Securities Law & Instruments

Headnote

Exemption granted from take-over bid requirementsin connection with acquisition of shares of non-reporting issuer.Authority to negotiate acquisition in accordance with specificterms granted to management of issuer in shareholders agreement.Any acquisition must be made in accordance with terms of shareholdersagreement.

Applicable Ontario Statute

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 95-100 and 104(2)(c).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ONTARIOAND ALBERTA

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

DUNHAVEN ENERGY INC.

AND TANGO ENERGY INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Ontario and Alberta (the "Jurisdictions")has received an application from Dunhaven Energy Inc. (the "Filer")for a decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirements in the Legislationrelating to take over bids (the "Take Over Bid Requirements")shall not apply to the acquisition of all of the Shares (asdefined below) of the Filer (a "Take Over Bid Transaction")by either Tango Energy Inc. ("Tango") or any otherbuyer identified by the Filer's board of directors (an "AlternativeOfferor");

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the British Columbia Securities Commission is the principalregulator for this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice14-101;

AND WHEREAS the Filer has representedto the Decision Makers that:

1. the Filer was incorporated under the CanadaBusiness Corporations Act on September 1, 1995 andis registered as an extra-provincial corporation in BritishColumbia and Alberta;

2. the Filer's head office and records officeis in British Columbia;

3. the Filer is not currently and has neverbeen a reporting issuer in any jurisdiction, nor are any ofits securities listed or posted for trading on any stock exchange;

4. the Filer's authorized share capital consistsof an unlimited number of common shares without par valueand an unlimited number of preferred shares without par value,issuable in series, of which 10,000 preferred shares havebeen designated as Series " A " preferred shares;

5. the Filer has 24,748 common shares (the"Shares") and no preferred shares outstanding;

6. the Filer had 104 shareholders of recordas of September 1, 2002, all of whom are residents of BritishColumbia, Alberta or Ontario (the "Shareholders");

7. the Filer distributed the Shares to personsresident in the Jurisdictions under an Offering Memorandumdated September 1, 1995 (the "Offering");

8. all of the Shareholders are the originalsubscribers under the Offering except for three Shareholderswho acquired their Shares under estates on the death of thesubscriber;

9. each subscriber under the Offering, andeach transferee of Shares from a deceased subscriber, hasentered into a shareholders' agreement dated November 30,1995 (the "Shareholders' Agreement");

10. under the Shareholders' Agreement, theboard of directors (the "Board") of the Filer wasauthorized after March 1, 1998, to negotiate and completeon behalf of the Shareholders a sale of all the outstandingShares to an arm's length third party under certain termsand conditions;

11. each Shareholder has also given a powerof attorney to the Filer to act on behalf of the Shareholderto transfer the Shareholder's Shares to effect such a sale;

12. the Board has determined that it is inthe best interests of the Shareholders to sell the Shares,and has complied with all the terms and conditions of theShareholders' Agreement with respect to the sale of the Shares,including having determined an acceptable sale price of theShares in accordance with the formula set out in the Shareholders'Agreement;

13. the Filer has received an offer to acquireall of the Shares (the "Offer") in accordance withthe Shareholders' Agreement from Tango, an arm's length Albertacorporation;

14. if Tango does not complete the Offer,the Filer will seek an Alternative Offeror for the Sharesand will comply with all the terms and conditions of the Shareholders'Agreement; and

15. there are no exemptions from the TakeOver Bid Requirements for a Take Over Bid Transaction by Tangoor an Alternative Offeror;

AND WHEREAS under the System this MRRSDecision Document evidences the decision of each of the DecisionMakers (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that Tango and any Alternative Offeror areexempt from the Take Over Bid Requirements provided that theTake Over Bid Transaction is done in compliance with the Shareholders'Agreement.

November 8, 2002.

"Brenda Leong"