SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
IMAGICTV INC.
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(Name of Issuer)
COMMON SHARES
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(Title of Class of Securities)
45247E 10 7
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(CUSIP Number)
STEPHEN H. DIAMOND
C/O SONCASTLE HOLDINGS LTD.
22 ST. CLAIR AVE EAST,
SUITE 1010, TORONTO, ON M4T 2S3 CANADA
(416) 961-5355
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
COPY TO:
RODNEY L. MOORE
VINSON & ELKINS L.L.P.
2001 ROSS AVENUE, SUITE 3800
DALLAS, TEXAS 75201
(214) 220-7781
March 24, 2003
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box: [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1
(Continued on the following page(s))
CUSIP No. 45247E 10 7
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Soncastle Holdings Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 616,232 Common Shares(1)
EACH -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
616,232 Common Shares(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,464,927 Common Shares(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
10.0%(2)
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14 TYPE OF REPORTING PERSON
IV; CO
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(1) Soncastle Holdings Ltd. owns directly 616,232 Common Shares and may be
deemed to be the beneficial owner of an additional 1,848,695 Common Shares
owned by the other Distributees (as defined in Item 4. of this Schedule
13D).
(2) Based on 24,731,607 Common Shares of the Issuer outstanding as represented
by the Issuer in the Arrangement Agreement (as defined in Item 4. of this
Schedule 13D).
Page 2
CUSIP No. 45247E 10 7
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Stephen H. Diamond
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canadian
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7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 616,232 Common Shares(1)
EACH -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
616,232 Common Shares(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,464,927 Common Shares(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
10.0%(2)
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14 TYPE OF REPORTING PERSON
IN
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(1) Mr. Diamond owns 100% of the outstanding voting securities of Soncastle
Holdings Ltd. and, as a result, may be deemed to (i) have shared voting
and dispositive power with respect to the Common Shares owned directly by
Soncastle Holdings Ltd. and (ii) be the indirect beneficial owner of the
Common Shares beneficially owned by Soncastle Holdings Ltd.
(2) Based on 24,731,607 Common Shares of the Issuer outstanding as represented
by the Issuer in the Arrangement Agreement (as defined in Item 4. of this
Schedule 13D).
Page 3
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to common shares, without par value
(the "Common Shares"), of ImagicTV Inc., a corporation organized under the laws
of Canada (the "Issuer"). The address of the principal executive offices of the
Issuer is One Brunswick Square, 14th Floor, P.O. Box 303, St. John, New
Brunswick, Canada, E2L 3Y2.
ITEM 2. IDENTITY AND BACKGROUND
This statement on Schedule 13D is being filed by Soncastle Holdings Ltd.,
a corporation existing under the laws of Ontario, Canada ("SHL"), and Stephen H.
Diamond ("Mr. Diamond" and, together with SHL, the "Reporting Persons"). SHL is
an investment holding company whose principal business is acquiring, holding and
voting securities of public and private companies. The principal business
address and the principal office address of SHL is 22 St. Clair Ave East, Suite
1010 Toronto, ON M4T 2S3 Canada. Mr. Diamond owns 100% of the outstanding voting
securities of SHL.
(a), (b), (c) and (f). Mr. Diamond is an attorney. The present
principal occupation of Mr. Diamond is practicing law in his capacity as a
partner for McCarthy Tetrault LLP, a law firm.
Mr. Diamond is the sole executive officer and sole director of SHL.
The business address of each of Mr. Diamond and the office of McCarthy
Tetrault LLP in which Mr. Diamond practices is Toronto Dominion Bank Tower,
Toronto Dominion Centre, Toronto, ON M5K 1E6. Mr. Diamond is a citizen of
Canada.
(d) and (e). Neither of the Reporting Persons, during the past five years,
has been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As of the date hereof, SHL owns, beneficially and directly, 616,232 Common
Shares (the "RP Shares"). The RP Shares were distributed to SHL effective March
24, 2003, by Whitecastle Investments Limited, a corporation existing under the
laws of Canada ("Whitecastle"), as described in Item 4. SHL utilized US$696,342
of working capital as consideration paid to Whitecastle for the RP Shares. By
reason of the Distributee Agreements (defined in Item 4.), SHL also may be
deemed to be a beneficial owner of the 1,848,695 Common Shares distributed by
Whitecastle to the other Distributees (defined in Item 4.) as described in Item
4. (the 616,232 RP Shares distributed to SHL and the 1,848,695 Common Shares
distributed to the other Distributees herein collectively are referred to as the
"Whitecastle Shares"). By reason of his ownership of 100% of the outstanding
voting securities of SHL, Mr. Diamond may be deemed to indirectly beneficially
own the Common Shares beneficially owned by SHL.
