Catapult Energy Small Cap 2007 FTS Limited and Aston Hill Financial Inc. - MRRS Decision

Headnote

Relief from the requirements in National Instrument 81-106 to prepare and file an annual information form; to maintain a proxy voting record; and to prepare a proxy voting record on an annual basis for the period ending June 30 of each year, to post the proxy voting record on the Partnership filers' websites no later than August 31 of each year and to send the proxy voting record to the limited partners of the partnership files upon request.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure ss. 9.2, 10.3 and10.4

Citation: Catapult Energy Small Cap 2007 FTS Limited and Aston Hill Financial Inc., 2008 ABASC 185

April 10, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NEW BRUNSWICK,

NOVA SCOTIA, AND NEWFOUNDLAND

AND LABRADOR

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

CATAPULT ENERGY SMALL CAP 2007

FTS LIMITED PARTNERSHIP

(the Partnership)

AND

ASTON HILL FINANCIAL INC. (AHFI)

(the Filers)

MRRS DECISION DOCUMENT

Background

1. The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Partnership and from AHFI, on behalf of any future limited partnerships administered by AHFI that are identical to the Partnership in all respects material to this decision (the Future Partnerships, and together with the Partnership, the Partnership Filers) for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filers from:

(a) the requirement in Section 9.2 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) to prepare and file an annual information form(AIF);

(b) the requirement in section 10.3 of NI 81-106 to maintain a proxy voting record (the Proxy Voting Record); and

(c) the requirements in section 10.4 of NI 81-106 to prepare a Proxy Voting Record on an annual basis for the period ending June 30 of each year, to post the Proxy Voting Record on the Partnership Filers' websites no later than August 31 of each year and to send the Proxy Voting Record to the limited partners of the Partnership Filers (the Limited Partners) upon request.

(collectively, the Requested Relief).

2. Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Alberta Securities Commission is the principal regulator for this application; and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

3. Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

4. This decision is based on the following facts represented by the Filers:

(a) The Catapult Energy Small Cap 2007 Limited Partnership (the Partnership) was formed by a preliminary limited partnership agreement made as of January 23, 2007 between Catapult Energy Management 2007 Inc. as general partner (the 2007 General Partner) and Catapult Energy FN Inc. (Catapult FN) as the initial limited partner, and was established as a limited partnership pursuant to the provisions of the Partnership Act (Alberta). The definitive form of partnership agreement governing the Partnership is the amended and restated limited partnership agreement dated as of April 27, 2007 (the 2007 Partnership Agreement). Catapult FN's initial limited partnership interest was redeemed by the Partnership on May 15, 2007. The Partnership is a reporting issuer in each of the Jurisdictions. Any Future Partnership will also be a reporting issuer in each Jurisdiction.

(b) AHFI is the administrator of the Partnership and will be the administrator of any Future Partnership (the Administrator). The Administrator provides or will cause to be provided certain administrative services required by the Partnership Filers. Catapult Financial Management Inc. is the investment advisor of the Partnership and will be the investment advisor of any Future Partnership (the Investment Advisor).

(c) The Partnership was formed, and any Future Partnership will be formed, with the investment objectives of (a) achieving capital appreciation through investment in a diversified portfolio of equity securities of selected small cap resource issuers identified by the Investment Advisor, and (b) maximizing tax benefits for investors by purchasing flow-through shares (Flow-Through Shares) of resource issuers.

(d) The Partnership filed a final prospectus dated April 27, 2007 (the 2007 Final Prospectus) relating to the initial public offering of its units (the LP2007 Units) with the securities regulators in each of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador (collectively, the Jurisdictions), and was issued a final mutual reliance review system (MRRS) decision document dated May 2, 2007 by the Alberta Securities Commission (the ASC), as the principal regulator under National Policy 43-201 -- Mutual Reliance Review System for Prospectuses (NP 43-201). The Partnership has completed the issue of LP2007 Units under its prospectus. No additional LP2007 Units have been or may be issued by the Partnership.

(e) The LP2007 Units and units of any Future Limited Partnership (collectively, the Units) have not been and will not be listed or quoted for trading on any stock exchange or market. The Units are not redeemable by the Limited Partners. Generally, Units are not transferred by Limited Partners, because Limited Partners must be holders of the Units on the last day of each fiscal year of the Partnership Filer in order to obtain the desired tax deduction. Limited Partners may be required to transfer their Units in limited situations where, for example, the Limited Partner is no longer a resident of Canada or upon the death of a Limited Partner.

