Crystallex International Corporation and Azimuth Opportunity, Ltd. - ss. 74(1) and 147

Headnote

Application by a TSX-listed issuer and offshore purchaser for exemptive relief in relation to a proposed distribution of securities by the issuer by way of an "equity draw down facility" (also known as an "equity line of credit") -- an equity line of credit is an agreement with a public company under which a purchaser makes a commitment at signing to purchase a specified dollar amount of securities on terms that enable the company to determine the timing and dollar amount of securities the purchaser will receive -- the company has the right, but not the obligation, to sell the securities which are the subject of the equity line to the purchaser, up to a specified maximum dollar amount, in a series of draw downs over a specified period of time (in general, 12 to 24 months) -- purchaser purchases at a predetermined percentage discount (the "discount to market") from the volume weighted average price of the company's securities over a period of trading days -- as a result of the discount to market and the delayed nature of the purchase, the purchaser has strong economic incentive simultaneously to resell (or sell short, or otherwise hedge) the securities which are the subject of a draw down to convert the discount to cash and to reduce as much as possible investment risk -- purchaser may be considered to be acting as an "underwriter" -- a draw down under an equity line of credit may be considered to be an indirect distribution of securities by the company to purchasers in the secondary market through the equity line purchaser acting as underwriter -- relief granted to the issuer and purchaser from certain registration, prospectus and prospectus form requirements, subject to terms and conditions, including a 10% restriction on the number of securities that may be distributed under an equity line in any 12-month period; a requirement that the prospectus include certain disclosure identifying the purchaser as an

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(1) (definition of "distribution" and "underwriter"), 25(1)(a), 59(1), 71(1), 74(1) and 147.

Applicable Ontario Rules

OSC Rule 45-501 Exempt Distributions s. 1(1) "accredited investor".

National Instrument 41-101 Prospectus Disclosure Requirements, s. 5.1.

National Instrument 44-101 Short Form Prospectus Distributions, s. 15.1.

National Instrument 44-102 Shelf Distributions, s. 11.1.

IN THE MATTER OF

THE SECURITIES ACT,

(R.S.O. 1990, c. S.5, as amended) (the "Act")

AND

IN THE MATTER OF

CRYSTALLEX INTERNATIONAL CORPORATION

AND

IN THE MATTER OF

AZIMUTH OPPORTUNITY, LTD.

RULING AND ORDER

(Subsection 74(1) and Section 147 of the Act)

DECISION

(Section 5.1 of National Instrument 41-101,

Section 15.1 of National Instrument 44-101 and

Section 11.1 of National Instrument 44-102)

UPON the application (the "Issuer Application") of Crystallex International Corporation (the "Issuer") for

(a) an order pursuant to section 147 of the Act that the requirement in subsection 59(1) of the Act that, in the case of a distribution by prospectus involving an underwriter, the prospectus contain a certificate in prescribed form signed by the underwriter or underwriters who, with respect to the securities offered by the prospectus, are in a contractual relationship with the issuer whose securities are being offered by the prospectus (the "Underwriter Certificate Requirement") does not apply to the Issuer in connection with the Distribution or Distributions (as defined below) by the Issuer of common shares (the "Shares") of the Issuer qualified by prospectus and made through Azimuth Opportunity, Ltd. (the "Purchaser"), as underwriter, pursuant to an equity draw down facility; and

(b) an order that this ruling, order and decision and the Issuer Application and Purchaser Application (as defined below) made in respect thereto (collectively, the "Confidential Materials") be held in confidence by the Commission until the occurrence of the earliest of the following:

(i) the date on which a supplement to a base shelf prospectus is filed by the Issuer in respect of an equity draw down facility proposed to be entered into between the Issuer and the Purchaser;

(ii) the date the Issuer advises the Commission that there is no longer any need to hold the Confidential Materials in confidence; and

(iii) 90 days from the date of this ruling, order and decision;

(c) a decision pursuant to section 5.1 of National Instrument 41-101 ("NI 41-101"), section 15.1 of National Instrument 44-101 ("NI 44-101") and section 11.1 of National Instrument 44-102 ("NI 44-102") that the requirements to include the following information in a prospectus (collectively, the "Prospectus Form Requirements") do not apply to the Issuer in connection with the Distribution:

(i) disclosure required by items 3.1 and 4.1 of NI 41-101;

(ii) the statement respecting statutory rights of withdrawal and rescission or damages in the form prescribed in item 4.1 of NI 41-101 and item 19 of Form 44-101F3 of NI 44-101 ("Form 44-101F3"), provided the following is substituted therefor:

Securities legislation in the Province of Ontario provides purchasers with the right to withdraw from an agreement to purchase securities and with remedies for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment are not delivered to the purchaser, provided that the remedies are exercised by the purchaser within the time limit prescribed by securities legislation. However, TSX Purchasers of Shares will not have any right to withdraw from an agreement to purchase the Shares because the Prospectus relating to Shares purchased by a TSX Purchaser is not being delivered as permitted under an order of the Ontario Securities Commission dated September •, 2005, and they also will not have remedies of rescission or damages for non-delivery of the Prospectus.

Securities legislation in the Province of Ontario also provides purchasers with remedies for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment contain a misrepresentation, provided that the remedies are exercised by the purchaser within the time limit prescribed by securities legislation. Any remedies under Ontario securities legislation that a TSX Purchaser of Shares may have against the Issuer for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment contain a misrepresentation remain unaffected by the non-delivery of the Prospectus.

Purchasers should refer to the applicable provisions of the securities legislation and the order of the Ontario Securities Commission referred to above for the particulars of their rights or consult with a legal adviser.;

(iii) the disclosure required by items 1.4, 1.8 and 6.1 of Form 44-101F3;

(iv) a certificate signed by the underwriter, if any, with respect to the securities being distributed as required by item 21.2 of Form 44-101F3, as well as item 21.4 of Form 44-101F3 to the extent that it refers to item 21.2; and

(v) in respect of NI 44-102:

(A) the second sentence of the disclosure required by section 5.5.2;

(B) the statement in section 5.5.3;

(C) the underwriter's certificate as required by section 5.5.8; and

(D) an underwriter's certificate as required by section 6.3.3(b).

(d) a decision pursuant to section 11.1 of NI 44-102 that the requirement to deliver the shelf prospectus, as supplemented and amended, as set out in section 6.7 of NI 44-102 does not apply to the Issuer in connection with the Distribution.

AND UPON the application (the "Purchaser Application") of the Purchaser for:

(i) a ruling pursuant to subsection 74(1) of the Act that the requirement in paragraph 25(1)(a) of the Act that prohibits a person or company from trading in a security or acting as an underwriter unless the person or company is registered as a dealer, or is registered as a salesperson or as a partner or as an officer of a registered dealer and is acting on behalf of the dealer (the "Registration Requirement") does not apply to the Purchaser or the directors, officers or employees of the Purchaser in connection with the Distribution; and

(ii) an order pursuant to section 147 of the Act that the requirement in subsection 71(1) of the Act that a dealer not acting as agent of the purchaser who receives an order or subscription for a security offered in a distribution to which subsection 53(1) or section 62 of the Act is applicable deliver to the purchaser or its agent the latest prospectus and any amendment to the prospectus either before entering into an agreement of purchase and sale or not later than midnight on the second business day after entering into such agreement (the "Prospectus Delivery Requirement") does not apply to the Purchaser or to dealers through whom the Purchaser distributes the Shares and consequently no rights of withdrawal arise under subsection 71(2) of the Act;

AND UPON considering the Issuer Application and the Purchaser Application and the recommendations of staff of the Commission;

AND UPON the Purchaser having represented to the Commission the following:

1. The Purchaser is a corporation incorporated under the laws of the Territory of the British Virgin Islands.

2. The Purchaser has been established to purchase and sell, as principal, securities of public companies, including, without limitation, the purchase of equity securities pursuant to equity draw down facilities, as described below.

3. Acqua Wellington Asset Management Ltd. ("Acqua Wellington"), also an international business company incorporated in the Bahamas, is the investment adviser to the Purchaser.

4. Innerkip Capital Management Inc. is a corporation incorporated under the laws of Ontario and registered with the Commission as an investment counsel portfolio manager and limited market dealer.

