IN THE MATTER OF THE SECURITIES LEGISLATION
OF BRITISH COLUMBIA,
ALBERTA, MANITOBA, ONTARIO, SASKATCHEWAN, Qu�bec, NEW BRUNSWICK AND THE NORTHWEST
TERRITORIES
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF VICEROY RESOURCE CORPORATION, QUEST INVESTMENT CORPORATION, ARAPAHO
CAPITAL CORP. AND AVATAR PETROLEUM INC.
MRRS DECISION DOCUMENT
1 WHEREAS the local securities regulatory authority
or regulator (the "Decision Maker") in each of British Columbia,
Alberta, Manitoba, Ontario,
Saskatchewan, Qu�bec, New Brunswick and the Northwest Territories (collectively,
the
"Jurisdictions") has received an application from Viceroy Resource
Corporation
("Viceroy") and Quest Investment Corporation ("Quest") (collectively,
the "54-101 Filers") for a decision under the securities legislation
of the
Jurisdictions (the "Legislation") that the requirement contained in
the
Legislation to deliver printed copies of an information circular (the "Joint
Information Circular"), prepared in connection with a proposed plan of arrangement
(the "Arrangement") involving Viceroy, Quest, Arapaho Capital Corp.
("Arapaho") and Avatar Petroleum Inc. ("Avatar"), to their
respective registered and non-registered shareholders shall not apply to the
54-101 Filers in
connection with the meetings of their shareholders to be held to consider the
Arrangement;
2 AND WHEREAS under the Mutual Reliance Review System for Exemptive
Relief Applications (the "System"), the British Columbia Securities
Commission
is the principal regulator for this application;
3 AND WHEREAS, unless otherwise defined, the terms herein have the
meaning set out in National Instrument 14-101 Definitions or in Qu�bec Commission
Notice
14-101;
4 AND WHEREAS the 54-101 Filers have represented to the Decision Makers
that:
1. Viceroy was amalgamated under the British Columbia Company Act (the "Company
Act");
Viceroy's head office is located in Vancouver, British Columbia; Viceroy is a
reporting issuer or the equivalent in each of the Jurisdictions
that provides for a reporting issuer regime and is up to date with all its filings
under
the Legislation in each of those Jurisdictions and under the Company Act;
2. Quest was amalgamated under the Company Act; Quest's head office is
located in Vancouver, British Columbia; Quest is a reporting issuer or the equivalent
in each of the Jurisdictions that provides for a reporting issuer regime and
is up to date
with all its filings under the Legislation in each of those Jurisdictions
and under
the Company Act;
3. Arapaho is incorporated under the Company Act; Arapaho's head office
is located in Vancouver, British Columbia; Arapaho is a reporting issuer in British
Columbia and Alberta and is up to date with all its filings under the Legislation
in each
of those Jurisdictions and under the Company Act;
4. Avatar is incorporated under the Company Act; Avatar's head office is
located in Vancouver, British Columbia; Avatar is a reporting issuer in British
Columbia
and Alberta and is up to date with all its filings under the Legislation in
each of
those Jurisdictions and under the Company Act;
5. in connection with the proposed Arrangement, each of the 54-101
Filers will be calling an extraordinary general meeting to obtain shareholders'
approval of the Arrangement; in order to reduce the costs associated with convening
separate annual
general meetings, the 54-101 Filers will hold their 2003 annual general meetings
concurrently with their extraordinary general meetings (collectively, the "Meetings")
and include the information and documentation statutorily required to be sent
to shareholders in connection with the annual general meeting as part of the
Joint Information Circular;
6. collectively, the 54-101 Filers will be required to mail over 12,200
copies of the Joint Information Circular, estimated to be over 350 pages in length,
to their registered shareholders in connection with the Meetings; over 87 percent
of the
registered shareholders of the 54-101 Filers own less than a board lot of shares;
the estimated costs per shareholder associated with the printing and mailing
of the Joint
Information Circular will be greater than the current value of the shares owned
by many of
the 54-101 Filers' shareholders;
7. having regard to the provisions of National Policy 11-201 Delivery
of Documents by Electronic Means for the electronic delivery or access to
a document,
each of the 54-101 Filers will ensure that:
(a) its shareholders receive written notice, by mail, that the Joint Information Circular is electronically available to them;
(b) its shareholders are provided with a summary of the Joint Information Circular (the "Summary") which will contain a succinct and clear outline of the Arrangement proposed and a summary of the information and documentation statutorily required to be sent to shareholders in connection with the annual general meeting, with references to where and how the full text of the Joint Information Circular may be accessed electronically or provided to the shareholder in printed form, free of charge;
(c) its shareholders have easy access to the Joint Information Circular through SEDAR and through the 54-101 Filers' respective websites designated in the notice referred to in paragraph (a) or by requesting and receiving from that 54-101 Filer, a printed copy, free of charge; and
(d) the Joint Information Circular available electronically to shareholders is identical in its content to the printed copy of that document;
5 AND WHEREAS under the System, this MRRS Decision
Document evidences
the decision of each Decision Maker (collectively, the "Decision");
6 AND WHEREAS 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;
7 THE DECISION of the Decision Makers under the Legislation is that the
requirement contained in the Legislation to deliver printed copies of the Joint
Information Circular to the 54-101 Filers' respective registered and non-registered
shareholders shall not apply to the 54-101 Filers in connection with the proposed
Arrangement, provided that each of the 54-101 Filers ensures that in connection
with the
preparation and mailing of meeting materials associated with its Meetings:
(a) its shareholders receive printed copies of the notice of meeting, the Summary and form of proxy by mail, which notice states that the Joint Information Circular is available to them electronically or, by request, in its printed form;
(b) its shareholders have access to the Joint Information Circular through SEDAR and through the 54-101 Filers' websites designated in the notice referred to in paragraph (a) or by requesting and receiving from that 54-101 Filer, a printed copy, free of charge; and
(c) the Joint Information Circular available electronically to shareholders is identical in its content to the printed copy of that document;
8 May 14, 2003
Brenda Leong
Director
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – relief
from the requirement to send an information circular by prepaid mail, subject
to certain conditions
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 117(2)(a) and 119(2)
National Instrument 54-101 Communication with Beneficial Owners of Securities of a
Reporting Issuer, ss. 2.7 and 9.2