(f) The 2007 Partnership Agreement provides the 2007 General Partner with the ability to propose to the limited partners of the Partnership (the LP2007 Limited Partners), at a special meeting to be held no later than October 31, 2008, an alternative (the Liquidity Alternative) to the termination of the Partnership. Such Liquidity Alternative may include, without limitation, a proposal that the Partnership exchange its assets for securities of a mutual fund corporation or other appropriate investment vehicle that, in either case deals at arm's length with each resource issuer of which the Partnership owns securities. Upon such exchange, the Partnership will be dissolved and the securities of the mutual fund corporation or other investment vehicle, as the case may be, will be distributed pro rata to the LP2007 Limited Partners upon such dissolution. In the event that the Liquidity Alternative is not proposed to the LP2007 Limited Partners on or before October 31, 2008, the 2007 Partnership Agreement provides that the Partnership will dissolve and its net assets will be distributed pro rata to the LP2007 Limited Partners on or before December 31, 2008. Any Future Partnership will be terminated approximately two years after it is formed on the same basis as the 2007 Partnership.

(g) Since its formation, the Partnership's activities have been limited to (i) completing the issue of the Units under the relevant Final Prospectus, (ii) investing its available funds in accordance with its investment objectives, and (iii) incurring expenses as described in the relevant Final Prospectus. Any Future Partnerships will be structured in a similar fashion.

(h) Unless a material change takes place in the business and affairs of the Partnership or Future Partnership (which such Partnership or Future Partnership would in any event be obligated to disclose pursuant to its continuous disclosure obligations), the Limited Partners of the Partnership or Future Partnership will obtain adequate financial information from the Partnership or Future Partnership's annual and interim financial statements and management report of fund performance thereon. The 2007 Final Prospectus, the financial statements and management reports of fund performance provide sufficient information for an LP2007 Limited Partner to understand the Partnership's business, financial position and future plans. Similarly, the final prospectus, the financial statements and management reports of fund performance of any Future Partnership will provide sufficient information for a limited partner of such Future Partnership to understand the Future Partnership's business, financial position and future plans. In addition, if a Liquidity Alternative is proposed, LP2007 Limited Partners will receive an information circular that describes the proposed alternative and will be given an opportunity to vote in respect of such proposed alternative at a special meeting. Similarly, if a liquidity alternative is proposed with respect to a Future Partnership, limited partners of such Future Partnership will be given an opportunity to vote in respect of such proposed alternative at a special meeting.

(i) In light of the limited range of business activities to be conducted by the Partnership Filers, the nature of the investment of the Limited Partners in the Partnership Filers and the fact that each Partnership Filer intends to dissolve within 2 years after its formation, the requirement to file an AIF may impose a material financial burden on the Partnership Filers without producing a corresponding benefit to the Limited Partners.

(j) As a result of the implementation of NI 81-106, investors purchasing Units were, or will be, provided with a prospectus containing written policies on how the Flow-Through Shares or other securities held by the Partnership Filers are voted (the Proxy Voting Policies), and had, or will have, the opportunity to review the Proxy Voting Policies before deciding whether to invest in Units.

(k) The Proxy Voting Policies of each Partnership Filer state that the Investment Advisor will exercise voting rights in respect of securities held by the Partnership Filer on a case-by-case basis, but in the best interests of the Limited Partners. When exercising voting rights, the Investment Advisor will generally vote with management of the issuer for routine matters, and for non-routine matters will vote with a focus on the potential impact of the vote on the Partnership Filer's value.

(l) The Proxy Voting Policies of each Partnership Filer give the Investment Advisor discretion not to vote on routine or non-routine matters where the Investment Advisor determines that it is not in the best interests of the Limited Partners of the Partnership Filer to cast a vote, or in cases where no value is added by voting, there is no requirement to vote.

(m) Given the short lifespan of each Partnership Filer, the production of a Proxy Voting Record would provide Limited Partners with very little opportunity for recourse if they disagreed with the manner in which a Partnership Filer exercised or failed to exercise its proxy voting rights, as the Partnership Filer would likely be dissolved by the time any potential change could materialize.

(n) Preparing and making available to Limited Partners a Proxy Voting Record will not be of any benefit to Limited Partners and may impose a material financial burden on the Partnership Filers.

(o) The Filers are of the view that the Requested Relief is not against the public interest, is in the best interests of the Partnership Filers and the Limited Partners and represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Partnership Filers and the Limited Partners.

Decision

5. Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met. The decision of the Decision Makers under the Legislation is that the Requested Relief is granted.