5. Neither the Purchaser nor Acqua Wellington nor any entity affiliated with either of them is a registrant under the securities legislation of any province or territory of Canada or under U.S. securities legislation.

6. The Purchaser is proposing to enter into an equity draw down facility (the "Agreement") with the Issuer, under which the Purchaser would agree to purchase up to C$60 million of Shares over a defined period not to exceed two years in a series of draw downs.

7. The Agreement will provide that during the term of the Agreement neither the Purchaser nor any of its subsidiaries nor any entity managed by the Purchaser will sell common shares of the Issuer other than those common shares (i) that the Purchaser has accumulated to purchase under the terms of the Agreement, or (ii) held in any accounts directly or indirectly managed by the Purchaser or any subsidiary of the Purchaser or any entity managed by the Purchaser.

8. An equity draw down facility (also known as an equity line of credit), is an agreement with a public company under which a purchaser makes a commitment at signing to purchase a specified dollar amount of common shares on terms that enable the company to determine the timing and dollar amount of securities the purchaser will receive. Specifically, the company has the right, but not the obligation, to sell the securities which are the subject of the equity facility to the purchaser, up to a specified maximum dollar amount, in a series of draw downs over a specified period of time (in general, 12 to 24 months).

9. The company has the sole ability to determine how many securities to sell within specific minimum and maximum dollar amounts for each draw down, subject to the aggregate maximum dollar amount for the entire equity facility. The number of shares the purchaser must purchase is determined by the dollar amount specified by the company in its draw down notice.

10. When the company gives the purchaser notice that the company intends to make a draw down under the equity facility, the purchaser is obligated to purchase the dollar amount of securities from the company at a predetermined percentage discount from the daily volume weighted average price of the company's securities over a period of trading days.

11. After receipt of a draw down notice, the purchaser may seek to sell the securities purchased under the draw down, or engage in hedging strategies, in order to reduce the economic risk associated with the purchase of the securities that it has agreed to purchase under the draw down.

12. The purchaser may be considered to be acting as an "underwriter" as defined in subsection 1(1) of the Act, and a draw down under an equity draw down facility may be considered to be an indirect distribution of securities by the company to purchasers of the securities directly from the purchaser through the Toronto Stock Exchange (the "TSX") with the purchaser acting as the underwriter of the distribution.

13. An issuer distributing securities by prospectus through an underwriter is subject to the Underwriter Certificate Requirement.

14. A person or company acting as an underwriter is subject to the Registration Requirement.

15. A dealer not acting as agent of the purchaser who sells securities offered in a distribution to which the prospectus requirement applies is subject to the Prospectus Delivery Requirement.

16. The Purchaser is seeking an exemption from the Prospectus Delivery Requirement on behalf of itself and dealers through whom it sells the Shares because the purchasers of the Shares from the Purchaser through the TSX will not be readily identifiable as the dealer acting on behalf of the Purchaser may combine the sell orders made under the prospectus with other sell orders and the dealer acting on behalf of a purchaser from the Purchaser may combine a number of purchase orders.

17. The Purchaser will effect all sales of Shares during the Distribution Period, as defined below, through the TSX.

AND UPON the Issuer having represented to the Commission and the Director the following:

1. The Issuer is a corporation existing under the laws of Canada and a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta, Manitoba, Ontario, Quebec, Nova Scotia and Newfoundland.

2. The Issuer and its subsidiaries explore for, mine and produce gold, with a primary focus on Venezuela. The Issuer's registered and head office is located in Toronto, Ontario.

3. The Issuer is authorized to issue an unlimited number of common shares, an unlimited number of Class A Preference shares and an unlimited number of Class B Preference shares, of which 194,066,689 common shares were issued and outstanding as at August 22, 2005.

4. The common shares of the Issuer are listed and posted for trading on the TSX and AMEX.

5. As at August 22, 2005, the aggregate market value of the outstanding common shares calculated in accordance with section 2.9 of NI 44-101 was $642,360,741.