ITEM 4. PURPOSE OF TRANSACTION
(a), (b), (d), (f), (g), (h), (i) and (j). Pursuant to an Arrangement
Agreement dated as of February 6, 2003, entered into between Alcatel, a
corporation organized under the laws of France ("Alcatel"), and the Issuer (the
"Arrangement Agreement"), Alcatel has agreed to acquire all of the outstanding
Common Shares of the Issuer in a stock-for-stock transaction (the
"Arrangement"). In consideration of Alcatel entering into the Arrangement
Agreement, on February 6, 2003, Whitecastle entered into a letter
Page 4
agreement (the "Shareholder Agreement") with Alcatel wherein, among other
things, Whitecastle has agreed (i) except under limited circumstances permitted
under the Shareholder Agreement, not to (A) sell or otherwise dispose of any of
the Whitecastle Shares or any rights therein or enter into any agreement with
respect to any such sale or other disposition or (B) grant any proxies in
respect of the Whitecastle Shares; (ii) if Alcatel seeks to acquire all of the
Common Shares by means other than the Arrangement, including by way of a
take-over bid, on terms not less favorable to Whitecastle from a financial point
of view then the Arrangement, to (A) deposit the Whitecastle Shares in any such
take-over bid and not withdraw them unless a competing proposal with a price in
excess of U.S.$1.38 per Common Share is made, (B) not support or enter into an
agreement with respect to an alternative transaction proposed by a third party
and (C) vote the Whitecastle Shares in favor of, and not dissent from, such
transaction; (iii) to vote the Whitecastle Shares in favor of the Arrangement
and against any other transaction not involving Alcatel or any action that could
reasonably be expected to interfere with or delay the Arrangement; and (iv)
without the prior consent of Alcatel, not to propose any matter for action at
any shareholder meeting of the Issuer. The Arrangement Agreement also provides
that Gerald L. Pond, Chairman of the Board and Chief Executive Officer of the
Issuer, and Ian Cavanaugh, a senior vice president of the Issuer, will resign
their positions with the Issuer not later than the effective date of the
Arrangement. In the Schedule 13D filed by Alcatel and Alcatel Canada, Inc.
("Alcatel Canada"), with the Securities and Exchange Commission on February 18,
2003 (the "Alcatel Schedule 13D"), Alcatel has reported that, upon consummation
of the Arrangement, Alcatel will replace all of the present members of the Board
of Directors of the Issuer and some of the members of the management of the
Issuer and will cause the Issuer to delist all of the issued and outstanding
Common Shares of the Issuer from The Nasdaq SmallCap Market on which the Common
Shares currently are listed.
The Shareholder Agreement terminates under certain circumstances,
including on the business day following the day when the Issuer's board of
directors approves, recommends, accepts or enters into an agreement, arrangement
or understanding with respect to a Superior Proposal (as defined in the
Arrangement Agreement attached as Exhibit 1 hereto) that provides for a per
Common Share value in excess of U.S.$1.38 (an "Acceptable Offer"). In such case,
under certain circumstances as described in Section 5.1 of the Shareholder
Agreement, Whitecastle is to pay Alcatel the excess, if any, of the per Common
Share value received by Whitecastle under the Acceptable Offer over U.S.$1.20.
The Arrangement is subject to approval by at least 66 2/3% of the votes
cast by holders of Common Shares and holders of the Issuer's outstanding options
("Imagic Options") to purchase Common Shares (collectively, the "Voting Class"),
voting together as a single class, who are present in person or by proxy at the
special meeting of the Issuer's securityholders to be held to consider the
Arrangement (the "Arrangement Meeting"). Each outstanding Common Share will
entitle the holder thereof to one vote on the Arrangement and each Imagic Option
will entitle the holder thereof to one vote for each Common Share that may be
acquired upon exercise of the Imagic Option, without regard to vesting. The
Arrangement also is subject to approval by at least a majority of the votes cast
by the holders of Common Shares, other than Alcatel and its affiliates, at the
Arrangement Meeting (the "Minority Class").
