Mutual Reliance Review System for Exemptive Relief Applications -- Filer exempt from certain continuous disclosure requirements -- Relief from certain filing requirements -- Trust filing information relevant to holders of exchangeable shares.
Applicable Ontario Statutory Provisions
National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.
National Instrument 51-102 -- Continuous Disclosure Obligations.
Multilateral Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings.
Citation: Zargon Oil & Gas Ltd., 2005 ABASC 692
August 19, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, MANITOBA, ONTARIO,
NEW BRUNSWICK, NOVA SCOTIA, NEWFOUNDLAND AND LABRADOR, YUKON,
NORTHWEST TERRITORIES AND NUNAVUT (THE JURISDICTIONS)
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
ZARGON OIL & GAS LTD. (THE FILER)
MRRS DECISION DOCUMENT
1. The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that:
1.1 the Filer be exempted from Part 2 (Annual Filing Requirements) and Part 3 (Responsibilities of Reporting Issuers and Directors) of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) (the NI 51-101 Relief); and
1.2 except in British Columbia, the Filer be exempted from Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (MI 52-109) (the MI 52-109 Relief).
2. Under the Mutual Reliance Review System for Exemptive Relief Applications (the MRRS):
2.1 the Alberta Securities Commission is the principal regulator for this application; and
2.2 this MRRS decision document evidences the decision of each Decision Maker.
3. Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.
4. The decision is based on the following facts represented by the Filer:
4.1 The Filer amalgamated under the Business Corporations Act (Alberta) on July 15, 2004.
4.2 The head office and registered office of the Filer is located in Calgary, Alberta.
4.3 The Filer has 100 common shares issued and outstanding all of which are owned by Zargon Energy Trust (the Trust). The Filer has 2,912,822 exchangeable shares (Exchangeable Shares) issued and outstanding none of which are owned by the Trust.
4.4 The common shares of the Filer are not listed or quoted on any marketplace.
4.5 The Exchangeable Shares are listed and posted for trading on the Toronto Stock Exchange (the TSX).
4.6 The Filer is a reporting issuer in each of British Columbia, Alberta, Manitoba, Ontario, Québec, Nova Scotia, New Brunswick and Newfoundland and Labrador.
4.7 The Trust was established pursuant to a trust indenture dated June 17, 2004 under the laws of Alberta.
4.8 The Trust is, for the purposes of the Income Tax Act (Canada), an unincorporated, open-end mutual fund trust.
4.9 The head office of the Trust is located in Calgary, Alberta.
4.10 The Unitholders are the sole beneficiaries of the Trust. Valiant Trust Company (the Trustee) is the trustee of the Trust. The Filer is the administrator of the Trust.
4.11 The Trust Units are listed and posted for trading on the TSX.
4.12 The Trust is a reporting issuer in each of British Columbia, Alberta, Manitoba, Ontario, Québec, New Brunswick, Nova Scotia and Newfoundland and Labrador.
4.13 The Exchangeable Shares are, to the extent possible, the economic equivalent of the Trust Units.
4.14 The Exchangeable Shares have voting attributes equivalent to those of the Trust Units.
4.15 Holders of Exchangeable Shares receive all disclosure materials that the Trust is required to send to holders of Trust Units under the Legislation.
4.16 The exchange rights attaching to the Exchangeable Shares are governed by a voting and exchange trust agreement among the Trust, the Filer, Zargon ExchangeCo (ExchangeCo) and the Trustee that provides the Trustee the right to require the Trust or ExchangeCo to exchange the Exchangeable Shares and which will trigger automatically the exchange of the Exchangeable Shares for Trust Units upon the occurrence of certain specified events.
4.17 The Exchangeable Shares are also subject to a support agreement among the Trust, the Filer, ExchangeCo and the Trustee, pursuant to which the Trust and ExchangeCo will take certain actions and make certain payments and will deliver or cause to be delivered Trust Units in satisfaction of the obligations of the Filer.
4.18 Pursuant to an MRRS decision document dated May 22, 2004 (the 2004 Decision), the Filer was exempted from NI 51-102 in each of British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Yukon and Nunavut. In Québec, the Filer was exempted from continuous disclosure obligations under general order No. 2004-PDG-0020 that has the effect of exempting the Filer from requirements substantially equivalent to the requirements of NI 51-102. The Filer has obtained an exemption from all other comparable continuous disclosure requirements under the Legislation of the Jurisdictions noted in this paragraph that have not yet been repealed or otherwise rendered ineffective as a consequence of the adoption of NI 51-102 (collectively, the CD Requirements).
4.19 The MI 52-109 Relief is not required in British Columbia as British Columbia has not adopted MI 52-109.
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.
6. The decision of the Decision Makers under the Legislation is that:
6.1 the NI 51-101 Relief is granted for so long as:
6.1.1 the Trust files with each Decision Maker copies of all documents required to be filed by it pursuant to NI 51-101 (the NI 51-101 Documents) and, concurrently with each such filing, the Trust files in electronic format under the System for Electronic Document Analysis and Retrieval (SEDAR) profile of the Filer either:
188.8.131.52 the NI 51-101 Documents; or
184.108.40.206 a notice that indicates:
220.127.116.11.1 that the Filer has been granted an exemption from the requirements of Part 2 (Annual Filing Requirements) and Part 3 (Responsibilities of Reporting Issuers and the Directors) of NI 51-101;
18.104.22.168.2 that the Trust has filed the NI 51-101 Documents; and
22.214.171.124.3 where a copy of the NI 51-101 Documents can be found for viewing on SEDAR by electronic means;
6.1.2 the Filer disseminates, or causes the Trust to disseminate on the Filer's behalf, a news release announcing the filing by the Filer or the Trust of the information set out in paragraph 6.1.1 and indicating where a copy of the filed information can be found for viewing on SEDAR by electronic means;
6.1.3 the Filer is exempt from or otherwise not subject to the CD Requirements and the Filer and the Trust are in compliance with the 2004 Decision;
6.1.4 if the disclosure to which NI 51-101 applies is made by the Filer separately from the Trust, the disclosure includes a statement to the effect that the Filer is relying on an exemption from requirements to file information annually under NI 51-101 separately from the Trust, and indicates where disclosure under NI 51-101 filed by the Trust (or by the Filer, if applicable) can be found for viewing on SEDAR by electronic means; and
6.1.5 if the Trust files a material change report to which section 6.1 of NI 51-101 applies, the Filer files the same material change report; and
6.2 the MI 52-109 Relief is granted for so long as:
6.2.1 the Filer is not required to, and does not, file its own interim filings and annual filings (as those terms are defined under MI 52-109);
6.2.2 the Trust files in electronic format under the SEDAR profile of the Filer the:
126.96.36.199 interim financial statements of the Trust required under section 4.3 of NI 51-102;
188.8.131.52 annual financial statements of the Trust required under section 4.2 of NI 51-102;
184.108.40.206 certification of interim filings of the Trust required under Part 3 of MI 52-109; and
220.127.116.11 certification of annual filings of the Trust required under Part 2 of MI 52-109
at the same time as such documents are required to be filed by the Trust under the Legislation; and
6.2.3 the Filer is exempt from or otherwise not subject to the CD Requirements.