Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – National Policy 46-201 Escrow for Initial Public Offerings – Amendment to escrow agreement – Issuer completed an initial public offering of common shares – Issuer requests that certain securityholders be treated as a single entity for the purposes of the release of securities from escrow under an escrow agreement – Securities regulators must approve any amendment made to an escrow agreement – Two securityholders are treated as a single entity for the purposes of the escrow release and have the discretion to release additional securities from one of the securityholders, provided that such additional release would at no time exceed the number of securities which may be released by the two securityholders, in the aggregate.
Applicable Legislative Provisions
National Policy 46-201 Escrow for Initial Public Offerings
Ontario Commission des P.O. Box 55, 19th Floor CP 55, 19e étage
Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
Phone: 416.593.8314 Web site: www.osc.gov.on.ca
Fax: 416.593.8122
June 5 , 2008
Fraser Milner Casgrain LLP
99 Bank Street
Suite 1420
Ottawa, Ontario
K1P 1H4
Attention: James A. Hollingworth
Dear Mr. Hollingworth
Re: DragonWave Inc. (the Applicant) – application for a decision under the securities legislation of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador (the Jurisdictions) to amend an existing escrow agreement
The Applicant has applied to the local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions for the consent of the Decision Makers to amend an existing escrow agreement between the Applicant, its transfer agent and certain securityholders of the Applicant dated April 13, 2007 (the Escrow Agreement).
As the Applicant has represented to the Decision Makers that:
(a) the Applicant is a reporting issuer in all provinces of Canada;
(b) the Applicant’s common shares are listed on the Toronto Stock Exchange under the symbol DWI;
(c) the Applicant completed an initial public offering of common shares on April 19, 2007;
(d) as of July 10, 2007, the Applicant had 24,639,264 common shares issued and outstanding;
(e) in connection with the initial public offering, certain securityholders of the Applicant entered into the Escrow Agreement pursuant to National Policy 46-201 Escrow for Initial Public Offerings;
(f) the Applicant is an “established issuer” for the purposes of Section 3.3 of National Policy 46-201;
(g) two of the securityholders who were required to deposit securities into escrow are Wesley Clover Corporation and Wesley Clover International Corporation;
(h) Wesley Clover Corporation deposited 899,505 common shares into escrow at the time of closing;
(i) Wesley Clover International Corporation deposited 818,207 common shares and 21,100 warrants into escrow at the time of closing;
(j) each of Wesley Clover Corporation and Wesley Clover International Corporation is controlled by Sir Terence Matthews;
(k) Wesley Clover Corporation and Wesley Clover International Corporation request to be treated as a single entity for the purposes of the release of securities from escrow under the Escrow Agreement and have the discretion to release additional securities from one of the companies, provided that such additional release would at no time exceed the number of securities which may be released by the two companies, in the aggregate; and
(l) the Applicant is aware of and consents to the relief sought in this application,
each of the Decision Makers is satisfied that the test contained in the securities legislation that provides the Decision Maker with the jurisdiction to make the decision has been met and consent to the amendment of the Escrow Agreement.
As stated in the Applicant’s correspondence of September 12, 2007, Wesley Clover Corporation and Wesley Clover International Corporation will be treated as a single entity for the purposes of the release of securities from escrow under the Escrow Agreement. Wesley Clover Corporation and Wesley Clover International Corporation will otherwise be subject to the terms of the Escrow Agreement for the release of escrow securities.
This consent letter does not constitute an exemption from the provisions of the securities legislation of the Jurisdictions and regulations thereunder which may require a securityholder to have complied with certain terms and conditions prior to or after any sale of its securities.
If you have any questions or require anything further in connection with this matter, please contact Frédéric Duguay, Legal Counsel, at (416) 593-3677 or fduguay@osc.gov.on.ca.
“Michael Brown”
Michael Brown
Assistant Manager, Corporate Finance Branch
Ontario Securities Commission