6. The Issuer is eligible to file a short form prospectus under NI 44-101.

7. The Issuer has filed a base shelf prospectus (the "Base Shelf Prospectus") and intends to file with the Commission under NI 44-102:

(a) in connection with the Agreement, as defined below, a prospectus supplement (the "Distribution Supplement") relating to the Distribution of the Shares to the Purchaser and to purchasers ("TSX Purchasers") who purchase Shares directly from the Purchaser during the Distribution Period through the TSX; and

(b) a prospectus supplement (the "Pricing Supplement") within two business days after the end of the pricing period with respect to each draw down disclosing the number of Shares sold pursuant to that draw down to the Purchaser and the price per Share.

8. The Issuer will amend the Base Shelf Prospectus as supplemented by the Distribution Supplement and the Pricing Supplement qualifying the Distribution described in 9 below, if required by Ontario securities legislation, so that the Prospectus is current up to and including the date of settlement (the "Settlement Date") of the Shares sold to the Purchaser pursuant to the draw down disclosed in the Pricing Supplement filed the business day before the Settlement Date. The "Prospectus" means the Base Shelf Prospectus, Distribution Supplement and such Pricing Supplement, as so amended.

9. The Prospectus will qualify the distribution of

(a) the Shares to the Purchaser on the settlement of the draw down disclosed in the Pricing Supplement; and

(b) the Shares in (a) above to TSX Purchasers during the period (the "Distribution Period") that commences on the Settlement Date and ends on the date that is the 40^th day after the Settlement Date

(together, the "Distribution").

10. For the purposes of section 130 of the Act, a TSX Purchaser during the Distribution Period constitutes a purchaser who purchases Shares pursuant to the Prospectus.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

THE ORDER of the Commission pursuant to section 147 of the Act is that the Underwriter Certificate Requirement does not apply to the Issuer in connection with the Distribution so long as:

1. the number of common shares ("maximum number of common shares") distributed by the Issuer under one or more equity lines of credit, including the Agreement, in each of

(a) the 12 month period commencing on the date of the Agreement; and

(b) the 12 month period commencing on the first anniversary of the date of the Agreement

does not exceed 10 per cent of the aggregate number of outstanding common shares on

(a) a date within 60 days before the date of the Agreement in the case of the period in (a) above; and

(b) a date within 60 days before the first anniversary of the date of the Agreement in the case of the period in (b) above;

2. the Issuer issues a press release immediately

(a) upon entering into the Agreement, disclosing the terms of the Agreement including the

(i) aggregate maximum issue price of the Shares that may be distributed under the Agreement,

(ii) maximum number of common shares, and

(iii) minimum threshold price per Share (the "minimum threshold price"), being the lowest price not taking into account the draw down discounted percentage, at which the Issuer may sell Shares to the Purchaser under the Agreement, which price may be adjusted by the Issuer and the Purchaser pursuant to the terms of the Agreement; and

(b) upon the adjustment, if any, of the minimum threshold price, disclosing the revised minimum threshold price;

3. the Issuer files the Distribution Supplement relating to the Distribution of the Shares to the Purchaser and to TSX Purchasers;

4. the Distribution Supplement discloses the terms of the Agreement and states in effect that

In addition to the distribution of the Shares to the Purchaser, the prospectus qualifies the distribution of the Shares to purchasers who purchase Shares directly from the Purchaser during the Distribution Period through the TSX. The Purchaser may be considered to be an "underwriter" within the meaning of securities legislation in Ontario, but pursuant to an order granted by the Commission, we are exempt from the requirement to include a certificate of the Purchaser in this prospectus.

The Purchaser has informed us that it intends to use dealers registered under the Securities Act (Ontario) to distribute the Shares through the TSX. Such sales will be made at prices and on terms then prevailing or at prices related to the then current market price.;

5. the Issuer files a Pricing Supplement within two business days after the end of the pricing period with respect to each draw down disclosing the number of Shares sold pursuant to that draw down to the Purchaser and the price per Share;

6. the Prospectus qualifies the Distribution of

(a) the Shares to the Purchaser on the settlement of the draw down disclosed in the Pricing Supplement filed the business day before such settlement; and

(b) the Shares in (a) above to TSX Purchasers during the Distribution Period;

7. the Issuer provides a copy of each draw down notice under the Agreement to the TSX, and, if requested to do so, the Commission, prior to or immediately upon its issuance;

