Exemption Orders (Discretionary)
CANADIAN CRUDE SEPARATORS INC.
2001 BCSECCOM 623
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF
CANADIAN CRUDE SEPARATORS INC.
Exemption Order Under Section 76
[para 1]
WHEREAS Canadian Crude Separators Inc. ("CCS") has applied to the Executive Director for an order under section 76 of the Securities Act, R.S.B.C. 1996, c. 418 that certain intended trades in securities of CCS are exempt from the requirements of section 61 of the Act;
[para 2]
AND WHEREAS CCS has represented to the Executive Director that:
1. CCS was incorporated under the laws of Alberta and is not a reporting issuer under the Act, but has been a reporting issuer or the equivalent in each of Alberta, Saskatchewan, Manitoba, Ontario and Québec for more than 12 months;
2. CCS has filed all the information that it is required to file as a reporting issuer or the equivalent in each of Alberta, Saskatchewan, Manitoba, Ontario and Québec, and is not in default of the securities legislation of any of those jurisdictions;
3. the authorized capital of CCS presently consists of an unlimited number of common shares ("Common Shares") and up to 764,000 Series "A" preferred shares of which 13,032,841 Common Shares and 300,000 Series “A” preferred shares were issued and outstanding as at March 31, 2001;
4. the directors of CCS intend to amend its articles to authorize the issuance of an unlimited number of Series "B" preferred shares (the "Series B Shares") which will be convertible into Common Shares and will also be redeemable for Common Shares;
5. the Common Shares are listed on The Toronto Stock Exchange (the "TSE") and the Series B Shares have been conditionally approved for listing on the TSE;
6. CCS has commenced a securities exchange take over bid (the "Bid") to purchase all of the outstanding common shares ("Newalta Shares") and warrants ("Newalta Warrants") of Newalta Corporation ("Newalta") on the basis of 0.52 of a Series B Share for each Newalta Share and 0.52 of a CCS Series B Share purchase warrant ("CCS Warrant") for each Newalta Warrant; each CCS Warrant will entitle the holder to purchase a Series B Share at a price of $9.1346 per Series B Share until October 4, 2001;
7. CCS has filed a securities exchange take over bid circular under the Act and mailed it to all registered security holders of Newalta in connection with the Bid;
8. CCS will become a reporting issuer under the Act upon taking up and paying for Newalta Shares or Newalta Warrants under the Bid;
9. residents of British Columbia ("B.C. Security Holders") will acquire Series B Shares and/or CCS Warrants under the Bid in reliance on the exemptions from the registration and prospectus requirements contained in sections 45(2)(28) and 74(2)(26) of the Act;
10. the B.C. Security Holders may acquire Series B Shares upon the exercise of CCS Warrants and Common Shares upon the conversion or redemption of the Series B Shares (together, the “Underlying Shares”) in reliance on the exemptions from the registration and prospectus requirements contained in sections 45(2)(12)(iii) and 74(2)(11)(iii) of the Act;
11. any trade of Underlying Shares is deemed to be a distribution under section 142(3) of the Securities Rules, B.C. Reg. 194/97unless, among other things, CCS has been a reporting issuer for the 12 months immediately preceding the trade; and
12. residents of other Canadian jurisdictions who acquire Underlying Shares will be able to trade such securities immediately;
[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 under section 76 of the Act that any trade by a B.C. Security Holder of Underlying Shares is exempt from the requirements of section 61 of the Act provided that:
(a) CCS is a reporting issuer at the time of the trade of any such securities;
(b) if the seller is an insider of CCS, other than a director or senior officer of CCS, 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 CCS, the seller has filed all records required to be filed under sections 87 and 90 of the Act and CCS 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 security; and
(f) no extraordinary commission or other consideration is paid in respect of the trade.
[para 5]
DATED June 11, 2001.
Brenda Leong
Director