BCSC

Exemption Orders (Discretionary)

PACIFIC E-LINK CORPORATION

2001 BCSECCOM 230

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

AND

IN THE MATTER OF PACIFIC E-LINK CORPORATION

Exemption Order Under Sections 48 and 76

[para 1]
WHEREAS Pacific E-Link Corporation (“E-Link”) has applied to the Executive Director under sections 48 and 76 of the SecuritiesAct, R.S.B.C. 1996, c. 418 for an order that the intended trade by E-Link of 2,200,000 of its common shares to Shanghai Yinyang Industry Co., Ltd. (the “Vendor”) is exempt from the requirements of section 34 and 61 of the Act;

[para 2]
AND WHEREAS E-Link has represented to the Executive Director that:

1. E-Link was incorporated under the laws of British Columbia, is an exchange issuer under the Act and is not in default of any requirements of the Act or the Securities Rules, R.B.C. Reg. 194/97 as amended by B.C. Reg 18/98, 340/98, 3/2000 and 84/2000;

2. as of February 7, 2001, the authorized capital of E-Link consisted of 100,000,000 common shares without par value, 10,000,000 Class B non-voting common shares without par value and 100,000,000 preferred shares without par value, of which 22,112,155 common shares were issued and outstanding;

3. the common shares of E-Link are listed and posted for trading on the Canadian Venture Exchange Inc. (“CDNX”);

4. Shanghai Pacific Communications Co., Ltd. (“Shanghai Pacific”) is 94% owned by E-Link, is incorporated under the law of the Peoples’ Republic of China as a co-operative joint venture (“CJV”) and is not a reporting issuer under the Act; pursuant to Chinese laws, a CJV must consist of at least one foreign investor, such as E-Link, and one local Chinese investor; consequently, E-Link’s ownership of Shanghai Pacific is limited to 94%;

5. the Vendor carries on business in the Peoples’ Republic of China and is not a reporting issuer under the Act; the Vendor holds common stock in Shanghai Yinzheng Real Estate Co. (“Yinzheng”) which holds common stock in Inlook Media Goup (“Inlook”); Inlook is a media production and distribution company that owns the publishing rights to magazine and television shows in the Peoples’ Republic of China;

6. pursuant to an agreement on stock equity transfer, a payment agreement on stock equity transfer, the appendix thereto and an amendment to the appendix (collectively, the “Agreements”), the Vendor has agreed to sell to Shanghai Pacific a 31.5% interest in Yinzheng (the “Assets”) in consideration of, among other things, 2,200,000 common shares of E-Link;

7. the fair market value of the Assets is at least USD$500,000;

8. the Agreements have been accepted for filing by the CDNX;

9. on completion of the acquisition of the Assets, E-Link will indirectly own the Assets through its ownership of 94% of the issued and outstanding common shares of Shanghai Pacific; and

10. but for the fact that Shanghai Pacific rather than E-Link will be acquiring the Assets, the distribution of the common shares of E-Link to the Vendor would be exempt from the requirements of section 34(1)(a) and 61 of the Act under the registration and prospectus exemptions contained in section 45(2)(6) and 74(2)(5) 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 trade by E-Link of up to 2,200,000 common shares of E-Link to the Vendor is exempt from the requirements of sections 34(1)(a) and 61 of the Act, provided that E-Link files a Form 20 on or before the tenth day after the distribution of the shares to the Vendor; and

2. under section 76 of the Act, that any trade in common shares of E-Link acquired by the Vendor under this order is deemed to be a distribution unless:

(a) 12 months or, if E-Link complies with the provisions of Local Policy Statement 3-27 and BCI 45-506 in connection with the distribution of common shares to the Vendor, four months, have elapsed from the earlier of the date of issue of the common shares to the Vendor and the date a written agreement committing the Vendor to acquire the common shares, subject only to any required regulatory approval, has been executed by all parties to the agreement;

(b) if the seller is an insider of E-Link, other then a director or senior officer of E-Link, 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 E-Link, the seller has filed all records required to be filed under section 87 and 90 of the Act and E-Link 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 shares; and

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

[para 5]
DATED February 22, 2001.

Brenda Leong
Director