Exemption Orders (Discretionary)

WESTERN FACILITIES FUND


2001 BCSECCOM 408




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

AND

IN THE MATTER OF WESTERN FACILITIES FUND

AND

IN THE MATTER OF NEVIS LTD.

Exemption Order Under Sections 48 and 76

[para 1]
WHEREAS Western Facilities Fund (“WFF”) 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 the intended trades by WFF in debentures (the “Nevis Debentures”) of Nevis Ltd. (“Nevis”) to holders (“WFF Unitholders”) of trust units of WFF (“WFF Trust Units”) are exempt from the requirements of sections 34(1)(a) and 61 of the Act;

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

1. WFF is an unincorporated, limited-purpose trust established under the laws of the Province of Alberta pursuant to a trust indenture, is 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. an unlimited number of WFF Trust Units may be authorized and issued pursuant to the trust indenture governing WFF and, as of March 1, 2001, there were 27,376,824 WFF Trust Units issued and outstanding;

3. the WFF Trust Units are listed for trading on The Toronto Stock Exchange;

4. Nevis is a wholly-owned subsidiary of WFF, was incorporated under the laws of the Province of Alberta and is not a reporting issuer under the Act;

5. further to an arrangement agreement made as of February 16, 2001 among Danoil Energy Ltd. (“Danoil”), Nevis and WFF, the respective businesses of Danoil, WFF and Nevis are to be combined pursuant a merger (the “Merger”) and pursuant to an arrangement (the “Arrangement”) under the Business Corporations Act (Alberta);

6. Danoil was incorporated under the laws of the Province of Alberta, is a reporting issuer under the Act and has been a reporting issuer under the Act for more than 12 months, and has its common shares listed for trading on The Toronto Stock Exchange and the Canadian Venture Exchange;

7. one of the components of the Merger is that WFF purchase a certain principal amount of Nevis Debentures from Nevis and then distribute the Nevis Debentures pro rata to the holders of WFF Trust Units outstanding immediately prior to the Arrangement becoming effective;

8. as a part of the Merger transaction, the WFF Trust Units will be consolidated on a one-for-14 basis prior to the distribution of the Nevis Debentures to the WFF Unitholders and the Arrangement;

9. the final step in the Merger and the Arrangement is that Nevis and Danoil will be amalgamated and continue as one corporation called “Acclaim Energy Inc.” (“Amalco”) which will be a wholly-owned subsidiary of WFF, and the Nevis Debentures will thereby be obligations of Amalco;

10. pursuant to the definition of “reporting issuer” in section 1(1) of the Act, following the Merger, Amalco will be deemed to be a reporting issuer under the Act for so long as Danoil has been a reporting issuer under the Act;

11. in connection with the Merger and the Arrangement and the special meetings of the WFF Unitholders and the shareholders of Danoil being held in connection therewith, a joint management information circular dated March 16, 2001 in the required form and containing, among other things, prospectus-level disclosure relating to the Merger and the Arrangement, the business and affairs of each of WFF, Nevis and Danoil and pro forma financial statements of WFF giving effect to the Merger and the Arrangement has been sent to the WFF Unitholders and the shareholders of Danoil; and

12. the registration and prospectus exemptions contained in sections 45(2)(9) and 74(2)(8) of the Act are not available for the trades in the Nevis Debentures to the WFF Unitholders as the Nevis Debentures are not securities of WFF;

[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 WFF of the Nevis Debentures to WFF Unitholders in connection with the Merger and the Arrangement are exempt from the requirements of sections 34(1)(a) and 61 of the Act; and

2. under section 76 of the Act that any intended trade in Nevis Debentures acquired by a seller under this order is deemed to be a distribution unless:

(a) Amalco is a reporting issuer and has been a reporting issuer for the 12 months immediately preceding the trade,

(b) if the seller is an insider of Amalco, other than a director or senior officer of Amalco, 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 Amalco, the seller has filed all records required to be filed under sections 87 and 90 of the Act and Amalco has filed all records required to be filed under Part 12 of the Act and of 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 Nevis Debentures, and

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

[para 5]
DATED April 17, 2001.




Derek E. Patterson
Manager
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