Unique Broadband Systems, Inc.
Headnote
National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- Relief from take-over bid requirements in connection with a partial take-over bid for a maximum of 10 million shares of the Filer -- Filer is required to prepare and send a directors' circular not later than 15 days after the date of the Partial Bid -- Filer is insolvent and commenced proceedings under the CCAA -- Filer served a motion in the proceedings under the CCAA seeking, among other things, an interim stay of the Partial Bid -- Earliest date that the Motion can be heard is February 21, 2012 -- Filer intends to file a directors' circular on SEDAR on the earlier of (i) the 3rd day following the date on which a decision in respect of the Motion is released by the Court if the Partial Bid is not stayed, and (ii) February 27, 2012 if a decision in respect of the Motion has not yet been delivered and the Partial Bid is not otherwise stayed -- Relief granted subject to conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 95, 104(2)(b) and (c).
IN THE MATTER OF
THE SECURITIES LEGISLATION OF ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
UNIQUE BROADBAND SYSTEMS, INC.
(the Filer)
DECISION
Background
The securities regulatory authority in the Jurisdiction (the "Decision Maker") has received an application from the Filer for a decision for exemptive relief (the "Exemption Sought") under section 104(2) of the Securities Act (Ontario) (the "Act") and the corresponding provisions of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids ("MI 62-104") for an extension to the period of time within which the Filer is required to prepare and send a directors' circular to securityholders under section 95 of the Act (and the corresponding provisions of MI 62-104).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) The Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
"206 Ontario" means 2064818 Ontario Inc., a company incorporated under the Business Corporations Act (Ontario);
"CCAA" means the Companies' Creditors Arrangement Act;
"Common Shares" means the common shares in the capital of the Filer;
"Initial Order" means the order granted by the Ontario Superior Court of Justice under the CCAA on July 5, 2011; and
"Partial Bid" means the partial take-over bid for up to a maximum of 10,000,000 Common Shares at a price of $0.08 per Common Share made by 206 Ontario.
Representations
This decision is based on the following facts represented by the Filer:
1. the Filer is a corporation that was amalgamated under the Business Corporations Act (Ontario) on June 1, 1998;
2. the head office of the Filer is located in Milton, Ontario;
3. the Filer has authorized capital consisting of an unlimited number of Common Shares, of which 102,747,854 were outstanding as at February 14, 2012;
4. the Filer is a "reporting issuer" within the meaning of applicable securities legislation in each of the provinces of Canada;
5. the Filer's Common Shares are listed on the TSX Venture Exchange;
6. the Filer is not in default of securities legislation in any jurisdiction as at February 14, 2012;
7. the Filer is insolvent;
8. proceedings under the CCAA were commenced in respect of the Filer and its wholly owned subsidiary, UBS Wireless Services Inc., pursuant to the Initial Order;
9. the Initial Order includes a comprehensive stay of proceedings that, among other things, stays and suspends the exercise of rights and remedies by any person in respect of or that affects the Filer or its business;
10. on February 1, 2012, 206 Ontario commenced the Partial Bid;
11. on February 7, 2012, the Filer served a motion (the "Motion") in the proceedings under the CCAA among other things (a) seeking an interim stay of the Partial Bid; (b) seeking a determination as to whether the Partial Bid is stayed by the Initial Order; and (c) if the Bid is not stayed by the Initial Order, seeking a temporary stay of the Partial Bid until certain claims asserted by, among others, affiliates of 206 Ontario, and which are being disputed by the Filer, have been determined;
12. under the Act and MI 62-104, the Filer is required to prepare and send a directors' circular to every person to whom the bid was required to be sent not later than 15 days after the date of the bid, being February 16, 2012 in the circumstances;
13. under the Interim Order, the Filer is only permitted to carry on business in a manner consistent with the preservation of its business and property; the Filer has also submitted to the court a statement of cash flows prepared for purposes of the CCAA;
14. responding to the Partial Bid by preparing, translating, printing and mailing a directors' circular to every person to whom the bid was required to be sent, estimated to be approximately 15,000 shareholders, represents significant costs to the Filer, which are not contemplated in the statement of cash flows;
15. the Filer will, if necessary, seek permission from the court to take all necessary action to respond to the Partial Bid; however, it is premature for such permission to be granted until it is first determined in the Motion whether the Partial Bid does or does not breach the Initial Order and, if not, whether the Partial Bid should be stayed under the CCAA;
16. the earliest date that the Motion can be heard is February 21, 2012 and pending the determination of the Motion, it is unknown whether or not the Partial Bid will proceed or be temporarily stayed;
17. it is the intention of the Filer to file a directors' circular on SEDAR on the earlier of (i) the 3rd day following the date on which a decision in respect of the Motion is released by the Court if the Partial Bid is not stayed, and (ii) February 27, 2012 if a decision in respect of the Motion has not yet been delivered and the Partial Bid is not otherwise stayed;
18. if the Partial Bid is temporarily stayed, and if 206 Ontario continues to pursue the Partial Bid following the expiry or lifting of such temporary stay, the Filer intends to prepare and send a directors' circular within 10 days following the termination of any temporary stay of the Partial Bid;
19. the Filer will issue and file a news release informing shareholders that it will not be filing and delivering its directors' circular on February 16 and will do so by no later than February 27, 2012 if the Partial Bid is not stayed and, if required, within 10 days following the termination of any temporary stay of the Partial Bid; and
20. granting the Exemption Sought would not be prejudicial to the public interest as the required information will be provided to securityholders in due course if and when it is determined that the Partial Bid should proceed and in any event, by February 27, 2012 if the Partial Bid is not otherwise stayed.
Decision
The Decision Maker is satisfied that the decision meets the test set out in the Act for the Decision Maker to make the decision.
The decision of the Decision Maker under the Act is that the Exemption Sought is granted provided that the Filer:
(a) prepares and files a directors' circular on SEDAR, and sends the directors' circular to every person or company to whom the Partial Bid was required to be sent, on the earlier of (i) the 3rd day following the date on which a decision in respect of the Motion is released by the Court if the Partial Bid is not stayed, and (ii) February 27, 2012 if a decision in respect of the Motion has not yet been delivered and the Partial Bid is not otherwise stayed; or
(b) in the event that the Partial Bid is temporarily stayed on or before February 27, 2012, files on SEDAR and prepares and sends a directors' circular to shareholders within 10 days following the termination of any temporary stay of the Partial Bid if 206 Ontario continues to pursue the Partial Bid following the expiry or lifting of such temporary stay; and
(c) incorporates by reference in any such directors' circular any press releases of the Filer issued between the date of this decision and the date of the directors' circular.
Dated at Toronto, this 14th day of February, 2012.