Securities Law & Instruments

Headnote

Application by Trustee for a variation of a cease trade order issued by the Commission -- cease trade order issued because the issuer had failed to file certain continuous disclosure materials required by Ontario securities law -- variation will permit all holders to trade certain notes of the issuer if the trade is to certain institutional investors and subject to certain other conditions.

Applicable Legislative Provisions

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

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED (THE "ACT") AND IN THE MATTER OF CRYSTALLEX INTERNATIONAL CORPORATION ("CRYSTALLEX") AND COMPUTERSHARE TRUST COMPANY OF CANADA IN ITS CAPACITY AS TRUSTEE UNDER THE TRUST INDENTURE DATED AS OF DECEMBER 23, 2004, AS SUPPLEMENTED BY A FIRST SUPPLEMENTAL TRUST INDENTURE DATED AS OF DECEMBER 23, 2004 (THE "APPLICANT")

ORDER (Section 144(1) of the Act)

WHEREAS the Ontario Securities Commission (the "Commission") issued an order on April 13, 2012, under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, ordering that trading in the securities of Crystallex, whether direct or indirect, cease temporarily;

AND WHEREAS the Commission issued a further order dated April 25, 2012, pursuant to paragraph 2 of subsection 127(1) ordering that trading in the securities of Crystallex, whether direct or indirect, shall cease until revoked by further order (the "Cease Trade Order");

AND WHEREAS the Applicant has made an application to the Commission pursuant to section 144(1) of the Act to vary the Cease Trade Order;

AND WHEREAS the Applicant has represented to the Commission that:

1. Cease trade orders with respect to the securities of Crystallex have also been issued by the British Columbia Securities Commission on or about April 16, 2012 (as amended on or about April 18, 2012), the Autorité des marchés financiers of Quebec on or about May 8, 2012 and the Manitoba Securities Commission on or about July 9, 2012.

2. None of Crystallex's securities are currently listed or traded on any recognized exchange in Canada.

3. Crystallex is the subject of a Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) (the "CCAA Proceedings") and a proceeding under the U.S. Bankruptcy Code.

4. On July 17, 2015, notice that the Applicant had applied for this Order was provided to Ernst & Young Inc. in its capacity as Monitor in the CCAA Proceedings (the "Monitor"). As of the date of this Order, the Applicant had not received any objection or comment from the Monitor.

5. The Applicant is a trust company existing under the laws of Canada with a registered office located at 100 University Avenue, 11th Floor, Toronto, Ontario, M5J 2Y1 and trustee under that certain trust indenture dated as of December 23, 2004, as supplemented by a first supplemental trust indenture dated as of December 23, 2004, pursuant to which Crystallex issued certain senior unsecured notes in the principal amount of U.S. $100,000,000 bearing interest at 9.375% per annum due December 23, 2011 (the "Notes").

6. To the Applicant's knowledge, Crystallex's securities are not subject to cease trade orders in the United States or in other jurisdictions outside of Canada.

7. To the Applicant's knowledge, a significant amount of the Notes are beneficially owned by investment funds who invest in securities of issuers in bankruptcy or restructuring proceedings.

8. The Applicant is seeking a variation of the Cease Trade Order under section 144(1) of the Act to permit certain trades in the Notes on the terms specified herein.

AND UPON the Commission being satisfied that it is not prejudicial to the public interest to vary the Cease Trade Order under section 144(1) of the Act.

IT IS ORDERED that, pursuant to section 144(1) of the Act, the Cease Trade Order be varied by including the following section:

"This Order does not apply to a trade of the senior unsecured notes issued by Crystallex International Corporation ("Crystallex") in the principal amount of U.S. $100,000,000 bearing interest at 9.375% per annum due December 23, 2011 (the "Notes"):

(a) by a person or company who is:

(i) not an insider or control person of Crystallex; and

(ii) a Specified Entity (as defined below),

to a Specified Entity; or

(b) by a person or company who is:

(i) not an insider or control person of Crystallex; and

(ii) not a Specified Entity,

to a Specified Entity who is not an insider or control person of Crystallex,

provided that prior to such trade either:

(c) the purchaser receives a copy of this Order and provides a written acknowledgment to the seller that the Notes remain subject to this Order in accordance with its terms following such trade; or

(d) Computershare Trust Company of Canada or its agent shall have issued a press release disclosing the terms of this Order and the Monitor shall have posted a copy of this Order on its website, in which case the purchaser shall be deemed to have received notification of the terms of this Order and is deemed to have acknowledged to the seller that the Notes remain subject to this Order in accordance with its terms following such trade.

For the purposes of this Order, a "Specified Entity" means a person or company who is:

(A) registered under the securities legislation of a jurisdiction of Canada as an adviser, investment dealer, mutual fund dealer or exempt market dealer;

(B) an entity organized in a foreign jurisdiction that is analogous to an entity referred to in paragraph (A);

(C) acting on behalf of a managed account managed by the person or company, if the person or company is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; or

(D) an investment fund if one or both of the following apply:

(I) the fund is managed by a person or company registered as an investment fund manager under the securities legislation of a jurisdiction of Canada;

(II) the fund is advised by a person or company authorized to act as an adviser under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction."

DATED at Toronto this 13th day of August, 2015.

"Kathryn Daniels"
Deputy Director, Corporate Finance
Ontario Securities Commission