Securities Law & Instruments

Headnote

Section 144 -- Application for partial revocation of cease trade order -- Variation of cease trade order to permit certain trades for the purpose of selling securities for a nominal amount solely to establish a tax loss -- The securities were acquired prior to the date of the cease trade order -- Purchaser of the securities is a sophisticated purchaser who understand that such shares have no market value, the purpose of the proposed trades and the nature of the cease trade order -- The purchaser is not aware of any material information that has not been generally disclosed -- Partial revocation granted.

Applicable Legislative Provisions

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

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

WHITE ROCK CAPITAL PARTNERS INC.

AND

IN THE MATTER OF

ROYAL COAL CORP.

ORDER

(Section 144)

WHEREAS on May 15, 2012 a Director of the Ontario Securities Commission (the "Commission") made an order under paragraphs 2 and 2.1 of subsection 127(1) of the Act that all trading in and all acquisitions of securities of ("Royal Coal"), whether direct or indirect, shall cease until further order by the Director (the "Cease Trade Order");

AND WHEREAS White Rock Capital Partners Inc. (the "Applicant") has made an application to the Commission pursuant to section 144 of the Act (the "Application") for an order (the "Order") varying the Cease Trade Order to permit the acquisition by the Applicant of, in the aggregate, 4,490,124 common shares of Royal Coal (the "Royal Coal Shares") from certain sellers solely for the purpose of establishing a tax loss for those sellers;

AND WHEREAS section 3.2 of National Policy 12-202 Revocation of a Compliance-related Cease Trade Order provides that the securities regulatory authority "will generally grant a partial revocation order to permit a security holder to sell securities for a nominal amount solely to establish a tax loss";

AND UPON the Applicant having represented to the Commission that:

1. Royal Coal is an Ontario corporation.

2. Royal Coal is a reporting issuer in the provinces of British Columbia, Alberta, Manitoba and Ontario.

3. Royal Coal has represented to the Applicant that as at October 9, 2012 there were 256,740,671 common shares of Royal Coal issued and outstanding. The last trading price of Royal Coal prior to the Cease Trade Order was $0.005 per common share.

4. The Cease Trade Order was issued by the Commission due to Royal Coal's failure to file the following continuous disclosure documents within the time periods prescribed by applicable securities laws:

(a) audited financial statements for the year ended December 31, 2011;

(b) management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2011;

(c) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

5. The Applicant is a private holding company incorporated in Ontario.

6. Elia Crespo and Scott Hand (the "Sellers") are former directors of Royal Coal.

7. The Sellers acquired common shares of Royal Coal (collectively, the "Royal Coal Shares") prior to the effective date of the Cease Trade Order.

8. The Royal Coal Shares were listed on the TSX Venture Exchange. However, as a result of the Cease Trade Order and other factors, the Sellers have determined that there is no market for the Royal Coal Shares.

9. The Applicant will purchase up to an aggregate of 4,490,124 common shares of Royal Coal Shares from the Sellers (the "Acquisition") solely for the purpose of allowing the Sellers to establish a tax loss in respect of such Acquisition.

10. The Applicant will pay nominal consideration to the Sellers to effect the Acquisition. The Applicant has agreed to purchase the Royal Coal Shares for an aggregate purchase price of up to $44.90.

11. The Sellers are sophisticated sellers and understand that the Royal Coal Shares have no market value, the nature of the Cease Trade Order and the purpose of the proposed trade.

12. The Applicant is a sophisticated purchaser and understands that the Royal Coal Shares have no market value, the nature of the Cease Trade Order and the purpose of the proposed trade.

13. The Applicant is an "accredited investors" pursuant to paragraph (t) of that definition in section 1.1 of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106"). The Sellers are accredited investors pursuant to paragraph (k) of that definition in s. 1.1 of NI 45-106.

14. The Applicant has acknowledged that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

15. Each of the Applicant and the Sellers are not aware of any material information concerning the affairs of Royal Coal that has not been generally disclosed.

16. The Applicant will purchase and hold the Royal Coal Shares as principal.

17. The Applicant and the Sellers have been provided with a copy of the Cease Trade Order and, prior to the completion of the Acquisition, a copy of this Order.

18. The Applicant anticipates that the Acquisition will be completed by December 31, 2012.

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

AND WHEREAS the Director is satisfied that it would not be prejudicial to the public interest to revoke the Cease Trade Order;

IT IS ORDERED under section 144 of the Act that the Cease Trade Order be partially revoked solely to permit the Acquisition.

DATED this18th day of December, 2012.

"Shannon O'Hearn"
Manager, Corporate Finance