The Whitecastle Shares represent 9.0% of the Voting Class and the RP
Shares represent 2.2% of the Voting Class. Certain other holders of Common
Shares and Imagic Options also have entered into a letter agreement (each, a
"Letter Agreement") with Alcatel substantially identical to the Shareholder
Agreement (all such securityholders who have entered into such letter agreements
with Alcatel, excluding Whitecastle, are herein referred to collectively, as the
"Principal Shareholders"), with corresponding restrictions and agreements with
respect to Common Shares and Imagic Options held by the Principal Shareholders.
Based on representations of the Principal Shareholders in their respective
Letter Agreements, representations of the Issuer in the Arrangement Agreement
and stock records of the Issuer,
Page 5
(i) the Principal Shareholders beneficially own 9,762,450 Common
Shares, excluding Common Shares issuable upon exercise of Imagic Options,
(ii) the Principal Shareholders hold Imagic Options to purchase
763,861 Common Shares, 318,464 of which currently are exercisable; and
(iii) the Common Shares and Imagic Options held by the Principal
Shareholders as reported above, collectively, represent at least 38.3% of
the Voting Class.
The percentage of the Minority Class represented by the 2,464,927
Whitecastle Shares (and the 616,232 RP Shares) and the Common Shares owned by
the Principal Shareholders as of the record date for the Arrangement Meeting
will depend on the number of Imagic Options (1,490,009 of which currently are
exercisable, as represented by the Issuer in the Arrangement Agreement)
exercised before the record date for the Arrangement Meeting. Assuming no Imagic
Options are exercised, such Common Shares will represent 49.4% of the Minority
Class.
According to the Alcatel Schedule 13D, Alcatel, as the parent holding
company of Alcatel Canada, also indirectly beneficially owns 3,986,857 Common
Shares, which shares are owned directly by Alcatel Canada and with respect to
which Alcatel and Alcatel Canada share voting power. The Common Shares owned
directly by Alcatel Canada represent 16.1% of the outstanding Common Shares and
at least 14.5% of the Voting Class. Pursuant to the terms of the Arrangement
Agreement, Alcatel has agreed to vote its Common Shares in favor of the
Arrangement.
Effective March 24, 2003, Whitecastle distributed all of the Whitecastle
Shares to the four related companies listed below, each of which owns 25% of the
common stock of Whitecastle (each a "Distributee"), in amounts as set forth
below:
Common Shares
Distributed
1. Soncastle Holdings Ltd. - 616, 232
2. CJD Investments Inc. - 616,232
3. Maplecastle Holdings Ltd. - 616,231
4. Jeskolari Holdings Inc. - 616,232
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Total: 2,464,927
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Alcatel consented to such distribution, and, as a condition to each
distribution each Distributee executed and delivered to Alcatel a written
agreement (each, a "Distributee Agreement") agreeing to be bound by the terms of
the Shareholder Agreement. A copy of the Form of Distributee Agreement is filed
herewith as Exhibit 4.
The descriptions of the Arrangement Agreement, Shareholder Agreement and
Distributee Agreements in this Item 4. are qualified in their entirety by
references to the full text of such agreements, which are incorporated herein by
reference and attached hereto as Exhibits 1, 2 and 4, respectively. The
percentage calculations set forth above in this Item 4. are calculated based on
24,731,607 Common Shares outstanding and not more than 2,729,172 Imagic Options
outstanding, as represented by the Issuer in the Arrangement Agreement.
