada (the"Closing Date").
9. Under the OBCA, the Special Resolutionwill require, among other things, the favourable vote of atleast two-thirds of the votes cast by Triple G Shareholders("Shareholder Approval").
10. In connection with the Triple G Meeting,Triple G mailed to Triple G Shareholders a management informationcircular (the "Triple G Circular"), a formof proxy and a letter of transmittal. In addition to containinga detailed description of the Transaction, the Triple G Circularhas been prepared in conformity with the provisions of theSecurities Act (Ontario) and contains information insufficient detail to permit Triple G Shareholders to forma reasoned judgment concerning the matters to be placed beforethem at the Triple G Meeting. The Triple G Circular has beenfiled on SEDAR.
11. A Triple G Shareholder will make one fundamentalinvestment decision at the time when such holder votes inrespect of the Transaction and/or determines whether to dissentin respect thereof. As a result of this decision, a TripleG Shareholder will ultimately receive the GE Canada ExchangeConsideration in exchange for the Exchangeable Shares heldby such holder or payment of the fair value of the TripleG Common Shares formerly held by such holder.
12. As a consequence of the share terms forthe Exchangeable Shares and the letter of the TSX grantingconditional listing approval for the Exchangeable Shares,the Exchangeable Shares will be delisted from the TSX immediatelyfollowing the Closing Date.
13. Upon the closing of the Transaction onthe Closing Date, GE Canada will own 100% of the outstandingequity of Triple G.
14. GE Canada intends to cause Triple G tomake an application to have Triple G deemed to have ceasedto be a reporting issuer after the Closing Date.
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 the registration and prospectus requirementsof the Legislation shall not apply to the Trades provided that:
A. Shareholder Approval is obtained at theTriple G Meeting; and
B. the first trade in any security acquiredpursuant to this Decision in a Jurisdiction shall be deemedto be a distribution or primary distribution to the publicunder the Legislation of such Jurisdiction.
August 12, 2003.
"Harold P. Hands"
"Paul K. Bates"