Mutual Reliance Review System for Exemptive Relief Applications - waiver grantedpursuant to section 4.5 of National Policy Statement No. 47 to enable issuer to participatein the POP System when it did not meet the "public float" test in the last calendar monthof the 1999 financial year in respect of which its Initial AIF is filed provided that it doesmeet the "public float" test at a date within 60 days before the filing of its preliminary shortform prospectus - waiver reflects the revised eligibility criteria set out in proposed NationalInstrument 44-101.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am.
In the Matter of the Prompt Offering Qualification System (1997), 20 OSCB 1217.
Proposed National Instrument 44-101 - Short Form Prospectus Distributions (1999) OSCBPOP Supp.2
National Policy Statement No. 47 -Prompt Offering Qualification System.
IN THE MATTER OF THE
MUTUAL RELANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
PASON SYSTEMS INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Ontario and Québec (the "Jurisdictions") hasreceived an application from Pason Systems Inc. (the "Filer") for a decision under thesecurities legislation and policies of the Jurisdictions (the "Legislation") that the provisionsof section 4.1(2)(b) of National Policy Statement No. 47 ("NPS 47") and the correspondingprovisions of the securities legislation of Québec (together, the "Market CapitalizationRequirement") be waived to permit the Filer to participate in the prompt offeringqualification system (the "POP System");
AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System") the Alberta Securities Commission is the principal regulatorfor this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. The Filer is a public company amalgamated under the Business Corporations Act(Alberta) on November 1, 1996. The amalgamation was part of an overalltransaction which occurred on October 31, 1996 whereby Mark 8 Ventures Inc.("Mark 8") pursuant to an acquisition agreement among Pason Systems Corp., allof its shareholders and Mark 8, acquired all of the outstanding shares of PasonSystems Corp. on the basis of 38,843 common shares of Mark 8 for each Class Acommon share of Pason Systems Corp. A total of 10,176,860 common shares ofMark 8 were issued to the shareholders of Pason Systems Corp. in connection withsuch acquisition. Following this acquisition, Mark 8 amalgamated with 693867Alberta Ltd. a wholly owned subsidiary of Mark 8 to form the Filer. Prior toNovember 1, 1996 the Filer (or Mark 8) had no significant assets and was inactive.The reverse takeover, which occurred on this date, represented a transition in thebusiness of Mark 8 from an Alberta junior capital company to an oilfield servicecompany specializing in drilling instrumentation systems.
2. The head office of the Filer is in the City of Calgary, in the Province of Alberta.
3. The Filer has been a reporting issuer in each of British Columbia, Alberta, Ontarioand Québec for more than 12 months and is not in default under any requirementsof the Legislation.
4. The Filer's financial year end is December 31st.
5. As of December 24, 1997, the Filer began trading on the Toronto Stock Exchange("TSE").
6. The authorized capital of the Filer consists of an unlimited number of commonshares and an unlimited number of preferred shares issuable in series. As of April14, 2000, the Filer had 16,519,378 common shares issued and outstanding with nopreferred shares of any series issued and outstanding.
7. For the purpose of calculating the aggregate market value of the common sharesof the Filer, the 5,316,620 shares indirectly owned by James D. Hill and held byJ.D. Hill Investments Ltd., a private Alberta corporation, wholly owned by Mr. Hilland his spouse, must be excluded. The only other person or corporation owingdirectly or indirectly or exercising control or direction over more than 10% of thevoting rights attached to the outstanding common shares of the Filer are those1,915,600 shares which as of April 14, 2000 were owned by R. Chaney andPartners LP of Houston, Texas. R. Chaney and Partners LP is not an affiliate of theFiler. The shares held by R. Chaney and Partners LP are also excluded.
8. The aggregate market value of the Filer's common shares as at December 31,1999, as defined and calculated in accordance with NPS 47 and the applicablesecurities legislation of Québec did not exceed $75,000,000.
9. As at June 29, 2000, the aggregate market value of the Filer's common shares, asdefined and calculated in accordance with NPS 47 and the applicable securitieslegislation of Québec, was $81,726,990.40.
10. The Filer would be eligible to participate in the POP System if the market value ofits Equity Securities were calculated as at June 29, 2000.
11. The Filer proposes to file an initial annual information form pursuant to theprovisions of NPS 47and the applicable securities legislation of Québec in respectof its fiscal year ended on December 31, 1999.
AND WHEREAS under the System, this MRRS Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;
The Decision of the Decision Makers under the Legislation is that the Market CapitalizationRequirement be waived to permit the Filer to participate in the prompt offering qualificationsystem provided that:
1. the Filer complies in all other respects with the eligibility requirements of the POPSystem;
2. the aggregated market value of the Equity Securities of the Filer, calculated inaccordance with the POP System, is $75,000,000 or more on a date within sixty(60) days prior to the date of filing a preliminary short form prospectus;
3. the eligibility certificate required to be filed in connection with the Filer's initialannual information form shall provide that the Filer satisfies the MarketCapitalization Requirement in accordance with this Decision; and
4. this decision shall terminate on the earlier of:
(i) 140 days after the end of the Filer's financial year ended December 31,2000; and
(ii) the date of the filing of a renewal annual information form in respect of theFiler's financial year ended December 31, 2000.
5. the Filer shall be exempt in Québec from providing the additional disclosurerequired by Schedule IX.1 of the regulation in its initial annual information form andPart B of Schedule IV of the regulation in the Filer's short form prospectus.
DATED at Edmonton, Alberta this 18th day of July, 2000.
"original signed by"
Deputy Director, Capital Markets