Page 6
(c), (e) and (j). Although none of the Reporting Persons (nor, to the
knowledge of the Reporting Persons, any other person identified in Item 2.
above) has any plans or proposals which relate to or would result in (i) a sale
or transfer of a material amount of assets of the Issuer or any of its
subsidiaries, (ii) any material change in the present capitalization or
dividend policy of the Issuer or (iii) any action similar to any of the
foregoing, the consummation of the Arrangement may result in one or more of such
occurrences.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) and (b). As of the date hereof, as a result of the distribution by
Whitecastle of the Whitecastle Shares as described in Item 4., SHL is the direct
beneficial owner of 616,232 Common Shares, representing 2.5% of outstanding
Common Shares (calculated based on 24,731,607 Common Shares outstanding, as
represented by the Issuer in the Arrangement Agreement). By reason of his
ownership of 100% of the outstanding voting securities of SHL, Mr. Diamond may
be deemed to have shared power to vote, or direct the vote of, and to dispose,
or direct the disposition, of the 616,232 Common Shares owned directly by SHL.
By reason of the Distributee Agreements, SHL also may be deemed to be a
beneficial owner of the 1,848,695 Common Shares distributed by Whitecastle to
the other Distributees. By reason of his ownership of 100% of the outstanding
voting securities of SHL, Mr. Diamond may be deemed to indirectly beneficially
own the Common Shares beneficially owned by SHL.
Other than beneficial ownership of Common Shares that may exist as a
result of the relationships described herein, Mr. Diamond, the sole executive
officer and sole director of SHL, does not beneficially own any Common Shares.
Pursuant to the regulations promulgated under Section 13(d) of the
Exchange Act of 1934 (the "Exchange Act"), each Reporting Person expressly
disclaims beneficial ownership of any Common Shares beneficially owned by
Alcatel or any of the Principal Shareholders and the filing of this Schedule 13D
shall not be construed as an admission, for the purposes of Sections 13(d) and
13(g) or under any provision of the Exchange Act or the rules promulgated
thereunder or for any other purpose, that either Reporting Person is the
beneficial owner of any such Common Shares.
(c) Except as described in Item 4., the text of which is incorporated
herein by reference, during the last 60 days there were no transactions in the
Common Shares effected by the Reporting Persons.
(d) Except as provided in the Shareholder Agreement and the Distributee
Agreements, no other person is known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of the RP
Shares or the other Whitecastle Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
See the response to Item 4. of this report, which is incorporated herein
by reference. Except for the Shareholder Agreement and the Distributee
Agreements, there are no contracts, arrangements, understandings or
relationships among the persons named in Item 2. or between such persons and any
person with respect to any securities of the Issuer.
Page 7
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Form of Arrangement Agreement between Alcatel and ImagicTV
Inc. (hereby incorporated by reference to Exhibit C to the
Schedule 13D filed with the Securities and Exchange
Commission by Alcatel on February 18, 2003).
Exhibit 2: Shareholder Agreement among Alcatel and Whitecastle
Investments Limited dated February 6, 2003 (incorporated by
reference to Exhibit 2 of the Schedule 13D filed with the
Securities and Exchange Commission by Whitecastle Investments
Limited and A. Ephraim Diamond on March 21, 2003).
Exhibit 3: Joint Filing Agreement, dated April 1, 2003, among
Soncastle Holdings Ltd. and Stephen H. Diamond.
Exhibit 4: Form of Distributee Agreement executed by Soncastle
Holdings Ltd. agreeing to be bound by the terms of the
Shareholder Agreement.
Page 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
SONCASTLE HOLDINGS LTD.
Date: April 1, 2003 By: /s/ Stephen H. Diamond
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Name: Stephen H. Diamond
Title: President
Date: April 1, 2003 /s/ Stephen H. Diamond
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Stephen H. Diamond
EXHIBIT INDEX
Exhibit 1: Form of Arrangement Agreement between Alcatel and ImagicTV
Inc. (hereby incorporated by reference to Exhibit C to the
Schedule 13D filed with the Securities and Exchange
Commission by Alcatel on February 18, 2003).
Exhibit 2: Shareholder Agreement among Alcatel and Whitecastle
Investments Limited dated February 6, 2003 (incorporated by
reference to Exhibit 2 of the Schedule 13D filed with the
Securities and Exchange Commission by Whitecastle Investments
Limited and A. Ephraim Diamond on March 21, 2003).
Exhibit 3: Joint Filing Agreement, dated April 1, 2003, among
Soncastle Holdings Ltd. and Stephen H. Diamond.
Exhibit 4: Form of Distributee Agreement executed by Soncastle
Holdings Ltd. agreeing to be bound by the terms of the
Shareholder Agreement.