8. immediately upon issuance of the draw down notice, the Issuer issues a press release disclosing that a draw down notice has been delivered and stating that a Pricing Supplement will be filed within two business days after the end of the pricing period and will be available on SEDAR;

9. the commencement date of the draw down pricing period is no later than five trading days after the issuance of the draw down notice; and

10. immediately following the closing of a draw down, the Issuer forthwith issues a press release in Canada (i) announcing the settlement of a draw down under the Agreement; (ii) stating that pursuant to an order granted by the Commission the Prospectus is not required to be delivered and confirming availability of the Prospectus on SEDAR; (iii) stating that the purchasers of Shares under the Prospectus have the statutory rights of rescission or damages described in the Distribution Supplement; and (iv) stating that the Distribution Period ends no later than the date that is the 40^th day after the settlement of the draw down disclosed in the Prospectus, as supplemented by the Pricing Supplement relating to the draw down.

THE RULING of the Commission pursuant to subsection 74(1) of the Act is that the Registration Requirement does not apply to the Purchaser or the directors, officers or employees of the Purchaser in connection with the Distribution so long as:

1. the Purchaser does not solicit offers to purchase the Shares and effects all Distributions of Shares during the Distribution Period through the TSX using a dealer unaffiliated with the Purchaser or the Issuer;

2. no extraordinary commission or consideration is paid by the Purchaser to a person or company in respect of the Distribution of the Shares; and

3. the Purchaser makes available to the Commission, upon request, full particulars of trading and hedging activities by the Purchaser (and, if relevant, trading and hedging activities by affiliates of the Purchaser) in relation to securities of the Issuer during the term of the Agreement.

THE ORDER of the Commission pursuant to section 147 of the Act is that the Prospectus Delivery Requirement does not apply to the Purchaser or to dealers through whom the Purchaser distributes the Shares, and consequently no rights of withdrawal arise under subsection 71(2) of the Act, so long as the immediately preceding conditions 1 through 3 are met.

THE ORDER of the Commission is that the Confidential Materials will be held in confidence by the Commission until the occurrence of the earliest of the following:

1. the date on which the Distribution Supplement is filed by the Issuer;

2. the date the Issuer advises the Commission that there is no longer any need to hold the Confidential Materials in confidence; and

3. 90 days from the date of this ruling, order and decision.

THE DECISION of the Director pursuant to section 5.1 of NI 41-101, section 15.1 of NI 44-101 and section 11.1 of NI 44-102 that the Prospectus Form Requirements do not apply to the Issuer in connection with the Distribution so long as the Issuer includes the following statement in the Distribution Supplement:

Securities legislation in the Province of Ontario provides purchasers with the right to withdraw from an agreement to purchase securities and with remedies for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment are not delivered to the purchaser, provided that the remedies are exercised by the purchaser within the time limit prescribed by securities legislation. However, TSX Purchasers of Shares will not have any right to withdraw from an agreement to purchase the Shares because the Prospectus relating to Shares purchased by a TSX Purchaser is not being delivered as permitted under an order of the Ontario Securities Commission dated September •, 2005, and they also will not have remedies of rescission or damages for non-delivery of the Prospectus.

Securities legislation in the Province of Ontario also provides purchasers with remedies for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment contain a misrepresentation, provided that the remedies are exercised by the purchaser within the time limit prescribed by securities legislation. Any remedies under Ontario securities legislation that a TSX Purchaser of Shares may have against the Issuer for rescission or damages if the prospectus, prospectus supplements relating to securities purchased by a purchaser and any amendment contain a misrepresentation remain unaffected by the non-delivery of the Prospectus.

Purchasers should refer to the applicable provisions of the securities legislation and the order of the Ontario Securities Commission referred to above for the particulars of their rights or consult with a legal adviser.

THE DECISION of the Director pursuant to section 11.1 of NI 44-102 is that the requirement in section 6.7 of NI 44-102 does not apply to the Issuer in connection with the Distribution so long as the following statements are included in the Distribution Supplement:

The legislation requires the filing of a prospectus supplement containing the omitted information within a specified period of time after the Purchaser agrees to purchase any of the securities.