Clearwave N.V. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- issuer has 35 beneficial security holders, of which 33 are resident in Canada -- Issuer has more than 15 security holders resident in Quebec and will not be deemed to have ceased to be a reporting issuer in Quebec -- issuer provided undertaking not to offer or distribute its securities in any jurisdiction in Canada by way of an exemption from the prospectus and registration requirements of the securities legislation of any jurisdiction in Canada until the Filer has ceased to be a reporting issuer in every jurisdiction in Canada -- 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 LEGISLATION OF

ALBERTA, SASKATCHEWAN, ONTARIO, NOVA SCOTIA,

NEW BRUNSWICK AND NEWFOUNDLAND AND

LABRADOR (the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

CLEARWAVE N.V. (the Filer)

MRRS DECISION DOCUMENT

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 be deemed to have ceased to be a reporting issuer in each of the Jurisdictions (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications

(a) the Ontario Securities Commission is the principal regulator for this application; and

(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. The Filer is a company incorporated on September 17, 1999 under the laws of The Netherlands as a public limited liability company (naamloze vennootschpap or N.V.) and was then called TIW Eastern Europe N.V. The Filer's head office is located in the World Trade Center, Strawinskylaan 707, 1077XX, Amsterdam, Netherlands.

2. The Filer is a reporting issuer in each of the Jurisdictions. The Filer is not a reporting issuer in any jurisdiction other than the Jurisdictions and Quebec.

3. No securities of the Filer are traded on a marketplace as defined in National Instrument 21-102 Marketplace Operation.

4. The Filer is not in default of any requirements under the Legislation.

5. As of June 30, 2004, 45,868,498 Class A Subordinate Voting Shares (the SVS) and 38,230,950 Class B Multiple Voting Shares (the MVS) of the Filer were issued and outstanding.

6. Telesystem International Wireless Inc. (TIW) owns all of the issued and outstanding MVS, and 45,859,289 of the issued and outstanding SVS.

7. Other than the SVS and the MVS, the Filer has no securities, including debt securities, issued and outstanding.

8. The Filer provides wireless telecommunication services in Romania and the Czech Republic through its two principal operating subsidiaries, MobiFon S.A. and Cesky Mobil a.s., over which it exercises control or direction on voting securities for approximately 63.5% and 50.8%, respectively.

9. TIW conducts its activities primarily through the Filer which represents its single largest asset. As a result, TIW's activities consist primarily in the activities of the Filer's operating subsidiaries MobiFon S.A. and Cesky Mobil a.s.

10. Prior to February 4, 2001, the Filer was a wholly-owned subsidiary of TIW.

11. On January 15, 2001, the Filer filed a non-offering prospectus the purpose of which was to have the Filer become a reporting issuer to prepare for the distribution of transferable rights by TIW to holders of TIW's outstanding shares of record.

12. For each share of TIW outstanding at the close of business on January 23, 2001, a holder thereof was entitled to one right. Two rights entitled the holder thereof to purchase one unit of TIW (a TIW Unit) at a price of CDN$9.05 per unit. Each unit was comprised of (i) one SVS and (ii) an option to purchase one subordinate voting share of TIW by surrendering the unit, at any time until the unit termination date of June 30, 2002.

13. The sole purpose of the Filer becoming a reporting issuer was to enable the SVS to be qualified for distribution in the TIW Units.

14. The January 15, 2001 prospectus was a non-offering prospectus and did not constitute a public offering of any securities.

15. After TIW's distribution of the SVS in the TIW Units, an aggregate of 45,868,498 SVS were held publicly through TIW Units.

16. The indenture governing the TIW Units provided, among others, that if the value of the SVS outstanding on the termination date of the TIW Units (June 30, 2002) was less than US$ 100 million, all holders of TIW Units would be deemed to have exercised the option to surrender the TIW Units for a share of TIW.

17. On February 4, 2002, pursuant to a restructuring of TIW, the Ontario Court of Justice rendered a decision which, among others, struck down the deemed exchange clause in the indenture governing the TIW Units. Thereafter, TIW repurchased 73.5% of all TIW Units outstanding in an issuer bid as part of its restructuring.

18. On June 30, 2002, the TIW Units terminated and the holders thereof received one SVS for each TIW Unit held.

19. Beginning in October 2003, TIW began repurchasing the SVS in private transactions with certain significant minority holders.

20. Pursuant to such purchases, TIW acquired an additional 11,951,925 SVS from three holders such that, as of March 31, 2004, TIW held, directly or indirectly, 45,681,938 SVS and 38,230,950 (corresponding to all issued and outstanding) MVS representing a direct and indirect equity and voting interest in the Filer of 99.8% and 99.9% respectively.

21. The Filer made an offer to purchase the remaining 186,560 of the outstanding SVS, which expired on July 15, 2004. As a result of this offer, only 9,209 SVS remain in the hands of public holders other than TIW and its subsidiaries, representing 0.01% of the outstanding voting shares of the Filer.

22. It is TIW's intention to exercise, within the next year, its right of expropriation of the remaining SVS as set out in the laws of the Netherlands.

23. To the Filer's knowledge, as at August 17, 2004 the Filer had 35 beneficial security holders, of which 24 were resident in Quebec, 5 were resident in Ontario, 1 was resident in Alberta, 2 were resident in British Columbia, and 3 were resident outside of Canada.

24. Because the Filer has more than 15 security holders resident in Quebec, the Autorité des marchés financiers (the Autorite) will not deem the Filer to have ceased to be a reporting issuer in Quebec. On August 17, 2004 the Autorite granted the Filer permanent relief from the continuous disclosure requirements of Title III of the Securities Act (Québec) applicable to the Filer.

25. The Filer will submit an application to the Autorite to be deemed to have ceased to be a reporting issuer in Quebec as soon as there are fewer than 15 security holders in Quebec.

26. The Filer has undertaken not to offer or distribute its securities in any jurisdiction in Canada by way of an exemption from the prospectus and registration requirements of the securities legislation of any jurisdiction in Canada until the Filer has ceased to be a reporting issuer in every jurisdiction in Canada.

27. The Filer has no present intention of seeking public financing by way of an offering of its securities.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides 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.

August 27, 2004.