BCSC

Exemption Orders (Discretionary)

FOCUS AUTOMATION SYSTEMS INC.

2001 BCSECCOM 225

IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF FOCUS AUTOMATION SYSTEMS INC.

Exemption Order Under Sections 48 and 76

[para 1]
WHEREAS Focus Automation Systems Inc. has applied to the Executive Director for an order under sections 48 and 76 of the Securities Act, R.S.B.C. 1996, c. 418 that intended trades in options (the "Options") of Focus to JTB Vision Quest Corp. (the "Consultant") are exempt from the requirements of sections 34(1)(a) and 61 of the Act;

[para 2]
AND WHEREAS Focus has represented to the Executive Director that:

1. Focus was incorporated under the laws of Ontario, is not a reporting issuer under the Act and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 194/97;

2. the authorized capital of Focus consists of:

(a) an unlimited number of common shares ("Common Shares") of which 820,064 Common Shares were issued and outstanding as of January 18, 2001;

(b) an unlimited number of Class A Preference shares ("Class A Shares") of which 6,160,000 Class A Shares were issued and outstanding as of January 18, 2001;

(c) an unlimited number of Class B Preference shares ("Class B Shares") of which 3,169,120 Class B Shares were issued and outstanding as of January 18, 2001;

(d) 1,866,667 Class D Preference shares ("Class D Shares") of which 1,866,667 Class D Shares were issued and outstanding as of January 18, 2001;

(e) an unlimited number of Class E Convertible Common shares ("Class E Shares") of which 1,720,873 Class E Shares were issued and outstanding as of January 18, 2001; and

(f) an unlimited number of Class Z Special Shares none of which were issued and outstanding as of January 18, 2001;

3. none of Focus' shares are listed and posted for trading on any stock exchange;

4. Focus has entered into a consulting agreement dated June 15, 2000, as amended, (the "Consulting Agreement") with the Consultant pursuant to which the Consultant has agreed to act as its financial advisor and to provide financial and strategic advice to Focus (the "Services"), including advice in connection with one or more possible strategic initiatives involving:

(a) a sale or disposition of all or any portion of Focus' shares, business or assets to a third party;

(b) an amalgamation, arrangement or other business transaction involving Focus and a third party to affect such sale or disposition;

(c) an investment by a third party in Focus; or

(d) a joint venture, partnership or other relationship with a third party;

5. as part of the consideration package payable by Focus to the Consultant pursuant to the Consulting Agreement, Focus has agreed to issue the Options to the Consultant entitling the Consultant to purchase Class A Shares equal to up to 4% of the total equity of Focus on a fully diluted basis;

6. the Options are transferable only in accordance with applicable securities laws and are exercisable for a period of not more than seven years from vesting;

7. the Consultant will not be induced to receive or acquire Class A Shares or exercise the Options by expectation of engagement or continued engagement by Focus as a consultant;

8. Focus is not able to rely on the exemptions from the registration and prospectus requirements of the Act;

[para 3]
AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;

[para 4]
IT IS ORDERED:

1. under sections 48 and 76 of the Act, that the intended trades by Focus in Options to the Consultant is exempt from the requirements of sections 34(1) and 61 of the Act, provided that:

(a) Focus provides the Consultant with a copy of this order; and

(b) Focus files a Form 20 on or before the 10th day after the distribution of Options to the Consultant;

2. under section 76 of the Act that any trade in the Options or Class A Shares acquired on exercise of the Options is deemed to be a distribution unless:

(a) Focus is a reporting issuer under the Act and has been a reporting issuer for the 12 months immediately preceding the trade;

(b) if the seller is an insider of Focus, other than a director or senior officer of Focus, the seller has filed all records required to be filed under sections 87 and 90 of the Act;

(c) if the seller is a director or senior officer of Focus, the seller has filed all records required to be filed under sections 87 and 90 of the Act and Focus has filed all records required to be filed under Part 12 of the Act and the Rules;

(d) the trade is not a distribution from the holdings of a control person;

(e) no unusual effort is made to prepare the market or create a demand for the security; and

(f) no extraordinary commission or other consideration is paid in respect of the trade.

[para 5]
DATED February 21, 2001.

Derek E. Patterson
Manager