IN THE MATTER OF
HADDINGTON INTERNATIONAL RESOURCES LTD.
IN THE MATTER OF
DAYTONA ENERGY CORP.
UPON the application of Haddington International Resources Ltd. ("Haddington") and Daytona Energy Corp. ("Daytona") to the Ontario Securities Commission (the "Commission") for a ruling pursuant to section 74(1) of the Act that the issuance of the Settlement Shares (as defined below) in settlement of the Litigation (as defined below) shall not be subject to sections 25 and 53 of the Act, subject to certain conditions;
AND UPON considering the application and the recommendation of staff of the Commission;
AND UPON Haddington and Daytona having represented to the Commission as follows:
1.Haddington is a company incorporated under the laws of Australia and is a reporting issuer in British Columbia. It is not, and has no current intention of becoming, a reporting issuer in Ontario.
2.Daytona is a company incorporated under the laws of Yukon and is a reporting issuer in British Columbia. It is not, and has no current intention of becoming, a reporting issuer in Ontario.
3.The authorized capital of Haddington is unlimited common shares (the "Haddington Common Shares"), of which 8,920,492 Haddington Common Shares were outstanding as at August 22, 2000. The Haddington Common Shares are listed on the Canadian Venture Exchange ("CDNX").
4.The authorized capital of Daytona is unlimited common shares (the "Daytona Common Shares"), of which 17,429,806 Daytona Common Shares are outstanding as at August 22, 2000. The Daytona Common Shares are listed on the CDNX.
5.Kenneth G. Byberg, Andy Byberg, Bonnie Mercer, Terrence Byberg and Wayne Byberg (the "Bybergs") are residents of Ontario.
6.By a letter agreement dated June 5, 1996 (the "Agreement") the Bybergs, as owners of certain mineral claims located in the Tyrrell Township of Ontario (the "Claims"), agreed to give Haddington and Daytona the right to explore and mine the Claims provided they paid the consideration set out in the Agreement as and whenstipulated.
7.The Agreement provided that each of Haddington and Daytona would pay to the Bybergs certain amounts of money at certain times.
8.It was also a specific term of the Agreement that Haddington would issue an aggregate of 100,000 Haddington Common Shares and Daytona would issue an aggregate of 66,666 Daytona Common Shares to the Bybergs within 10 business days following regulatory approval of the issuances.
9.Under the Agreement Haddington and Daytona could terminate their rights by providing the Bybergs with 30 days written notice after which all future obligations to pay any further consideration would end as would any right of Haddington and Daytona to further explore or mine the Claims.
10.On or about June 28, 1996 Haddington and Daytona received regulatory approval from the Vancouver Stock Exchange of the Agreement including approval to issue 100,000 Haddington Common Shares and 66,666 Daytona Common Shares (the "Approved Shares") to the Bybergs.
11.Haddington and Daytona subsequently gave notice on or about August 2, 1996 to erminate the Agreement which notice was effective 30 days thereafter in accordance with the Agreement.
12.Under the Agreement, Haddington and Daytona were to have issued and or delivered the Approved Shares to the Bybergs within 10 days following regulatory approval. Despite demands, Haddington and Daytona have failed to issue or deliver the Approved Shares.
13.The Bybergs pursued an action in the Supreme Court of British Columbia against Haddington and Daytona for the delivery of the Approved Shares, damages for the failure to deliver the Approved Shares, costs, and such further and other relief as the Court deems just (the "Litigation").
14.In settlement of the Litigation, Haddington and Daytona agreed to issue 87,500 Haddington Common Shares and 116,667 Daytona Common Shares, having a total value of $35,000, to the Bybergs (the "Settlement Shares").
15.Pursuant to the policies of the CDNX, Haddington and Daytona issued a news release on July 18, 2000 disclosing the proposed issuance of the Settlement Shares.
16.The Settlement Shares would represent 0.98% of the total issued and outstanding Haddington Common Shares and 0.67% of the total issued and outstanding Daytona Common Shares.
17. Haddington and Daytona have not issued any securities in settlement of litigation in the previous twelve months.
18. Ontario residents hold less than 10% of the issued and outstanding Haddington Common Shares and represent less that 10% of the number of holders of Haddington Common Shares.
19. Ontario residents hold less than 10% of the issued and outstanding Daytona Common Shares and represent less that 10% of the number of holders of Daytona Common Shares.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS RULED pursuant to subsection 74(1) of the Act that the issuance of the Settlement Shares to the Bybergs shall not be subject to sections 25 and 53 of the Act provided that the first trade in the Settlement Shares shall be a distribution unless,
(a)the first trade is made in accordance with subsection 72(4) of the Act as if the Settlement Shares were acquired pursuant to an exemption referred to in that provision; or
(b)the first trade is made in accordance with Rule 72-501 Prospectus Exemption for First Trade over a Market Outside Ontario as if the Settlement Shares were each a restricted security as such term is defined in the Rule.
December 5th, 2000.
"J.A. Geller""Robert W. Korthals"