Securities Law & Instruments

Headnote

Partial revocation of cease trade order to permit trades of securities in connection with a share consolidation and a financing.

Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.

Ontario Policies

OSC Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990 c. S-5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

INTERNATIONAL ROCHESTER ENERGY CORP.

 

ORDER

(Section 144)

WHEREAS the securities of International Rochester Energy Corp. ("Rochester") are subject to a cease trade order issued by the Ontario Securities Commission (the "Commission") on March 11, 2003 (the "Cease Trade Order");

AND WHEREAS Rochester has applied to the Commission pursuant to Section 144 of the Act (the "Application") for a partial revocation of the Cease Trade Order;

AND UPON Rochester having represented to the Commission that:

    (a) Rochester was incorporated under the Company Act (British Columbia) on October 3, 1983, and was continued under the Business Corporations Act (Alberta) on March 5, 1999.

    (b) Rochester is a reporting issuer in the provinces of Alberta, British Columbia and Ontario.

    (c) Rochester was granted a full revocation of a prior cease trade order by the Alberta Securities Commission on April 8, 2004 and a partial revocation by the British Columbia Securities Commission on May 26, 2004 to allow it to complete a shares-for-debt financing to residents of British Columbia and Alberta only, a private placement financing (the "Financing"), and to consolidate its share capital (the "Consolidation").

    (d) Pursuant to the Financing, Rochester proposes to issue up to 3,000,000 post-consolidation common shares at a price of $0.10 per share for total proceeds of up to $300,000.

    (e) The Commission issued the Cease Trade Order because Rochester failed to file audited annual financial statements for the year ended September 30, 2002.

    (f) The annual financial statements for the year ended September 30, 2002 have now been filed, and Rochester has also filed on SEDAR unaudited financial statements for the three months ended December 31, 2002; unaudited financial statements for the six months ended March 31, 2003; audited financial statements for the nine months ended June 30, 2003; audited annual financial statements for the year ended September 30, 2003; and unaudited financial statements for the three months ended March 31, 2004. These filings have been mailed to Rochester's shareholders in accordance with applicable securities laws and they, together with the confirmation of mailing have been filed on SEDAR.

    (g) The common shares of Rochester were formerly listed and posted for trading on the Toronto Stock Exchange; however, the Toronto Stock Exchange delisted Rochester's common shares on November 27, 2000 because Rochester failed to maintain its listing requirements. The shares of Rochester last traded on the Toronto Stock Exchange at a price of $0.04 per share on November 25, 1999. Rochester has no securities, including debt securities, listed or quoted on any exchange or market.

    (h) The authorized capital of Rochester consists of an unlimited number of common shares of which 9,280,290 are issued and outstanding. To the knowledge of Rochester no shareholder owns more than 10% of any class of securities of Rochester. At the annual general meeting of Rochester held on March 28, 2002, shareholders approved the Consolidation. The Consolidation of Rochester's common shares will be on the basis of one share for every nine issued. On completion of the Consolidation, Rochester will have 1,031,143 common shares issued and outstanding. Shareholders also approved a change of name for Rochester to "Rochester Energy Corp.".

    (i) Rochester held its most recent Annual and Special Meeting of Shareholders on June 16, 2004 (the "Meeting"). At the Meeting, Rochester's shareholders voted on and passed special resolutions authorizing the Financing and the adoption of a stock option plan. To the extent that any of these actions constitute a contravention of the Cease Trade Order, such contravention was inadvertent (the "Inadvertent Contravention"). Rochester has apprised itself of the restrictions contained in the Cease Trade Order, and its obligations under the Legislation generally, to ensure future compliance with the terms of the Cease Trade Order.

    (j) Rochester requires additional funds for the following purposes:

      (i) To fund the acquisition of a new oil and gas property in order to revitalize its oil and gas business;

      (ii) To fund an application for listing on the TSX Venture Exchange; and

      (iii) To provide working capital.

    (k) Rochester cannot complete the Financing nor the Consolidation because of the Cease Trade Order.

    (l) All share distributions in connection with the Financing and the Consolidation will comply with applicable securities legislation.

    (m) Concurrent with the Financing, Rochester will provide each Ontario resident who receives securities thereunder with the following:

      (i) a copy of the Cease Trade Order;

      (ii) a copy of this Order; and

      (iii) written notice that any securities they hold prior to the Financing, as well as any they receive pursuant to the Financing, remain subject to the Cease Trade Order and may not be traded until and unless the Cease Trade Order is fully revoked by a further order of the Commission.

    (n) Rochester is not considering, nor is it involved in any discussion relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

    (o) Rochester will proceed with an application for a full revocation of the Cease Trade Order in due course in order that trading in its securities may resume generally.

    (p) Other than the Cease Trade Order and the Inadvertent Contravention, Rochester is not, to its knowledge, in default of any other provision of the Act, or the rules and regulations made pursuant thereto;

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED pursuant to section 144 of the Act that the Cease Trade Order be partially revoked solely to permit the trades and the acts in furtherance of trades that occur on or after the date of this Order that are necessary to complete the Financing and the Consolidation.

July 28, 2004.

"Erez Blumberger"