DC DiagnostiCare Inc. - MRRS Decision

MRRS Decision

Headnote

MutualReliance Review System for Exemptive Relief Applications - Compulsoryacquisition procedure - exemption from the requirement to makeup, certify, file and send and deliver, as the case may be, anannual report, annual financial statements, for the year endedSeptember 30, 2001, and interim financial statements for the firstquarter ended December 31, 2001. Section5.1 of Ontario Securities Commission Rule 51-501 - AIF and MD&A- Compulsory acquisition procedure - exemption from the requirementto file and send and deliver, as the case may be, an annual informationform and annual management's discussion and analysis of financialcondition and results of operations for the year ended September30, 2001, and interim management's discussion and analysis offinancial condition and results of operations for the first quarterended December 31, 2001.

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c.S.5, as am, s. 77, 78, and 79, s.80(b)(iii),

RulesCited

OSCRule 51-501- AIF and MD&A - ss. 2.1, 3.1, 4.1 and 4.3, s.5.1

INTHE MATTER OF

THESECURITIES LEGISLATION OF

ONTARIO,ALBERTA AND BRITISH COLUMBIA

AND

INTHE MATTER OF

THEMUTUAL RELIANCE SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

DCDIAGNOSTICARE INC.

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the"Decision Maker") in each of Ontario, Albertaand British Columbia (the "Jurisdictions")has received an application from DC DiangostiCare Inc. (the"Filer") for:

(i) a decision under the securities legislation of each of theJurisdictions (the "Legislation") that therequirements contained in the Legislation to make up, certify,prepare, file and send and deliver to the registered holdersof the Filer's common shares (the "Common Shares"),as the case may be, its:

(a) interim financial statements (the "Interim Financials")for the first quarter ended December 31, 2001 (the "FirstQuarter");

(b) comparative financial statements (the "Annual Financials")for the financial year ended September 30, 2001 (the "Year2001"); and

(c) report (the "Annual Filing") for the Year2001;


shallnot apply to the Filer; and

(ii) in Ontario only, an order pursuant to Ontario SecuritiesCommission Rule 51-501 - AIF and MD&A ("Rule 51-501"),that the requirements contained in Rule 51-501 to prepare, fileand send and deliver to the registered holders of the CommonShares, as the case may be, its:

(a) annual information form (the "AIF") forthe Year 2001;

(b) annual management's discussion and analysis of financialcondition and results of operations (the "Annual MD&A")for Year 2001; and

(c) interim management's discussion and analysis of financialcondition and results of operations (the "Interim MD&A")for the First Quarter;


shallnot apply to the Filer.

ANDWHEREAS pursuant to the Mutual Reliance Review Systemfor Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;


ANDWHEREAS the Filer has represented to the Decision Makersas follows: 1.The Filer is a corporation formed under the laws of the Provinceof British Columbia on July 12, 1996 pursuant to the amalgamationof DC DiagnostiCare Inc. and Camelot Industries Inc. 2.The Filer's principal office is located at Suite 100 - 12220 StonyPlain Road, Edmonton, Alberta, T5N 3Y4 and its registered officeis located at Suite 1600 - 609 Granville Street, Vancouver, BritishColumbia, V7Y 1C3. 3.Subsequent to the completion of the Offer (defined and more particularlydescribed below), approximately 93.4% of the outstanding CommonShares are indirectly held by Canadian Medical Laboratories Limited("CML"), a reporting issuer with its head officeand principal place of business located at 6560 Kennedy Road,Mississauga, Ontario, L5T 2X4, through its wholly-owned subsidiaryDiagnosticare Acquisition Limited (the "Offeror"). 4.The Filer is a reporting issuer in each of the Jurisdictions andis not in default of any of the requirements of the Legislation. 5.The Common Shares are listed for trading on The Toronto StockExchange (the "TSE"). 6.On October 22, 2001, the Offeror made a formal offer (the "Offer")by take-over bid to acquire all the issued and outstanding CommonShares for $0.60 per Common Share. 7.The Offer was originally set to expire on November 28, 2001 butwas extended to December 21, 2001 by a Notice of Extension datedDecember 7, 2001. 8.On November 28, 2001 and December 21, 2001, the Offeror acquireda total of 24,918,956 Common Shares, or approximately 93.4% ofthe 26,680,425 Common Shares outstanding as atDecember 21, 2001. 9.The Offeror intends to acquire as soon as possible, pursuant tosection 255 of the Company Act (British Columbia) (the"Compulsory Acquisition Right"), all outstandingCommon Shares which were not acquired by the Offeror under theOffer. Pursuant but subject to the Company Act (BritishColumbia), the Offeror has the absolute right to acquire all CommonShares not currently owned by it. 10.In order to exercise the Compulsory Acquisition Right, the Offerormust first be continued as a company under the Company Act(British Columbia). 11.Effective January 17, 2002, the Offeror has continued as a companyunder the Company Act (British Columbia) and is accordinglyable to exercise the Compulsory Acquisition Right. 12.The Offeror intends to give written notice (the "Notice")of its intention to exercise the Compulsory Acquisition Rightto each holder of Common Shares who did not accept the Offer (eacha "Remaining Shareholder") very shortly, providingeach Remaining Shareholder with the option of: (a)transferring such holder's Common Shares to the Offeror for apurchase price of $0.60 per Common Share; or (b)making an application to the Supreme Court of British Columbia(the "Court"), within two months from the dateof the giving of the Notice in accordance with section 255 ofthe Company Act (British Columbia) upon which, the Courtmay: (i)set the price and terms of payment; and

