Prospectus re Admission to the Official List - Heritage Oil

(j)In Alberta, the principal jurisdiction in Canada in which HOC is a ‘‘reporting issuer’’(as defined under the provincial securities law), when any person (‘‘an offeror’’), exceptpursuant to a formal bid, acquires beneficial ownership of, or the power to exercise control ordiscretion over, or securities convertible into, voting or equity securities or any class of areporting issuer that, together with such offeror’s securities would constitute 10 per cent. ormore of the outstanding securities of that class, the offeror must immediately issue and file apress release announcing the acquisition, and file a report of such acquisition with theapplicable securities regulatory authorities within two business days thereafter. Certaininstitutional investors may elect an alternate reporting system. Once an offeror has filed suchreport, the offeror is required to issue further press releases and file further reports each timethe offeror, or any person acting jointly or in concert with the offeror, acquires beneficialownership of, or the power to exercise control or direction over, or securities convertible into,an additional 2 per cent. or more of the outstanding securities of the applicable class.In Alberta, a takeover bid is generally defined as an offer to acquire outstanding voting orequity securities of a class made to any holder in Alberta of securities subject to the offer toacquire, if the securities subject to the offer to acquire, together with securities held by theofferor and any person acting in concert with the offeror, constitute in aggregate 20 per cent. ormore of the outstanding securities of that class of securities at the date of the offer to acquire.Subject to limited exemptions, a takeover bid must be made to all holders of securities of theclass that is subject to the bid who are in Alberta and must allow such security holders 35 daysto deposit securities pursuant to the bid. The offeror must deliver to the security holders atakeover bid circular which describes the terms of the takeover bid and the directors of thereporting issuer must deliver a directors’ circular within fifteen days of the date of the bid,making a recommendation to security holders to accept or reject the bid and the reasons forthe recommendation or a statement that the directors are unable to make or are not making arecommendation and the reasons why. Generally, an offeror may not enter into a collateralagreement, understanding or commitment that has the effect of providing a security holderwith consideration of greater value than that offered to other security holders of the same class.While individual provincial securities laws in Canada only regulate offers to residents of thatprovince, the Canadian Securities Administrators have adopted a policy whereby they mayissue a cease trade order against a company if a takeover bid is not made to all Canadiansecurity holders. Shareholders not resident in Canada are advised that the provincial securitieslaws in Canada may not apply in foreign jurisdictions. Accordingly, the availability of atakeover bid to Shareholders residing outside of Canada will be dependent on whether suchtakeover bid may be made to such non-Canadian Shareholders pursuant to applicablelegislation of the jurisdiction in which the non-Canadian shareholder resides and the actions ofthe acquiring company.Under Alberta corporate law, where an offeror has successfully acquired 90 per cent. of theshares of a company (exclusive of those previously held by the offeror), the offeror may, withinfour months after making the offer to acquire shares of the company, send written notice toany shareholder who did not accept the offer compelling them to sell their shares on the sameterms as contained in the original offer, subject to the right of such shareholder to makeapplication to court, in which case the court may set the price and terms of payment and makesuch other consequential orders and give such directions as it deems appropriate.There have been no public takeover bids by third parties in respect of the Exchangeable Sharessince HOC’s last financial year and the current financial year.5. JERSEY COMPANY LAWThere are a number of material differences between the Companies Act and the Act which mayimpact upon the rights of holders of Ordinary Shares. Salient differences include (withoutlimitation) the following:(a) the Act does not confer statutory pre-emption rights on shareholders relating to newshare issues. But the Articles do confer pre-emption rights on shareholders relating to newissues of Ordinary Shares;(b) the Act does not impose any requirement for the directors to obtain the sanction of theshareholders to issue and allot shares. But the Articles do impose restrictions on amounts that253