(ii) make consequential orders and give directions the Courtconsiders appropriate.

13.Upon the expiry of two months after the date on which the Noticewas given, if no Remaining Shareholder has applied to the Courtwithin such time, the Offeror must send a copy of the Noticeto the Filer and pay or transfer to the Filer the amount representingthe price payable by the Offeror for the Common Shares whichthe Offeror is entitled and bound to acquire (the "PaymentProcedure"). Upon receipt of a copy of the Notice andthe payment referred to in the preceding sentence, the Filermust thereupon register the Offeror as a shareholder with respectto such Common Shares and the Offeror will become the sole shareholderof the Filer. 14.Unless a Remaining Shareholder makes an application to the Courtin accordance with section 255 of the Company Act (BritishColumbia), the Filer expects that the Offeror will, pursuantto the Compulsory Acquisition Right, become the sole shareholderof the Filer by the end of its second quarter ending March 31,2002. 15.If a Remaining Shareholder makes an application to the Courtin accordance with section 255 of the Company Act (BritishColumbia) and such application remains pending after the expiryof two months after the date on which the Notice was given,unless the Court has ordered otherwise, after that applicationhas been disposed of, the Offeror must follow the Payment Procedure.Upon receipt of a copy of the Notice and the payment requiredby the Payment Procedure and/or the Court, the Filer must thereuponregister the Offeror as a shareholder with respect to such CommonShares and the Offeror will become the sole shareholder of theFiler. 16.The Filer intends to seek to have the Common Shares de-listedfrom the TSE shortly. 17.Assuming the completion of the compulsory acquisition, the issuanceof this decision will allow the Filer to apply for an orderdeeming it to have ceased to be a reporting issuer in each ofthe Jurisdictions. 18.Absent the granting of the relief requested hereby, the Filerwould be required to make up, certify, prepare, file and sendand deliver to the registered holders of the Common Shares,as the case may be, the Interim Financials and the Interim MD&Abefore March 1, 2002. 19.Absent the granting of relief requested hereby, the Filer wouldbe required to make up, certify, prepare, file and send anddeliver to the registered holders of the Common Shares, as thecase may be, the Annual Financials, the Annual Filing, the AIFand the Annual MD&A before February 17, 2002. ANDWHEREAS pursuant to the System, this MRRS DecisionDocument evidences the decision of each Decision Maker (the"Decision"); ANDWHEREAS each Decision Maker is satisfied that the testcontained in the legislation that provides the Decision Makerwith the jurisdiction to make the Decision has been met; THEDECISION of the Decision Makers pursuant to the Legislationis that the requirements contained in the Legislation to makeup, certify, prepare, file and send and deliver to the registeredholders of the Common Shares, as the case may be, the InterimFinancials, the Annual Financials and the Annual Filing, shallnot apply to the Filer. February15, 2002. "MaryTheresa McLeod"       "H. Lorne Morphy"


ANDIT IS HEREBY ORDERED by the Director pursuant to section5.1 of Rule 51-501 that the requirements contained in Rule 51-501to file and send and deliver to the registered holders of theCommon Shares, as the case may be, the AIF, the Annual MD&Aand the Interim MD&A, shall not apply to the Filer.

February15, 2002. "JohnHughes"